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Globalization, Productivity Not Among Top HR Priorities
 

By Kathy Gurchiek  3/27/2008

HR departments align their priorities strongly with their organizations’ overall goals of growth and customer satisfaction, but less so with other business priorities such as globalization and cost containment, according to recently released findings from a global survey of HR executives.

Only 4 percent of those surveyed, for example, ranked cross-cultural awareness—training that provides understanding of the drivers among cultures of different countries—as a top HR priority, even though it’s considered a critical element of globalization.

And only 20 percent ranked increased productivity as a top HR priority, pointed out Resources Global Professionals in its 33-page report Human Capital Survey: Insights on Global Transformation.

“HR’s priorities already support the main corporate objective—growth—primarily through traditional recruitment and retention strategies but provide little support to other corporate priorities,” the report says.

Its findings are based on 51 confidential, nearly hour-long interviews conducted offsite in the first half of 2007 with senior HR executives at global corporations based in the United States and 11 European and Asia-Pacific countries. Almost 80 percent have annual revenues of more than $1.5 billion.

The war for talent is crucial and will have an impact on business within the next decade, said 82 percent of those surveyed. Restructuring the organization, including offering training and development enhancements to reduce the need to recruit new talent, and attracting offshore talent are among staffing solutions that HR executives cited. Viewing older workers as a valuable resource also was mentioned.

However, while the difficulty of recruiting and retaining talent is widespread, even in Asia, most of those surveyed are focusing on short-term solutions, the report found.

“While it is understandable that HR leaders seek immediate solutions to address current problems, our research indicates that few companies have a clear vision of future skill requirements,” said Chris Hagler, Atlanta-based managing director of Global Strategic Services at Resources.

“Moreover, most employers take a narrow, local view when considering demographic trends,” he said in a press release. “Long-term measures such as strategic workforce planning are off the radar of HR leaders, who could benefit from workforce planning scenarios that consider a worldwide labor pool.”

An effective strategy, the report notes, “will be the result of strong collaboration between HR, executives, line managers and employees.”

All those surveyed “demonstrated a strong desire to improve collaboration and deepen existing partnerships,” and 91 percent were focused on improving those links, especially by being involved during planning and strategic development stages, the report found.

Practices some respondents use to build partnerships at their organizations include viewing each function from a business—not just an HR—perspective; understanding the operational side of their business by learning functions of business units; having face time with business partners to foster better communication; and working toward implementing common objectives.

Partnership

Nearly all of those surveyed (98 percent) are a member of their senior management team, but 42 percent think they have less influence than other members of the team. A majority said strengthening HR’s partnership with senior management is a priority.

HR leaders tend to partner with internal functions such as information technology and internal audit rather than external functions such as operations, sales and supply, the report found.

HR can strengthen its partnership, it said, by getting involved in project implementation, not just acting as the team’s support, and by taking an early role in business initiatives and change management, especially in strategic planning and development, Resources Global says in its report.

Among those with a strong influence on the management team, HR executives in Europe seemed to be better represented (40 percent) than those in North American (25 percent) and Asia-Pacific countries (35 percent).

HR tends to assess its performance through such metrics as employee turnover, satisfaction, retention and engagement, the report noted. It suggests that HR do a better job of linking its goals and metrics to corporate strategy. The report pointed out that “only a small number of metrics measure HR’s contribution to business.”

Also, most HR leaders surveyed see hiring, increasing retention and more proactive succession planning processes as strategies that support company priorities, but few consider comprehensive training and cross-functional exposure important for enhancing HR services, the report found.

Other findings:

  • HR tends to partner more in North America on internal projects (72 percent) than in Europe (53 percent) or Asia-Pacific (45 percent) countries.
  • A project-oriented approach is more prevalent n North America, but there’s a greater tendency to use external resources than Europe.
  • HR leaders in North America demonstrated a higher than average level of collaboration with all aspects of business; those in Europe were better integrated with legal and sales.
  • European companies (88 percent) are more likely to provide project management training than employers in North American (66 percent) or Asia-Pacific (45 percent) countries.
  • HR leaders in North America think they have less influence within their executive teams than their European counterparts.
  • Organizational change was a higher HR priority in North America and Europe than in Asia-Pacific.

Kathy Gurchiek is associate editor for HR News. She can be reached at kgurchiek@shrm.org.

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