HR directors make it to board level, but remain unsure of their contribution to business
David Woods, October 25, 2011
New research looking at the relationship of the HR Director to the CEO and financial director across businesses has found that 40% of HRDs now have a place at the boardroom table with 87% being part of their company’s executive management committee, according to research commissioned by NorthgateArinso.
But despite the integration, 50% of HR Directors and above admit to not knowing the contribution their role makes to other functions and executives across the business.
The first findings of the research, which was commissioned by NorthgateArinso and conducted by Anthony Hesketh, senior lecturer at Lancaster University Management School in collaboration with the HR Business Network, suggests while CEOs have been working closely with their financial directors during the downturn, HR directors have been called to top table conversations.
The research assessed a sample of 150 managers and executives in addition to qualitative interviews with a select group of CEOs, finance directors and senior HR executives.
Hesketh said: "An anaemic, jobless, recovery is now giving way to increasing announcements of redundancies as fears of another capital crunch grips company leaders. 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."
Steve Foster, business consultancy manager at NorthgateArinso, added: "There is no doubt that the business savvy HRD 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 - 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. What HRDs now have to do is 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. "