Deloitte’s Report Is Clear: Business Leaders Don’t Think HR is Up to Snuff

Deloitte’s annual Global Human Capital Trends Report for 2014 is out.

Influenced by the work of Bersin by Deloitte, it examines 12 trends that represent the way employees today are driving their organizations to innovate and transform human capital practices.

The report, Global Human Capital Trends 2014: Engaging the 21st Century Worker, surveyed 2,532 business and HR leaders in 94 countries around the world over several months, also drawing upon past research on global business challenges in HR, leadership, and talent management.

The result of the report is a wealth of data on human capital strategies in the 21st century workplace that can be examined for perspective and insight into our own organizations and strategies.

A need to “re-skill” HR teams

The year’s 12 critical human capital trends were categorized into three broad categories. “Transform and Reinvent” examines the need to re-skill HR teams, capitalize on cloud based HR tech, implement HR analytics as a means to achieving business goals, and create a global HR platform that is robust and flexible enough to adapt to local needs.

So, re-skilling HR teams. Really? Why is this a critical trend?

According to the report, less than 8 percent of HR leaders have confidence that their teams have the skills needed to meet the challenge of today’s global environment, and consistently deliver innovative programs that drive business impact.

Business leaders unfortunately corroborate this statistic, with 42 percent believing that their HR teams are “underperforming” or “just getting by.” This is compared to the 27 percent of business professionals who rate HR as excellent or good when assessing HR and talent programs.

At a time when CEO’s are reporting human capital strategies as one of the top priorities for growth, it’s important that HR departments have the skills necessary to acquire, develop, and retain top talent as well as engage employees at all levels. And with a workforce that is increasingly global, tech-savvy, highly connected and demanding, HR departments face the challenge of doing all of this with increasingly creative strategies that meet the needs of this 21st century workforce.

A gap in business and HR perceptions

While such skills are highly necessary, the statistics indicate that HR departments are not as equipped with them as organizations would like.

Of further interest, Deloitte’s report discusses how many organizations are reporting seeing a “disruption” of the Chief Human Resource Officer (CHRO) role in their organizations. This disruption consists of a refocusing HR as a “business contribution” function with deeper skills in data/analytics as well as MBA-level business capabilities.

When it comes to organizations’ readiness to respond to the 12 global human capital trends, there is a discrepancy between business professionals’ and HR professionals’ perceptions.

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For the five most urgent trends identified (leadership, re-skilling HR, global HR and talent management, retention and engagement, and talent and HR analytics) business executives report that their companies are less ready to address these issues than HR leaders report. For the issue of re-skilling HR, 48 percent of business respondents reported that HR is “not ready,” compared to 36 percent of HR respondents.

Deloitte’s report links this perceived lack of HR skills to some basic attributes, such as the fact that many organizations do not invest in developing the business skills of their HR teams and to the fact that more than 70 percent of all HR professionals enter the field without a specific degree or certification in business or human resources.

The data clearly shows what needs to be fixed

Of respondents surveyed from Deloitte’s report, 43 percent stated that their companies are “weak” when it comes to providing HR with appropriate training and experiences.

While disappointing, data like this is great because it clearly identifies perceived areas of weakness, and allows organizations to challenge their own programs and strategies for HR, as well as drawing conclusions more specific to their organization and strategies for transforming, reinventing, and re-skilling the HR team.

The bad news? Business leaders think that HR isn’t up to the people challenges of the 21st century.

The good news? Now we know, and can get to work!deloitte-human-capital-trends-2014

This originally appeared on China Gorman’s blog at ChinaGorman.com.

China Gorman is a successful global business executive in the competitive Human Capital Management (HCM) sector. She is a sought-after consultant, speaker and writer bringing the CEO perspective to the challenges of building cultures of humanity for top performance and innovation, and strengthening the business impact of Human Resources.

Well known for her tenure as CEO of the Great Place to Work Institute, COO and interim CEO of the Society for Human Resource Management (SHRM), and President of Lee Hecht Harrison, China works with HCM organizations all over the world to enhance their brands and their go-to-market strategies. Additionally, she serves on the Executive Committee of the Board of Jobs for America’s Graduates as well as the Advisory Boards of Elevated Careers, the Workforce Institute at Kronos, and WorldBlu. Addtionally, she chairs the Globoforce WorkHuman Advisory Board and the Universum North America Board. China is the author of the popular blog Data Point Tuesday, and is published and frequently quoted in media properties like Fortune, TLNT, Huffington Post, Inc., Fast Company, U.S. News & World Report and many others.

