HR and Top Execs Agree on Human Capital Challenges

Developing next generation of leaders is top long-term priority.

By Jen Schramm Oct 1, 2015

HR Magazine October 2015 HR and the C-suite don’t agree on everything, but they do see HR’s future in much the same light. Both believe that developing the next generation of leaders will be the top priority for their companies over the next decade, according to new research from the Society for Human Resource Management.

Despite agreement about the future, HR and C-suite executives don’t see eye to eye in their assessment of today’s most pressing human capital challenge. HR professionals say it’s employee engagement, while executives point to the retention of talented employees.

But both see the importance of addressing skills gaps and providing competitive benefits and compensation packages, both now and in the future. Not surprisingly, HR professionals view these issues as being more urgent than senior executives do—probably because the former are immersed in human capital issues every day. So the task for HR professionals is clear: to educate executives about the challenges on the ground level and to ensure that company leaders make those challenges priorities when developing business strategies.

The good news is that both HR pros and top executives say their organizations are pursuing processes, strategies and tactics to meet their current and future human capital needs. That’s likely why the two groups predict that some of the difficulties they are experiencing today will be more manageable tomorrow. And while business leaders seem to understand the pressure HR is under to do more with less in the aftermath of the Great Recession, both they and HR expect constrained resources to be less of an obstacle in the future.

Other top HR-related challenges identified by HR professionals include:

  • Moving HR from a transactional to a transformational role within the organization.
  • Dealing with the growing complexity of legal compliance.
  • Creating an effective HR infrastructure that supports an employee-centric, service-oriented HR organization.
Moving forward, HR practitioners know what they’ll need to succeed. The top factors they identified are:
  • Strong support for the HR function from senior leadership.
  • The efficient use of HR information systems and technology.
  • A greater investment in employee skills and development through training and education.
  • Strong and effective organizational leadership.

While these challenges are formidable, HR is well-positioned to work closely with the C-suite to overcome them. At most organizations, both HR and top executives view human resources as having more of a strategic function than it has had in the past. And they plan to keep evolving the department to become even more business-focused and measurement-driven.

Bottom line: Increasingly, HR professionals don’t think so very differently from the top leaders at their companies about the challenges they face. Maybe that’s because HR pros are successfully demonstrating the importance of human capital issues to their C-suite colleagues and maybe it’s because more of them are becoming leaders themselves.

Jen Schramm is manager of the Workforce Trends program at SHRM.

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