Top Executive Challenges Are Ultimately People Challenges
By Dr. Amy Schabacker Dufrane, SPHR, CAE
HR Certification Institute
When thinking about the top companies in the world, we often point to financial growth, excellent customer service or innovative use of new technology. But when you get down to it, it's the people at organizations who are ultimately the drivers of business results.
Business leaders -- perhaps as never before -- are embracing the importance of the people in their organizations as quantifiable change agents for industry leadership. Working with HR teams to improve talent strategy and employee engagement is among the top priorities for corporate executives in 2017, finds new research conducted by Dow Jones Customer Intelligence in collaboration with HR Certification Institute® (HRCI®).
How important is HR today? Many companies now market HR and people excellence to external stakeholders. Infineon Technologies, a semiconductor manufacturer, for example, produces a People Excellence in a High Performance Company report. Starbucks publicly links outstanding customer service to culture and employee-driven business strategies.
Untapped Talent Management Potential
C-suite executives rank "talent strategy and employee engagement" fourth as a top business concern, only behind "financial growth," "customer experience" and "new technology adoption." "Cybersecurity" ranked fifth, based on the survey of 300 executives. Additionally, 95 percent of executives agree that hiring and retaining the right people affects the bottom line.
However, there is room for improvement.
While over 70 percent of executives surveyed say their companies are "above average" or "industry leaders" in customer satisfaction, profitability and revenue growth, and 68 percent give their firms the highest marks for innovation, only 59 percent feel as positive about attracting and retaining talent. The rest (41 percent) say their organizations are just "average" or "below average" when it comes to attracting and retaining talent.
What, specifically, keeps executives up at night about talent management? Executives say their top concerns are:
* A lack of candidates with the right skills, experience and knowledge.
* Leadership development and succession planning.
* Anticipating workforce skills for the future.
* Poor retention of top talent.
* Providing attractive career paths.
* Managing a multi-generational workforce.
* Improving organizational culture.
A Company-Wide Challenge
Such challenges place HR center stage in the call for stronger people initiatives that add business value. But this mission cannot be completed by HR alone. Led and facilitated by HR? Sure. But line managers and business heads must also play important roles to:
* Gain at least foundational HR competencies and learn how to identify immediate issues in HR programs.
* Improve abilities to track and identify high performers and reward them.
* Champion the company's reputation as a great place to work.
* Develop strategies to extract optimal performance from every employee.
* Own higher success rates for companywide change initiatives.
* Create improved flows of information between employees and supervisors.
Such initiatives are more than HR drivers. They are business drivers that must be aligned around a company-wide goals and commitment to growth. They must be measurable and have top-line as well as management support.
However, getting the company-wide buy-in needed to drive high performance through people will take work. In an earlier HRCI study, only 19 percent of line managers now believe it is their roles to take ownership of strategic HR initiatives. Also, only 51 percent of line mangers believe that their company's current HR practices are "very" or "extremely" effective. Line management needs both a better understanding of HR roles and capabilities as well as more front-line proof of strategic HR benefits.
HR must play the role of facilitator, consultant and strategic guide to bring all parties together. At the same time, top-level executives must embrace higher expectations of HR professionals as strategic business partners and contributing members of the executive boardroom. Line managers, too, must embrace talent management and have at least a basic understanding of HR principles and strategies.
Having now arrived with a seat at the table, HR's next transformation is working hand-in-hand with senior and line managers to drive greater people and business results. The HR leaders who can make these vital interconnections will generate more than administrative outcomes -- they will drive enhanced business performance. That's something everyone in an organization can get behind.