As innovation officially becomes a top business strategy, HR needs to think creatively and adapt its ways of working.
Cost management, talent management and boosting productivity remain top current priorities for HR and non-HR business leaders in 2015, unchanged from 2013. But for the first time, innovation is now a leading business priority for a third of both HR (35%) and other business leaders (32%), according to the latest CIPD/Workday HR Outlook leaders’ survey.
The findings highlight that new ways of working and operating is an increasing reality for organisations. However, while there is general agreement about overall strategic priorities, it seems to be less clear to the wider business how HR professionals will contribute to achieving them. Despite nearly three-quarters (72%) of HR leaders saying that their current people strategy will help the organisation achieve its future priorities, just a quarter (26%) of other business leaders agree. Also, although 31% of non-HR business leaders think HR should be focusing on diversity to help achieve innovation in the workplace, just 19% of HR leaders said they were. To address this, the CIPD recommends that HR needs to look at ways in which it can innovate itself in order to stay relevant and more visibly demonstrate its enabling role as the workplace evolves.
Dr. Jill Miller, Research Adviser at the CIPD, the professional body for HR and people development, comments: “Cost management is once again a top priority in this year’s survey, but it’s great to see innovation featuring so strongly, suggesting many organisations are thinking creatively in an environment of ongoing cost control. At a strategic level, HR and non-HR leaders are evidently aligned on goals, but our survey highlights clear areas of opportunity for better collaboration and communication between HR and other functions.
“With people being at the heart of how businesses operate, HR has a significant role to play in wider organisational innovation. This requires business-wide systemic thinking and action to affect change but the good news is that we can see from the report that the appetite from non-HR business leaders for HR to drive this change is there. HR leaders need to focus on growing technological and analytical capabilities within the function, so it has the ability to meet future business requirements and really flourish in the evolving world of work.”
The report also found differing views on the use of HR analytics, particularly due to a lack of awareness of the current and potential value outside of the HR function. For example, when non-HR leaders were asked to describe the analytic capability in their HR department, almost 3 in 10 (28%) said they didn’t know. Moreover, 28% said their HR department doesn’t share their analytics with key stakeholders, compared to 12% of HR leaders who thought this. This might explain why just 14% of non-HR leaders are satisfied with the HR analytics provided to them and also why, despite over three-quarters (78%) of HR leaders saying analytics are important to HR’s ability to deliver strategic value to their organisation, less than half (49%) of non-HR business leaders agree.
Miller continues: “If the HR function is to truly demonstrate its value-adding qualities within the business, HR analytics are a key way in which they can move conversations from ‘I think’ to ‘I know’, and have access to data to form persuasive evidence-based arguments for people management decisions. However, our research suggests that HR professionals need to better illustrate the insights they have at their disposal to key stakeholders outside of the function, in order to show the value that they can bring to wider business objectives. What gets measured gets managed, but only if that analytical data is interpreted and the rest of the business is engaged with the results.”
The research also asked leaders about technology-related concerns, and found that outdated/inflexible HR systems was the top issue for HR leaders, which over two-fifths (41%) flagged as a problem they were currently focusing on. However, it was not on the list of top five issues for non-HR leaders, replaced instead by concerns about cyber security and reputation.
Karen Minicozzi, Vice President of HCM Product Strategy at Workday EMEA, comments: “It is great to see the appetite for HR analytics continue to increase, as it reinforces the need for innovation to help HR leaders drive better decision making across their organisations and raise their strategic contribution to achieve broader business goals.
“While HR leaders recognise the need to replace legacy systems, the research shows they must continue to help the wider business understand the need to change these outdated systems with those built to deliver the real-time analytics required to achieve HR transformation and move the business forward.”
Top five current priorities for HR leaders:
- Cost Management (63%)
- Talent Management (50%)
- Increasing agility/flexibility of organisations (49%)
- Innovation (35%)
- Productivity (33%)
Top five current priorities for business leaders:
- Cost Management (61%)
- Increasing customer focus (39%)
- Productivity (32%)
- Innovation (32%)
- Talent Management (28%)
Top five future priorities for HR leaders:
- Cost Management (54%)
- Talent Management (48%)
- Innovation (38%)
- Productivity (36%)
- Increasing agility/flexibility of the organisation (36%)
Top five future priorities for business leaders:
- Cost Management (55%)
- Productivity (34%)
- Innovation (32%)
- Increasing agility/flexibility of the organisation (27%)
- Talent Management (26%)