Half of C-suite only value HR at times of crisis, study shows

Experts say the function needs to shows commercial value and business leaders should include people teams in all strategic decisions

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More than half of C-suite executives only see HR’s value at times of crisis despite the majority of business leaders thinking the department will only grow in importance, new research has shown.

The Personio study, of 500 C-suite executives and more than 1,000 HR decision makers, found that 54 per cent only value HR during moments of volatility, such as the Covid pandemic or when there are talent shortages.

In addition, half of C-suite executives admitted they did not strategically or effectively use their HR team, with more than half (53 per cent) saying they do not get enough advice or input from their people practitioners.

This is despite more than half (54 per cent) of the senior leaders being worried about digital upskilling, diversity and inclusion, and flexible working – alongside 69 per cent of executives recognising their HR department will only get more important in the future.

For Alan Price, chief executive of BrightHR, HR’s reputation as an administrative and compliance-centric function may still be holding it back, while some HR functions may still not have evolved into being more strategic and leadership oriented. He said: “HR may be negatively associated with meetings that many managers do not want to be involved in, such as disciplinaries, and consequently companies possibly do not consider that HR can be involved in other positive aspects of the organisation.

“Elsewhere, issues can also arise when HR doesn’t evolve as workplaces are constantly evolving and, as such, HR needs to as well.”

The Personio study showed that 71 per cent of the C-suite would like HR to increasingly deliver against metrics that contribute to commercial goals.

The most common answers about what executives wanted to change about HR included: the function more quickly adapting to changing priorities; adopting new processes with greater speed; and connecting business and HR issues in an improved manner.

There also appears to be an appetite in the C-suite to improve HR-business relations, with two thirds (67 per cent) of business leaders wanting to understand the function better.

However, with 8 per cent of executives only tackling people problems when they arise, Gethin Nadin, chief innovation officer at Benefex, explained that if there was no appetite from the top executives to adapt to the changing workforce and engage with HR then operations would suffer.

This, Nadin added, was especially important as consumers and employees alike increasingly valued how organisations adapted to their people’s needs. “For any C-suite who does not highly regard and value the work of HR, I fear they will never get there and they unfortunately will be operating far less successful organisations than if they did appreciate HR,” he said.

For Tim Ringo, director at Lace Partners, this means that both HR and the executive have to work together to drive successful outcomes, with HR focusing on delivering improvements in employee experience, people technology, wellbeing and resilience, and business leaders involving HR in “all aspects of running the business”.

He said: “HR being at the heart of the executive team’s management of change allows the CHRO and top team to help the organisation stay ahead of change, rather than reacting to it.

“Whereas organisations with HR not at the heart of the CEO’s strategy and change plans are constantly running to catch up and are battered by constant change.”