Dream of HR as strategic business partner
is yet to become a reality
Senior
HR practitioners have every expectation of becoming strategic business
partners, but is this long-standing aspiration now becoming a reality? In the
latest in our series of research findings, drawn from the 2003 Cranet survey of UK HR functions,
we review the survey’s evidence to answer this question.
Business
strategy creation is made difficult by shortening planning horizons,
uncertainty in the planning environment, and the pressures of current events
that can prompt ‘firefighting‘
rather than strategic action. But one
measure of HR’s strategic
position in a company is whether or not it is represented on its main board.
The survey shows the number of HR directors on the main board to have fallen
since 1999, from 53 per cent to 47 per cent of companies. HR directors continue to sit a step below the
main board.
Another
indicator of strategic level activity by HR is the extent to which there are
formal processes for people planning in the organisation. Without a written
strategy and an HRM input to the process, it is difficult to see how a claim to
a strategic role could be sustained.
Between
1999 and 2003, the number of organisations with a written business strategy
stayed the same (81 per cent). However, the number of companies with a written
HR strategy increased over this period from 57 per cent to 62 per cent.
A
5 per cent increase in public sector boards with a written HR strategy may be
due to the more formalised approach in the public sector and may be a
consequence of a culture where written policies and strategic intentions help
explain how public money is spent. Equally, the public sector has gone through
considerable change and expansion, putting emphasis on workforce planning,
training and development.
The
number of organisations with a written HR strategy increases according to size,
so 78 per cent of companies with over 2,000 employees have a strategy.
The
HR role in creating business strategies has, by contrast, diminished. The stage
at which HR is involved in the development of business strategy shows a slight
decrease, and there has been a rise in the number of organisations
where HR has not been involved in the development of business strategy. HR involvement
in this area varies according to organisational size: from 2,000 employees
upwards, 63 per cent of organisations are involved from the outset of strategy
development.
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The
data on who has responsibility (line management or HR function) for the main HR
policy areas shows that HR still takes the prime responsibility in most areas.
Workforce expansion or contraction is still a line responsibility, confirming
that HR managers are not necessarily involved at an early stage in talks about
the size and structure of the business.
We
can conclude from these results that while HR is undertaking a major strategic
role for many businesses, most commonly, it plays a critical role at the
implementation stage.
