It is no longer odd when HR managers are included in executive management team and manages strategic HR issues from a business perspective. It is stimulating and fun to have a dialogue with these managers since they see the importance of investing in leadership and their employer brand to strengthen their business, and that this is essential for the company’s ability to achieve its strategic business intents.
However, we often encounter companies where HR is not represented in the management team. HR goes through an “Administrative Director”, through the CFO or possibly reports directly to the CEO, but the role in the management team is still not given. To answer the question whether there is anything common among the companies where HR is not in the management team we plunged into our database to analyze the data we have accumulated over our many years in business. Here are some interesting findings:
Things that are clearly better in companies with HR executives are:
- Leadership: On a hundred point scale leadership is perceived as much as 17 points higher in companies where HR is in the management team compared to where they are not.
- Employees have greater knowledge of the company’s values (15 points higher on the hundred point scale), they can also identify with the values to a greater extent and find that the company as a whole is living their values.
- The clarity of the company’s overall goal is 13 points higher, and employees also have a better understanding of how their own goals support the overall company goals.
- The ability to implement changes is 11 points higher which ought to have a major impact on companies’ ability to succeed in all the change programs run in pursuit of higher profitability and competitiveness.
- The energy is higher in companies where HR is in the Management team, which of course has strong influence on employee engagement. There is a positive atmosphere and people have fun at work and contribute with new ideas and solutions to a greater extent.
Enough reasons to argue that HR probably has some impact on the quality of leadership and the importance assigned to HR issues that influence business performance, and thus have a given position in the management team. What do you think?