In brief

In brief

  • HR is on a transformation journey, shifting focus from enabling back-office efficiency and effectiveness to becoming a strategic business partner.
  • Report findings highlight areas for HR improvement—for example, the need for data-driven planning, customer-centricity and innovative technologies.
  • Businesses are ready for strategic HR. Leading HR organizations are ready, too. It’s time to ignite HR’s full strategic potential.

HR is thinking strategically and is aligned with business priorities

When asked to identify the top challenges they face, the HR executives we surveyed pointed to corporate performance and competitive agility.

Top challenges named by the HR executives surveyed:

Top challenges named by the HR executives surveyed: 59%: Increasing profitability, 49%: Keeping up with competitors, 49%: Identifying/generating new business

These top-three challenges matched those identified by the full set of respondents in the overall study—a survey of 460 senior-level executives across 13 industries and 12 countries.

HR is even more attuned than the general business population to major marketplace and technology themes and objectives. Ninety-two percent of the HR executives surveyed agree that disruption and competitive threats are driving investments, compared with just 78 percent of all leaders.

The business is primed for HR leadership

  • Asked about critical enablers to achieve business goals, nearly two-thirds of those in the overall study (63 percent) identified “reskilling the workforce” as particularly important.
  • That puts workforce retooling on par with other business and technology enablers, such as automation and AI (62 percent); risk mitigation (63 percent); and use of cloud technology (64 percent).
  • The need to attract top talent through recruitment also stood out. Talent acquisition was the second highest ranked (64 percent) when asked about priorities for transforming various business functions.
Businesses acknowledge the need for a more transformative approach to attract and retain top talent.

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Obstacles to HR serving a strategic role

With all the support it’s receiving from the business, HR still faces hurdles in earning a stronger strategic role in the organization.

  • Perceived as “static” - Participants in the overall survey noted that talent development and recruiting have not changed much in the past 18 months.
  • Digital skill gap - Businesses are looking for people trained in higher-level digital skills, but it appears that HR does not acknowledge or have the resources to address this need.
  • Underappreciation of automation and AI - Only 44 percent of HR executives noted the importance of the use of automation and artificial intelligence as business enablers, compared to 62 percent of the overall respondents.
  • A missed data opportunity - While 51 percent of respondents in the overall study named “making data-driven decisions” the top business driver that will have a major impact on the business, HR significantly lagged the field here at 28 percent.

Igniting the fire for strategic HR

HR leaders looking to improve HR’s strategic relevance are taking a new leadership stance. Specifically, they need to:

  • Own their role as business professionals - They need to be broadly business-relevant—driving the business agenda forward through the people and underlying programs and policies that support them.
  • Blaze the trail on customer-centricity - HR should step up to establish the skills, capabilities, performance goals and metrics needed to support customer-focused operations.
  • Create an agile, responsive workforce by breaking down siloes - As HR leaders strive to use analytics to predict workforce needs and create a more agile workforce, they will need to bring together and work with all process, technology and data owners.
  • Aim higher when it comes to reskilling -Businesses need higher-level, digital skills. A strong business case can be made for training investments in the higher-level skills needed to keep a business competitive.
  • Drive decisions, actions and innovations with data - Data is the currency of future success. HR needs to look beyond the typical HR data set to gain the insights the business requires.

Jill K. Goldstein

T​alent and HR – Business Process Services Lead


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