Human resources departments have failed to enhance their strategic role in
organisations in the past decade.
The finding, in research by one of the UK’s leading management schools, is a
major blow to the profession, which has repeatedly claimed to have won greater
influence as people issues have grown in importance.
It found only half of HR directors have a seat on their organisation’s
Even more disturbing, 50 per cent of personnel directors said they are not
consulted when their company’s corporate strategy is being formulated.
The figures are virtually unchanged from 1992, the study of 1,000
organisations by Cranfield School of Management found.
"Despite all the rhetoric, the formal position and the influence of the
HR function has not increased… in the past decade," the Cranet report,
produced every four years, concludes.
The bleak picture for the profession is further backed by evidence from
Personnel Today’s quarterly reader survey. Nearly half of HR departments said
they are lacking key skills.
Having a seat on the board of directors was found to be a key indicator of
HR influence. The absence of HR from this level was attacked by the report’s
"One cannot imagine a company saying, ‘sound financial management is
our most important objective’, while at the same time having no director of
finance on the board," said Christine Communal, senior research fellow at
Cranfield. "It does not make sense. It is the same with HR."
Lynda Gratton, professor at the London Business School, said a lack of
commercial expertise among HR staff hinders the profession. People issues have
gained in importance, she said, but employers do not trust their HR departments
to make the vital strategic decisions.
"What this research is showing is that organisations are outsourcing
the strategic role to management consultancies."
Ward Griffiths, assistant director general of the IPD, disputed the
findings. He said people issues had grown in importance during the 1990s and added
that board-level status does not guarantee greater influence for HR.
By John Robinson