Exclusive Research - The Advancing HR Function

Strategies for Attaining Future HR Excellence

Exclusive HR.com Research

 

Despite all the advancements in technology, HR often still finds itself trying to balance two roles: Rule-driven bureaucrat and strategically motivated talent manager. However, HR has striven to become a better internal business partner, and it has vied to become seen as a valued leader and communicator. How well has it succeeded? HR.com conducted an exclusive research of HR professionals to find out.

Over the last decade or two, HR has striven to evolve from an administrative function to a more strategic one. One feature of a strategic function is that it is more likely to report directly to the CEO as opposed to the head of some other department, such as finance or operations, or to someone in a VP position.
 

One of the reasons to report directly to the CEO is to gain a seat at the leadership table so that HR can have strategic input into the executive decision-making process. In about three-quarters of organizations, HR has been either very successful (39%) or fairly successful (35%) at gaining a seat at the leadership table. In High Performance Organizations (HPOs), however, the numbers are starkly higher, with 85% saying HR has been very successful in this area and another 12% saying it has been fairly successful.
 
A quarter view their HR departments as very successful at becoming a trusted business partner.

Strengthening Its Role in Several Areas
For all the talk of HR metrics and analytics, the HR profession still shows a sizable skills gap in this area. Only 12% of respondents said their HR functions are very successfully measuring the impact of HR in their organizations, with another 36% saying they are fairly successful in this area.
 
Change management is difficult, but HR respondents feel as if they have developed skills in this area. Two-thirds state their departments are either very or fairly successful at championing change, though only a fifth fall into that very successful category. This suggests that HR needs to continue to make progress at change management. After all, in today’s fast-moving marketplace, this will become increasingly important.
 
Most respondents (70%) believe that talent shortages will have a significant impact on their organization’s HR function over the next three to five years. The second most widely cited factor (58%) is technological change.

There is virtual consensus among study participants that effective communication will be extremely important to the future success of HR departments. Seventy-three percent called it essential and another 24% deemed it important. Not far behind was the skill of “demonstrating leadership,” reported as either essential or important to HR’s future by 96% of participants. Nearly as important were two other skill sets: “executing key initiatives” and “working as a team player.”

HR departments tend to suffer from some massive skills gaps, if we compare the importance of certain skill sets to the proficiency HR professionals have in those areas. For example, 97% of respondents said that “communicating effectively” is either essential or important in their organizations. However, only 52% said that their HR practitioners were either excellent or above average as communicators. That leaves a 45 percentage point gap . Using this type of analysis, skills gaps were apparent in virtually all HR skills areas, but the gaps were much larger in some areas than others.

The HR functions that enhance workforce skill levels will be key in the near future. There are three HR functional areas in that over 60% of respondents identified as critical in the near future:

 
What they all have in common is that they are focused on ensuring organizations have people with the right skills in the right positions. The fourth most widely cited functional area—organizational development (OD)—is less focused on the skills of employees and more focused on overall organizational health. Many HR professionals view OD as critical to HR’s success because organizations themselves must quickly adapt to changing technologies, new competitors, innovative work processes, varied priorities and more.

For the areas where technology will play the largest role over the next several years, the top responses were, by a wide margin, analytics and employee self-service. Analytics is the area where HR professionals most expect technology to play a large role. Perhaps respondents believe that new HR technologies will increasingly deliver useful metrics and data.
 
In another recent HR.com study of HR professionals, only 11.5% indicated that their organization does not yet use some sort of self-service application. In coming years, HR is likely to continue to refine such technologies, making them easier to use for employees and taking a growing amount of “administrivia” off the plate of HR.
 
HR—or at least a part of it—will continue to evolve into a more strategic function. Half of respondents predicted “HR will be transformed into a much more strategic function as administrative duties are automated or outsourced to others.”
 
We asked respondents to choose from among six abilities that we believe will be key in the next three to five years. The most commonly chosen was the ability to influence organizational change, followed by the ability to work with non-HR managers to achieve business goals. Change is rampant in today’s organizations, and the best way to implement genuine change is by modifying the underlying corporate culture.
 
In light of these research findings, what steps should organizations take? Read our complete research report with key takeaways.

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