Is doing more with less starting to wane in organisations? Recent figures from the Bank of England showed that productivity levels have fallen by 0.5%, lower than countries such as Spain and Italy who are still struggling with significant economic challenges and waves of public protest about austerity and unemployment.
For UK managers in the workplace, 76% say the economic climate remains their biggest challenge according to our Management Agenda survey. There’s no doubt that managers are between a rock and a hard place – motivating their teams to achieve their goals while at the same time pairing back the resources with which they have to do it. And then of course, there’s the HR function, which historically has been seen as out of touch with operational reality. In our survey, priorities for HR professionals continue to be change management, managing workloads, staff morale, reduced revenues and budgets. But are these priorities what managers need?
Is HR seen to be adding value to the business?
In traditional style, let’s look at the good news first. This year we see an overall improvement from the last year in the proportion of managers reporting that HR is adding value to the business. These improvements related to HR being credible, proactive, strategic, influential and customer-focused.
If you look under the surface, two things stand out. Where managers see HR adding most value remains in operational and transactional areas such as managing the process of redundancies or the interpretation of employment law. Where managers want HR to add more value is in more strategic areas, like organisation-wide development, workforce planning and retention.
Managers are sending a very clear message: not only is it crucial for operational HR activities to be undertaken effectively, but there is a need for more strategic expertise, which is seen as having higher potential for added value by managers in the business.
What does being more strategic actually mean?
We asked this question in our research and found that the specific factors that have a strong positive relationship with strategic performance are all on ‘the people agenda’. These include:
- Effectiveness of leadership
- Strength of collective sense of purpose
- Effectiveness of change management
- Effectiveness of talent management
- Quality of performance management
- Competence of line managers
- Credibility of HR
- Levels of well-being at work
- Employee engagement and happiness.
This is more good news for any HR team.
Conversely, there are some pitfalls for HR to avoid. Not surprisingly, the factors found to have a strong negative relationship with strategic performance include:
- Lack of role clarity
- Lack of control over work
- Problematic policies and procedures
- Poor communication
- Lack of support
- Poor employee relations
- Competing agendas at senior levels
- Poor management of promotions
- Unequal terms and conditions
- Competition for resources
In times where businesses succeed or fail, an organisation’s strategic performance depends so much on the human factors. If we want to enhance the value we bring to the business we should pay closer attention to these factors.
How would you score against these in your organisation, and what could HR be doing to make a difference?