Byline: Reg Birchfield
Human resource managers must become more strategic and business savvy to remain relevant to modern organisations. That is the unburnished opinion of Andrew Mackmurdie of global management consultancy Hay Group.
To gain or re-gain the "strategic ear" of enterprise leaders, HR managers must smarten up their use of the technologies available and make more meaningful connections between people, jobs, pay and performance.
Historically, HR did most of the work around organisational structures and work function. Now, according to Mackmurdie, the majority of these initiatives appear to be coming from the chief executive's office. "HR must get back to being part of the genuinely strategic discussions held in C [senior management] suites."
HR managers have, it seems, lost their way and become preoccupied with gazing at new practices, rather than making better use of tools already available to help them see things more strategically.
The profession, of course, views the future through a somewhat rosier lens. Surveys of HR managers and professionals consistently predict that more of their number will occupy seats at the board table or in the CE's office. "Don't be surprised if an HR executive becomes CEO of a Fortune 100 company," said a panel of top shelf American HR practitioners last year.
Mackmurdie, on the other hand, thinks that if HR is to remain relevant in the debate around strategy, structures, jobs and people it must make more effective use of current work measurement technology. "In the majority of NZ organisations, companies use their work measurement and job evaluation tools solely to establish or confirm employee remuneration levels. We are seeing a resurgence in the use of these evaluation tools in other countries, but not just in the remuneration space," he adds.
A recent global survey of top executives by The Economist Intelligence Unit found that managing a company's talent pool is "now too important" to be left to the HR department alone. It has instead become "the responsibility of the chief executive". It is a conclusion with which Mackmurdie partially agrees. "There's no doubt chief executives are now taking a great deal more interest in people," he says. "Consequently they expect a higher degree of output, professionalism and business savvy from HR managers."
HR managers must "look at things from a business perspective and use integrated tools" to maximise what they get from their investment. "There is a greater global recognition that the key organisational differentiator in today's world is the people it employs. The war for talent is real and worldwide," says Mackmurdie. "Organisations that manage and grow their talent more efficiently and cost effectively will differentiate themselves from others fishing in the same under-populated talent pool."
HR, it seems, is too often involved in an organisation's "nice-to-do" things and unfortunately appears to be left out of the real business-related decisions. That should and could change if HR managers took a different approach, according to Mackmurdie. "They must understand the consequences of the new reality that CEs and boards are now more aware of the importance of people to the fortunes of their businesses."
All the corporate leaders in The Economist study said that talent management was now their responsibility. A third of them spent 30 to 50 percent of their working time on the task. This shift in emphasis is a reflection of both the need to employ and develop good people and, the shortage of available talent.
There is a view that New Zealand employers are struggling with the paucity of good people but Mackmurdie thinks there is more talent about than is generally appreciated. "New Zealand has a lot of talent but we don't identify or challenge it early enough," he says. …