The report, Rethinking Human Resources in a Changing World, published yesterday by the Economist Intelligence Unit and sponsored by professional services company KPMG, found that HR is struggling with the challenges of managing a global, flexible workforce. It needs to find ways to engage with workers that will help address these challenges, the report added.
Robert Bolton, partner in KPMG management consulting and global lead of the firm's HR Centre of Excellence, told HR magazine: "HR should be the critical value driving function in an organisation, large or small. It can be more important than any other function, including sales and marketing.
"There are many qualitative and quantitative measures that will define HR's success in the coming years. These include capacity, where there needs to be a clean and clear definition between chief executives and the front-line employees. Some executives of global companies would be horrified to find how their organisational culture has changed and grown over the years.
"There will be a change in capability - the retention of people in critical roles.
"Compliance will change, as it now needs to be integrated with the organisation's overall business strategy.
Bolton added: "These metrics can be measured by taking steps such as checking career progression and retention of staff in critical roles. HR teams must make better use of technology such as social media to provide their managers with the data they believe will be of most use."
The report stated that HR would remain the "poor relation" at the boardroom table until it fully embraced technology. HR needed to move away from its tendency to report historical data, in favour of forward-looking analytics designed to improve business understanding of employee demands and desires.
Bolton said: "This survey shows that, at the very least, HR has a perception problem, though in some cases it may have actually failed to deliver real value.
"Given the high unemployment rates in many countries, you would forgiven for thinking that retention is an easy task for HR, but with employee engagement levels an increasing concern more effort must be put into understanding staff needs before today's employees become tomorrow's alumni."
In the survey, three-quarters of the executives questioned said that their workforce is becoming increasingly global, virtual and flexible, but just 25% say HR teams within their company excel at sourcing and retaining international talent.
A quarter believed that HR teams are unable to support their company's globalisation strategy, despite 'hiring international talent' being a key concern for the 'globally-minded CEO'.
The report by EIU and sponsored by KPMG surveyed 418 C-suite executives.
