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How HR leadership can drive business performance 

By Sabine Vollmer 
June 12 2012

Many companies understand that to keep up with fast-changing global business trends, they need to do more than maximise operational efficiency.

In a recent study by PwC and HfS Research on how shifting business priorities affect operations, reducing costs lost importance, while gaining access to talent and driving cultural change nearly doubled in importance.

The report, which includes data collected from more than 400 human resources practitioners and more than 350 global business executives, says that global expansion and changing workforce characteristics have elevated the importance of recruiting, talent management and performance management in the workplace.

And it suggests that HR leaders can better help executives connect corporate strategy to human capital strategies. The majority of respondents felt HR departments need to serve in a leadership role to manage skill and talent shortages.

“Firms continue to be pressured by the combination of shifting global economics and changing talent requirements – and while HR executives have made efforts to centralise, globalise, cut costs and embrace new technology, many organisations fall short of what’s considered a true HR transformation,” Diane Youden, a principal at PwC, said in a statement.

Companies that have successfully transformed their workforces have eight traits in common, according to HfS Research and PwC. Those companies:

  • Employ talent-management strategies that align with corporate strategies.

  • Undergo human resource transformation during times of significant organisational, economic or functional change, such as a business restructure, a change in HR technology or a merger.

  • Off-load tactical work into shared services centres and let their best human resource managers focus on getting to know the business and the leadership better.

  • Make strategic human resources capabilities an important part of senior leadership agendas.

  • Develop and upgrade the analytical skills of human resource managers.

  • Deploy metrics that help human resource managers focus on business outcomes rather than HR results.

  • Do not prioritise process and systems standardization over business outcomes.

  • Leverage trusted consulting partners for large project management and transformation discipline.

Sabine Vollmer (svollmer@aicpa.org) is a CGMA Magazine senior editor.

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