HR forced to neglect business areas as economic slowdown continues

HR departments are being forced to neglect key business areas including leadership development, productivity and growth as the economic slowdown continues, it has emerged.

A survey of HR heads at 102 organisations, commissioned by recruitment process outsourcing firm Ochre House, found that eight in 10 HR departments had admitted they did not have time or resources to concentrate on strategic HR activities because they were being held back by a lack of funds from their chief executives or board of directors.

The poll found the competitive labour market and heightened economic slowdown had driven HR directors to steer resources towards basic transactional HR activities such as recruitment and training, and away from five main areas.

These were: leadership development (94% of respondents) retention (93%) attraction (91%) productivity (90%) and growth (86%).

Chief executives simply weren’t funding HR teams to carry out strategic work during the tightened enconomy, respondents said.

One HR director from a major UK retailer told the survey: “There is still a disconnection between the board’s vision for our people and actual investment. As things tighten in the market we are once again in the unenviable position of having to rationalise in HR, which will stop us realising core people goals for the business even in the short term.”

Damien Stork, consultant at Ochre House said: “We found most heads of HR admitting that their departments were currently spending the bulk of their time on recruitment and basic HR services. However it was clear that they actually wanted to reduce this commitment and redeploy resources to workforce planning and leadership development.”

The three major barriers to redeploying resources into these more strategic areas were defined as inadequate systems and processes, insufficient resources and current levels of skills in the department.

A significant proportion of respondents either already had outsourced or were considering outsourcing in specific areas such as recruitment (51%) and training and development (42%).

However, despite a definite incline to outsource the more ‘transactional’ aspects of HR, Stork said nearly two-thirds of respondents remained hesitant because they believed they were “too important” to the business.




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