Most executives don´t think much of HR: not a shocker in 2006 or any other year. But it turns out that our business respondents´ opinion of the value of human resources correlates with their beliefs on other aspects of the organization. You may be surprised to learn what sorts of values go together with relatively high esteem for HR.
When we asked our respondents to rate the strategic value of various functional departments, HR came in 7 out of 9, and scored exactly as it did in last year´s survey. This doesn´t mean that executives think HR is dispensable; everybody knows the trains can´t run without the legal or administrative functions, which scored even lower.
While our respondents may be lukewarm on HR´s importance in aggregate, HR does have some true fans. Who are they? The same folks who value employee retention and learning and development. Executives who believe in developing human capital also believe that HR matters; the survey doesn´t say whether one belief causes the other.
Respondents from firms that track the ROI from HR activities place more credence in HR´s value. Is this because they´ve seen the numbers and believe, or because firms don´t measure what they think doesn´t matter? Either way, HR management that asks to be measured gets credit.
Business respondents who value HR put their money where their mouths are: They think HR should have greater say in the budget allocation process. In the 2000s, with scrutiny of spending at an all-time high, this result speaks well of human resources departments whose strategies hew to the company´s bottom line.