HR is increasingly finding a role at executive level as employee issues have come to the fore during the economic downturn, a study suggests.
Research by Dr Anthony Hesketh of Lancaster University Management School found that 87% of HR directors now have a place on companies’ executive management committees, while 40% have a seat on the board.
According to Hesketh, the HR function now forms part of a “golden triangle” for top-level conversations, alongside finance directors and chief executives.
“An anaemic, jobless recovery is now giving way to increasing announcements of redundancies as fears of another capital crunch grips company leaders,” he said.
“With recent labour-market data taking a turn for the worse, organisations are once more looking at where their cloth can be cut accordingly. It is in the essential role as a value broker of their company’s talent that HR directors have emerged as critical friends of CEOs.”
But the study also suggested that HR still has work to do to broaden its own understanding of the company’s wider activities, with 50% of those surveyed admitting they did not know how their role affected those working in other functions or the impact they had on other company executives.
Glen Kieran, founder of HR Business Network, which helped to compile the research, said: “This research shows categorically that HR directors are being required more than ever to deliver on business strategy, to be fully aligned to business objectives and to actively demonstrate where their actions impact the bottom line.
“But it also appears that while many do understand how they need to contribute, an equal number need more clarity about how their role, or the role of HR, fits within the organisation in these chaotic times.”
Steve Foster, business consultancy manager at NorthgateArinso, which commissioned the report, added: “There is no doubt that the business-savvy HR director is a valued voice for senior management to hear in these times.
“Tough choices are being made by CEOs and their boards as to where and how deep to cut and it’s a delicate balance between becoming streamlined enough to endure current economic headwinds and hanging on to enough of their capital investment in talent to succeed in the future.
“HR directors now have to prove they deserve their seats on the boards and start talking a language their CEO and financial director understands, which more often than not amounts to one thing: the bottom line.”
The full results of the research will be released in November.