Senior executives have rated HR as the worst of all business functions.
An Economist Intelligence Unit survey of 555 global senior executives, including 226 CEOs, reveals that of the functions under review, more people rated the performance of HR bad than good.
No other function – not even the “notoriously unlovable” IT department – came close to being this unappreciated, researchers said.
The survey, sponsored by government agency UK Trade & Investment, found that almost a third of respondents rated HR a four or five (where five is poor), compared with 22% for IT, 20% for knowledge management/research and 20% for marketing/sales. Only 27% gave HR a one or two (where one is excellent), compared with 37% for IT.
The report’s author, Andrew Palmer, said: “People issues are near the top of the list of headaches for companies and their senior executives. Often, the HR department has responsibility, but does not have ultimate control.
“For example, people are recruited and retained for reasons that sit outside HR’s responsibility in many companies, with line managers dictating the career development of their staff and salary being dictated by the board.”
To address the issue, HR departments must prove their importance to the organisation in hard financial terms and take control of key strategic processes, Palmer said.