HR on the Brink of Becoming a Strategic Business Unit
The time has come for HR to take on a more strategic role in the growth of an organization. As HR transitions from being just a cost center to becoming a strategic business unit, a new study released by the HR Certification Institute (HRCI), which certifies HR professionals, titled “Strategic HR Emerges as a Company-Wide Priority” reveals that this movement lacks commitment and support even though the new digital disruptions are making organizations rethink how they manage, lead, engage, and develop their people.
“The shift in structure changes the way we lead, manage and move people throughout the company. It also pushes us to continuously learn faster than ever. Companies must try new things, such as crowd sourcing in which you obtain ideas, content and services through an online community, rapidly deploy new products and services, iterate, and at the objective and measurable value that HR can quickly learn what fails and what works,” says Josh Bersin, principal and founder of Bersin by Deloitte, Deloitte Consulting LLP. “This customer-centric way of doing business has shifted decision-making to the edges of the company and requires a new way of thinking about management and HR.”
While endless academic studies, disruptions by HR tech, and the excessive proliferation of HR specialists and consultants is helping HR evolve into a more strategic initiative, the study found that only 29% of HRCI certified companies had adopted HCM or Strategic HR. But, in the companies that had adopted strategic HR, an overwhelming 87% were somewhat or strongly satisfied with its outcomes.
The study also revealed that while 77% of HR leaders/ practitioners were most focused on reducing risks due to compliance and unfilled positions, and 78% were focused on talent search, only 38% were focused on enhancing the performance tracking. Additionally, more than 60% found HR leaders/ practitioners to be very or extremely effective in tactical and administrative activities and more than 45% found them to be very or extremely effective in strategic activities.
The study also found that there was a strong disconnect between the non-HR C-Suite and HR leaders about who is responsible for strategic HR. While the HR leadership thought that both were equally responsible, the non-HR C-Suite believed that strategic HR was the sole responsibility of HR leadership. This disconnect could be the main reason why only 29% company have adopted strategic HR.
The main obstacles which were hindering the adoption of strategic HR included too much time taken to react to trouble in crisis mode, a significant disinterest at the C-Suite level and a mindset that did not want to change the way things were working.
“HR professionals must take the lead, but organization-wide support is required for success,” says Amy Schabacker Dufrane, Ed.D., SPHR, CAE, and CEO, HRCI. “HR practitioners must continue to commit to transforming the profession to add more business value, but equally essential are the roles that C-Suite leaders and line managers play. The good news is that the C-Suite and line managers are ready for new HR ideas that create competitive advantages.”