It’s no secret that business leaders are challenged by an extremely dynamic business environment in which they must work their corporate magic.
Characterized by technological innovation, blurring boundaries among industries, shifts in customer behavior, scarcity of talent, and huge variations in growth across regions, the business landscape requires all of us to contribute our best effort every day in order to have a fighting chance at success.
HR is at the Epicenter
Far from immune to these pressures, many would argue that HR is at the epicenter of this dynamic environment. Without question, it’s time for HR leaders to firmly claim the role as true strategic partners to help their organizations address and meet these challenges.
To fulfill this mandate, however, they need a clear view of their current capabilities, their priorities over the next three to five years, and ideas for the best ways to tailor efforts to improve.
Fortunately, help is available. The Boston Consulting Group has been surveying business leaders worldwide to gauge current capabilities and future priorities across ten HR topics, and the link between people management and economic performance. Published in conjunction with the World Federation of People Management Associations, the result was a report entitled Creating People Advantage 2014-2015: How To Set Up Great HR Functions.
6 key trends in talent management
Here are the most compelling findings from the report:
- HR capabilities correlate with economic performance. Companies that have strong capabilities in HR topics — such as talent and leadership; engagement, behavior, and culture management; and HR strategy, planning, and analytics — show significantly better financial performance than companies that are weaker in those areas.
- Analytics and key performance indicators (KPIs) give HR a seat at the table. There’s a strong correlation between the use of KPIs and the strategic role of HR. HR leaders who want a role in strategic discussions with the business must be able to quantify workforce performance. This goes beyond ‘input’ metrics, such as cost and head count, toward more sophisticated ‘output’ indicators, such as productivity.
- KPIs should link to strategic actions. Even high-performing organizations, which are generally more data driven, don’t use their KPIs systematically to formulate strategic actions. A clear prioritization and selection of KPIs and tools is needed to achieve best-in-class results.
- Leadership & talent management are in the most urgent need of action. Globally, across industries and regions, most respondents identified leadership, talent management, behavior and culture, HR and people strategy, employee engagement, and strategic workforce planning as the most urgently in need of action by their organization.
- HR departments need to be more consistent in their investment decisions. Many organizations need to invest more strategically in their HR efforts to build capabilities. Among the three HR topics rated as most important, companies showed merely average capabilities and they weren’t specifically investing to improve those areas.
- HR needs to listen more to internal clients. Non-HR respondents reported a strong need for action with regard to approximately 40 percent of HR topics, particularly in core HR capabilities, such as staff capabilities and communication.
Three hallmarks of great HR
By distilling a wealth of quantitative and qualitative data, the report also identified three (3) common themes that characterize top-performing HR functions.
- Connect by partnering with stakeholders inside and outside of the company to improve operational and financial performance.
- Prioritize by using data-driven insights to identify and focus on the most urgent HR priorities.
- Create an impact by using KPIs and steering tools to support the organization and its strategic goals.
What other ideas and actions have you found helpful?
The post originally appeared in a somewhat different form on OCTanner.com