The Human Capital Institute (HCI), a global institution for strategic talent management, and SuccessFactors, an SAP Co., have released a national study aimed at identifying the practices and strategies that characterize high-impact HR functions.
As more organizational leaders recognize the value of the strategic management of human capital, there is an increased focus on how HR professionals can make an impact to their business. Perceived inability to manage talent efficiently and effectively can create negative impressions of HR. By exploring how high-impact HR functions operate and identifying the barriers often encountered by HR professionals, the study sets out to uncover some of the challenges that HR has faced in contributing to the organization's bottom line. The research also highlights opportunities for HR professionals to provide strategic value to their organization.
“Our research offers a glimpse into the major challenges that prevent today’s HR professionals from operating at an optimal level and showing the C-suite the deep value they bring to their organizations,” says Carl Rhodes, HCI chief executive officer. “Understanding these barriers and identifying the methods and best practices to get over them is the key to the development of a high-impact HR function.”
Insights from the study include:
- Businesses need tangible and intangible investments to create a high-impact HR function that has more engagements with C-suite executives, a larger budget, a stronger relationship with the IT department, more time to spend on strategic tasks and more metrics, as well as better HR leaders and stronger HR talent.
- The biggest barriers to HR program effectiveness are a lack of strategic focus and inferior human capital management technologies, rather than a lack of HR staff or weak leadership.
- Despite being the strategic leaders of HR, C-level leaders, executive vice presidents and vice presidents spend 43 percent of their day mired in transactional tasks.
- One of the biggest struggles in developing an effective HR function is the poor or limited perception by other employees and business units, particularly for HR leaders’ leadership skills.
- Underutilizing metrics, such as market performance and unemployment numbers, undermines HR’s ability to be strategic and future focused. At the same time, 38 percent of survey respondents said that more advanced technologies are needed to be effective at using HR metrics.
“Our study found that the inability to see organizational priorities is the biggest hurdle preventing HR from being more strategic. It is, therefore, clear that HR professionals can benefit from aligning their practices more closely with overall business goals,” says Dr. Karie Willyerd, vice president of Social Learning and Adoption, SuccessFactors. “This can be accomplished by working collaboratively with other business units and line managers to understand the needs of the organization and figure out what can be done to meet them.”
“We’ve seen that organizations with high-impact HR functions typically enjoy greater financial success and that’s again been validated here,” adds Shawn Price, president of SuccessFactors, SAP Cloud. “Leveraging advanced HCM technologies and the insights connected applications deliver enhances the value of HR, and allows HR professionals to be recognized as equal-footing partners to the business.”
The study’s findings are based on the responses of more than 370 participants, ranging from individual contributor to C-level positions at their organizations, 89 percent of which are headquartered in North America. Respondents’ organizations ranged in size from less than 100 employees (17 percent) to more than 20,000 employees (19 percent).
To download a copy of the report, visit www.hci.org/hr-research/high-impact-hr-challenges-and-opportunities-related-building-effective-strategic-and.