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6 Comments on “Deloitte’s Report Is Clear: Business Leaders Don’t Think HR is Up to Snuff

  1. While this report is but one more confirmation of my belief that most HR executives don’t have clarity surrounding purpose and goals, it’s also an indictment of the major HR Associations (read SHRM) for keeping their collective head in the sand. This state of HR affairs didn’t just happen overnight; its been percolating for a long, long time. How many times have you heard the phrase “.. avoid HR at all costs . . ” when trying to get something done. It also speaks to the relevancy of HR certification programs, which have consistently failed to deliver content which helps its alumni prepare for the future.

    Never in my 30+ years leading HR organizations have I experienced the extraordinary opportunity for HR to assume functional leadership that can result in tangible, meaningful and powerful results as exists now. Right now! Today! Sadly, I fear that few will be able to see that opportunity, and even fewer will take the risk to grab it with both hands and make a real contribution. Most will be playing catch up and find themselves reacting to changes that could have been proactively addressed much earlier.

    I wish I had a silver bullet that would alter this situation. I don’t see any fix on the horizon through the traditional means, such as SHRM and other HR focused organizations. Even if they figured it out today, it will take them years to do anything about it. And the speed with which the fundamental business changes are occurring ensure that most will remain far behind the power curve.

    I know (hope?) that there are HR executives out there that understand what I’m referring to; that ‘get it’. Perhaps they could find a way to find each other, and collaboratively help their functional counterparts get with the program. Regardless, the risk of not becoming enlightened is the HR function becoming increasingly irrelevant. And that would be a true tragedy.

  2. I don’t love HR, but this report is awful.

    1. This report confirms opinion, not facts.

    2. I’d like to see a report that compares “feelings” against actual busienss performance data. If HR is doing so poorly, why has the S&P more than doubled in the past eight years? If HR is failing companies on the war for talent, why has the stock market done better in the past 6 years than in the 80s? HR has nothing to do with all of this corporate largess, eh?! Do CEOs and CFOs deserve all the credit? Have companies been successful during a recession and recovery in spite of HR? I don’t buy it.

    3. Mortage crisis. Ethical issues. Credit deritvates. Executive comp scandals. Someone really ought to commission research on what HR really thinks of business leaders. I wish HR would measure its leadership on readiness, too.

    One more thing: Deloitte makes money when HR fails. I’m not a conspiracy theorist, but I’m not stupid.

  3. HR can only be as good as the top leaders allow them to be. Business professionals want HR to be ready, but do not allow the HR team to develop. “43 percent stated that their companies are “weak” when it comes to providing HR with appropriate training and experiences.” Yet, HR is supposed to be innovative and transform human capital practices. Sure.

  4. Business leaders detest HR because too many HR “professionals” thoughtlessly recycle the same old “best practices” they’re used to using, or worse, they trace their programs from the templates of peer organizations. Employees fear HR because HR is often terrible about marketing itself. Read the work of David Ulrich to learn how to transform HR into a high value integral business function.

  5. Interesting piece for what it is, taken at face value. But seems a bit of a regurgitation of Ulrich’s work without the balanced context. Looking at the author’s point of view from more than a flat perspective there are issues governing the business client as well. If the business leaders demand this type of performance from HR then they need to invest in the HR talent.

  6. Yet annother report from a major consulting company. Let me offer some alternative advice to my fellow HR-practitioners.

    1. Don´t ask business leaders what they need from HR.
    Business leaders are not experts on HR, if they were they wouldn´t have hired HR people in the first place. Businees leaders are experts on business challenges, HR are experts on which of these challenges could best be adressed with support from HR and how. Ask for pains, analyse them, propose a solution, and then let the business leader decide. No doctor would ever let a patient dictate a treatment without having made a thorough examination of symptoms, and neither should HR. Be the expert.

    2. Don´t let consultants tell you what trends you should pay attention to.
    Granted, there are some general trends worth paying attention to, but you
    should always examine them in the context of your company and it´s competitive
    environment. You want to be a ”strategic business partner” to your specific
    company, not to the average of a random group of companies from all kinds of
    businesses. Think independently.

    3. Don´t run with the pack.
    Doing what every other HR-function is doing, however excellent, will not make
    you a strategic business partner.
    Strategy is about differetiation, about doing different things or doing the same things in different ways, with the purpose of creating competitive advantage for your company. If you´re doing the same things as your peers in other companies, you should not feel reassured, you should be alarmed. You are paid first to help your employer to beat other companies in the market place, peer recognition is all fine but it should be a consequence not a goal. Go your own way.

    HR doesn´t need annother report telling them what they should be doing, they don´t need completely new skills or competencies, what they do need is a little self-confidence. The way I see it.

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