Staffing Issues Critical to Business Strategies, SHRM Report Finds

Staffing, employment and recruitment are among the most critical HR function areas that contribute to their organization’s business strategies, according to a Society for Human Resource Management (SHRM) report released May 28, 2008.

How HR functions are viewed within organizations depends on factors such as the size of an organization’s staff, its employment sector and the dynamics of how the organization operates, according to HR’s Evolving Role in Organizations and Its Impact on Business Strategy.

The findings are based on responses from HR professionals SHRM surveyed online in September 2007. Respondents were employed by organizations operating in the United States.

The study’s aim was to understand how HR is approached in the organization in which it operates, which “is crucial to understanding how HR contributes to business strategies and the value that it is poised to bring to the organization,” according to the report.

The top three critical HR function areas, the study found, are:

• Staffing/employment/recruitment, cited by 52 percent of respondents.
• Training and development, 29 percent.
• Employee benefits, 29 percent.

“This indicates that HR is most likely to support the organization’s business strategy through human capital-related areas such as building, developing and maintaining the workforce,” the report notes.

Staffing and employment benefits issues often are intertwined, according to John Lewison, SPHR, a SHRM Organizational Development Special Expertise Panel member quoted in the report.

“We are constantly examining our benefits programs, not only from a competitive perspective but in terms of cost-effectiveness,” said Lewison, HR director for MDRC, a large policy research organization in New York City.

Another member of the Special Expertise Panel member sees the top three function areas that were identified as intertwined with Generation Y.

“The first critical area confirms the challenge HR professionals have in recruiting and retaining Generation Y employees,” says Fernan Cepero, vice president of HR for the YMCA of Greater Rochester, N.Y., in the report.

The second critical area—training and development—“validates” the training and development initiatives that must appeal to that generation’s desire to learn and the technological applications that are involved, Cepero added.

Benefits, as the third critical area, “requires HR to attract/sell Generation Y on benefits such as flexible schedules, telecommuting and full tuition reimbursement” because “HR professionals do not expect to win their loyalty by talking about traditional benefits such as pension vesting or funeral leaves.”

Function areas that are of lesser critical importance, according to HR professionals surveyed, are equal employment opportunity/affirmative action (3 percent), international HR management (1 percent) and research (less than 1 percent).

Other key findings in the report:

• Performance management; employee communication plans/strategies; policy development and/or implementation; and strategic business planning are most likely staffed in-house.
• Employee assistance/counseling and flexible spending account administration are HR responsibilities most likely to be outsourced.
• 61 percent of publicly owned for-profit organizations and 41 percent of private owned for-profit organizations had formal systems to collect HR metrics.
• Budget (56 percent) and headcount (46 percent) are the top organizational factors limiting HR’s efforts and effectiveness.
• Their organization’s business strategy contributes to deciding whether to staff, outsource or eliminate various HR roles, 50 percent said.

Responsibilities that are not directly related to HR but that are necessary to an organization’s operations are folded into HR by default at many organizations, the report found.

One half of those surveyed have other non-HR duties that might include facilities, information technology and administration. This is especially true for small organizations (79 percent) compared with medium-sized (48 percent) and large organizations (22 percent).

Understanding how HR is approached sheds light on HR professionals’ career progression expectations in their organizations, and on non-HR business leaders’ perceptions and mentoring of HR professionals in an organization, the report noted.

HR needs an awareness of the various ways it “can assist the organization in meeting its goals,” the report notes, pointing out that “departmental mentoring can help HR professionals become strategic contributors to the organization’s business strategy by increasing their understanding of other key functions within the organization.”

“Exhibiting a willingness to expand focus and gain broad understanding not only of HR functions but also of the business operations,” the report concludes, “will increase HR’s scope of influence and promote recognition of HR for having the potential to support and enhance organizational operations.”

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