HR career Q&A: Convincing the CEO that HR is as important as finance

Q How do I convince my new chief executive that the HR director is as important to the company as the finance director or chief information officer?

The HR expert’s view

If you read any annual report, among the first words you will read will be something like “people are our greatest asset”. This must be true – no people, no business. Why, therefore, would you not have HR at the top table? And why would anyone even ask the question? This becomes even more apparent when you accept that the largest single amount of money businesses spend is on staff.

This is operationally managed through the line or the matrix, but shouldn’t investment in people be managed strategically and measured properly?

You know how much a person costs, you know how much their space costs and – if you have a proper review system in place – you should know what they produce and the best way to manage and improve that capability. The place for that to start is at the top table – look at the best companies and how they manage their assets. They will have succession planning in place; they will have good motivation and reward schemes; they will train – formally and informally – and they will deal with problems quickly, and objectively.

Too many companies pay lip service to these things. A strategically engaged HR function is not only accretive but also acts as the “conscience” of the business in ensuring that things are done correctly. The starting point is for the HR director to “speak CEO”. Understand what the business does and what it needs to achieve and relay that in terms that the board will understand – financially objective measures, shareholder value and so on.

Some of the responsibility lies with an outdated image of HR or personnel as a “touchy feely” kind of function, some of it, frankly, with low calibre HR professionals not equipped for the kind of strategic engagement required. There is also a lot of poor line management out there. These problems are all fixable; the aims are all achievable but only if led from top, front and centre.

Rachel Richardson, head of HR, Sportingbet


The recruitment expert’s view

It’s really a quite straightforward answer: the HR director must speak the same language as the rest of the organisation which, frankly, has not always been the case. HR functions must demonstrate their value to the business through the use of metrics and hard data. Having quantitive measures changes the dialogue the HR director can have with the rest of the business and will also help drive away the common misconception of HR as a purely administrative function.

We all know HR plays a critical role in driving corporate competitiveness: the link between people and business performance, supported by robust quantitive research on performance and engagement is irrefutable. There is a proven correlation between high engagement levels and profitability, productivity, employee retention and customer loyalty. This is the common language of the business. Deliver an improvement in engagement and the bottom line will be positively affected.

Richard Colgan, chief executive, Oakleaf Partnership

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