Why HR Should Be On Every CEO’s Agenda

Why HR Should Be On Every CEO’s Agenda

This blog is based on the presentation by Deborah Kostroun and Mary Ruiz, COO and CEO of Manatee Glens, and Erik Marsh of DATIS at the 2014 Spring MHCA Conference. View the full presentation slide deck here.

There are some schools of thought that view HR as an aging department that is becoming increasingly outdated and ineffective. However, human capital experts agree that, quite contrarily, HR is now more important than ever. Recently, on a rainy Thursday in Nashville, CEOs from all over the country filed in to the last session on the last day of the Spring 2014 MHCA Conference to hear the case for a more strategic approach to HR.

The presentation cited McKinsley & Company’s recent human capital study, which found that a majority of CEOs have a “lukewarm” view of the HR department as well as studies by The Conference Board and Bersin by Deloitte, which urge CEOs to cultivate the HR transformation by placing human capital executives at the heart of strategy discussions. Why? Because it is imperative to achieve operational excellence.

What is the HR Transformation?

Many modern organizations continue to use old HR practices that are burdensome, complicated, and hierarchical. These departments spend the most time on functions that provide little organizational value, like paper based approvals. The HR transformation happens when organizations make the fundamental shift from HR to Human Capital Management. The most important difference between the two is that while traditional HR’s focus is primarily on information management, Human Capital Management acts as a strategic differentiator for an organization by adopting practices that aim to attract, develop, and retain top talent in the marketplace.

“We need to continuously skill our own teams to maintain relevance and value… In 2014 if you aren’t reinvesting in HR, you’ll likely fall behind.”

-Josh Bersin, Bersin by Deloitte

Unlike the process driven HR department, HCM is business driven in the sense that it can anticipate threats and opportunities, it aligns workforce and culture to organizational strategy, and it drives value and business performance. The MHCA presentation listed just a few of the many functions HCM provides that produce business results:

HCM Tactics for Business Results

  • Curate culture of agility, flexibility, and innovation
  • Develop forecasts and analysis
  • Promote business accountability with metrics
  • Propose staffing solutions to lower cost and promote innovation
  • Nurture new program and product launches

Is HR transformation on your organization’s agenda? It should be. Bersin by Deloitte’s Human Capital Trends research found that “HR itself is changing dramatically and we need to continuously skill our own teams to maintain relevance and value… In 2014 if you aren’t reinvesting in HR, you’ll likely fall behind.”

This DATIS Blog was written by MJ Craig, DATIS, on June 23, 2014 and may not be re-posted without permission

Written by MJ Craig