What CEOs Need from HR

In preparing for the new year, chief executives and their HR leaders need to ensure they are on the same page. HR leadership is now – or should be – a prominent seat at the chief officer table, especially to help guide a company successfully through this recessionary economy. This week, I’ll be discussing what CEOs need from HR and how HR leaders can better fulfill those expectations. Join the conversation in comments.

To start the conversation, what do you think of Russell Reynolds Associates recent report on what CEOs want from HR: The Long View, How and Why CEOs Are Changing HR at the Top.

The research discusses why CEO expectations are changing and what they are doing to help HR meet them. The report cites two major factors driving HR to a seat at the table: demographic shifts and the importance of quality workers at the strategic and tactical levels. Of course, the economy adds a third critical factor with the governance, motivation and other issues that come with the downturn.

“Chief executives now are looking to their HR leaders to fully incorporate the strategic, financial and operational goals of the company in their endeavors, and to create and implement a strategic human capital plan ensuring that compensation, professional development, recruitment and retention are fully aligned with the company’s strategic objectives and goals. … In tandem with that broader business mindset, CEOs also are expecting their HR leaders to be more assertive. … Of course, these new demands are in addition to, rather than replacements for, the traditional skills and capabilities that have long been expected of HR executives, including expertise in executive and staff development, organizational design, recruiting, retention, compensation and benefits.”

Does this resonate in your organization? What about this statement from the research?

“CEOs recognize it is not merely a question of asking their HR leaders to rise to the challenge of new capabilities and responsibilities. If they want HR to deliver at a higher level, they have to create the environment that allows that to happen.”

Liz Ryan at BusinessWeek wrote an article on 6 Signs You Don’t Care about Workers with these as the top two:

1. The talent chief is a half-chief. - If the human resources leader in the organization isn't at the same level as the rest of the E-staff—whether that's executive vice-president, senior vice-president, or chief [whatever] officer - the "greatest asset" language is a lie. Why would a company that values talent demote its top people officer relative to the rest of its leadership staff? Talk is cheap. If your company values talent, it will bring on an HR exec with the experience and wherewithal to operate at the same level as the rest of the leadership roster.

2. HR is a finance function. - Years ago, when HR was called personnel, maybe it made sense to stick the function under accounting. After all, most of what happened in personnel had to do with payroll records, vacation days, and the like. Today, managing HR as a finance function says "We value people, all right. Those salaries and benefits suck cost right outta the bottom line." If your HR function is a sub-group of finance or of your general counsel's office, you've got some squaring up to do between your "greatest asset" talk and the way things actually run.

If you’re serious about driving the highest level of productivity out of individual employees to create a culture of high performance across the organization, then HR must be at the level of chief officer with their advice on employee needs, including recognition and motivation, appreciated, listened to, and acted upon.

What is the situation in your company? Is HR at the executive table, or still stuck at the kids’ table? Join the conversation in comments.