New research has revealed a perplexing conundrum happening right now in C-suites around the globe: CEOs are more panicked than ever about their people strategy, yet are increasingly distant from HR.
In the Global Leadership Forecast 2018—published by DDI, The Conference Board, and EY—C-suite executives said that their top two challenges were developing “Next Gen” leaders and failure to attract/retain top talent. These critical people issues presented far larger challenges than other more newsworthy issues, such as cyber-security, economic growth, recession, and global political uncertainty.
Despite this growing pressure to develop a strong people strategy, HR is struggling to exert influence. In the Global Leadership Forecast, we asked more than 25,000 leaders from around the world to categorize how they saw HR:
- Reactor: HR responds to business needs, ensure compliance with policies, and install basic talent initiatives.
- Partner: HR works toward mutual goals with line managers, share information about talent gaps, and provide HR solutions.
- Anticipator: HR uses analytics to forecast talent needs, and provides insights and solutions to ensure high-quality supply of talent. They also link talent planning to business planning.
Unfortunately, only 11 percent of leaders said they believe HR serves as an anticipator. More troubling, that rate is down sharply from an already-low 20 percent in 2014.
As leaders’ faith in HR is deteriorating, HR often overestimates its standing. While only 21 percent of HR professionals consider themselves reactors, a full 41 percent of business leaders place their HR counterparts in this category. HR is seen as a partner by 48 percent of business leaders.
The good news is that the study also revealed several key actions that can help HR enhance its reputation to become an anticipator. We found that HR Anticipators are more likely to:
- Link talent planning to strategic planning: Anticipators make it a priority to link talent and business strategies, achieving a true “seat at the table” for business planning.
- Invest more development dollars per leader: HR Anticipators are able to secure a higher average per-year investment ($2,588 per front-line leader, $4,256 per senior leader) for leader development.
- Rely on assessment data to make hiring and promotion decisions: Anticipators are more likely to use objective tools and systems to identify and advance leaders.
- Take a full pipeline approach to leadership potential: Anticipators extend the organization’s view of and search for high-potential all the way from senior through front-line leadership levels.
- Use advanced analytics approaches: HR Anticipators are more adept at using advanced people analytics techniques such as “what if”/scenario planning and data visualization/storytelling.
Of these practices, the ability to use advanced analytics is among the most important for HR. Our research showed that HR practitioners that are able to employ advanced analytics are 6.3 times more likely to be offered promotions, and are 3.6 times more likely to have a strong reputation with senior business leaders.
Learning Environments Built by HR Professionals with Stronger Business Reputations
HR’s reputation is also defined by the learning methods they put in place for the business leaders who are the customers of their talent programs. By giving leaders access to the types and ways of learning they prefer, HR can boost its status by being an advisor and accelerator of leadership growth.
In our research, we found a significant link between strengthened reputation with business leaders and HR’s heavier implementation of six learning methods:
- Coaching from one’s current manager – HR ensures that managers have the necessary skills to develop others by reinforcing and giving feedback on key leadership skills.
- Coaching from peers – HR sets up systems for social learning and curated knowledge that help leaders learn from others dealing with similar challenges to their own.
- Short-term developmental assignments – HR creates and connects learners to immersive, targeted, and relevant experiences to grow leaders’ skills.
- Personalized learning activities – HR makes both the content and the technology available to enable scalable, tailored learning – avoiding cohort-driven, one-size-fits all learning models.
- On-demand learning – HR maps learning programs to the times and places that work best for leaders, recognizing that with increased leader diversity in ages and backgrounds comes greater variability in learning preferences.
- Blended internally and externally-developed learning material – HR carefully selects the best learning content regardless of its source, combining material originating inside and outside the company to provide company relevance and draw on external expertise.
Although HR’s reputation with many business leaders is stuck in neutral (if not reversing), one in nine HR professionals have established themselves as Anticipators. These HR Anticipators have positioned themselves to directly influence business planning cycles and to implement solutions to the pressing talent challenges executives place at the top of their priority list. This level of impact and influence isn’t accidental; it’s actionable. As companies continue to feel the worsening effects of the “war for talent,” HR professionals who can build their reputations as anticipators will find themselves in high-demand.