HR salaries soar despite chief executive questions over value of the profession

The reputation of HR professionals among chief executives and other senior managers remains at an all-time low, but their salaries are growing well ahead of inflation, according to two major studies.

Global research from consultancy Accenture, which questioned CEOs and other senior executives at companies in the US, Europe and Australia, revealed that just one in 10 respondents was “very satisfied” with their HR and training functions.

But the National Management Salary Survey, by the Chartered Management Institute (CMI) and research firm Remuneration Economics, showed that the average HR manager’s earnings have risen by almost half over the past 12 months.

Accenture’s High Performance Workforce study uncovered a number of possible reasons for the lack of trust in HR, including HR’s lack of connection to business needs and profitability.

Only 36% of the 250 respondents said their companies tailored their HR and training support to each function’s needs and their contribution to the organisation; more than 40% admitted their organisation did not evaluate the impact of their HR and training efforts against profitability; and 50% said they did not evaluate those efforts against company revenues and sales.

The study also revealed that other function heads rarely got involved in people issues. Only a small percentage of respondents said the heads of customer service (29%), finance (31%) sales (34%) and strategic planning (37%) were highly involved in human capital management (HCM) initiatives.

Peter Cheese, global managing partner in Accenture’s human performance practice, said companies needed to look at HCM initiatives more holistically.

“Some companies focus well on one or two aspects of human capital management, such as learning or internal communications, but the best take a broad view of managing their workforce,” he said. “These are the companies that vastly increase their chances of becoming industry leaders.”

The CMI survey of almost 22,500 individuals across a variety of business functions painted a brighter picture for the HR profession.

It showed that HR managers earned on average £46,429 last year, compared with £31,763 the previous year. The 46% rise compares with an overall average increase across all functions of 5.7% in earnings.

In contrast to the Accenture findings, the huge leap in pay could signal that organisations are increasingly recognising the value of the HR function, according to Jo Causon, director of marketing and corporate affairs at the CMI.

CMI figures for 2004 put HR at the bottom of the league when it came to earnings, but in the latest survey the function lies third behind general management and finance in the pay stakes. HR managers have jumped ahead of IT, purchasing and research and development managers.

HR directors have also seen their earnings rise. They earned on average almost £150,000 last year, up from £138,000 the previous year.

HR managers are poor relations in pay stakes




 

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