Finance, IT, Procurement, and other business services areas are
in the midst of a growing talent crisis, and the failure of HR and
business services leaders to effectively collaborate is in large
part to blame, according to new research from The Hackett Group,
Inc. (NASDAQ: HCKT).
According to The Hackett Group's latest HR Book of Numbers™
research volume "Cracks in the Foundation: Closing the Critical
Skills Gap Undermining Business Capabilities," business services
organizations -- including finance, IT, procurement, and even HR
itself -- are seeing dangerous deficits in talent and skills, and
are highly dissatisfied with the level of support they receive from
HR on talent issues.
In large part, this dissatisfaction is being driven by the
extremely low levels of service that HR is providing, and lack of
effective communication and collaboration between business services
leaders and HR. The research found that business services
organizations say they're getting talent management support from HR
less than 35 percent of the time on average. In addition, the
percentage of companies saying HR is providing a full range of
services is 13 percent or less. The study looked at six key areas
of talent management: workforce planning and succession;
collaboration/knowledge sharing; retention; managing performance;
learning and development; and recruiting and staffing.
The Hackett Group study outlines how both sides can work
together to improve the situation, and address growing talent
management issues being driven by increased business volatility,
globalization, and insufficient investment in talent.
"At most companies, business services functions were badly
weakened by across-the-board cuts during the recent recession,"
said The Hackett Group Global HR Practice Leader Harry Osle.
"Underinvestment in talent has created deficits in important skills
such as business acumen, strategic thinking and analysis, change
management, and process improvement capabilities. Yet companies
seem to be almost completely ineffective at addressing this talent
challenge, in large part because HR and business services leaders
are not collaborating. This is a dangerous situation with the
potential to cripple companies that don't address it quickly. While
these business services functions are often considered
cost-centers, they provide key services that enable companies to
manage and optimize assets ranging from cash, capital and talent to
technology and product/service inputs."
Almost across the board, the study found that business services
organizations are highly dissatisfied with the level of support
they receive from HR on talent management issues. Companies in The
Hackett Group's study said they were either dissatisfied or very
dissatisfied with HR support for business services nearly 70
percent of the time on average. Companies were most unhappy with HR
support for collaboration and knowledge sharing (79 percent
dissatisfied/very dissatisfied) and retention (70 percent
dissatisfied/very dissatisfied).
In large part this dissatisfaction is being driven by the low
levels of service HR is providing to business services. The
research found that business services organizations say they're
getting talent management support from HR in these areas less than
35 percent of the time on average. The percentage of companies
saying HR is providing a full range of services is 13 percent or
less.
In some of the worst areas, such as retention and
collaboration/knowledge-sharing, 18 percent or fewer of companies
in the study said their HR organizations are providing adequate
levels of services or expertise. In other areas, including
workforce planning, performance management, and learning and
development, only 33 to 47 percent of all companies said adequate
levels of services are provided.
The study found that even in the top-performing area, recruiting
and staffing, over 40 percent of all companies say only limited
services and expertise are being provided by HR. And in all areas,
the number of companies that say HR provides a full range of
services and expertise in these areas ranges from only 13 percent,
for recruiting and staffing, to 7 percent for performance
management, to 5 percent or less for all other areas.
The Hackett Group study said that one key explanation for HR's
inability to effectively support talent management needs of
business services is that HR has had a hard time adapting to its
changing mission of enabling business performance. At many
companies, HR budget and staff cuts made during the recent
recession remain in effect, impacting on talent management
programs, along with training, career development, and retention
programs. Finally, few HR organizations have a dedicated business
partner role responsible for communicating and understanding the
talent management needs of business services functions like
finance, IT and others.
According to The Hackett Group Chief Research Officer Michel
Janssen, "Today's changing business environment requires that
business services organizations retool and radically change their
mix of staff to improve their ability to directly impact on
business performance. Talent management is key, and business
services can't accomplish this without strong and effective support
from HR. Both parties must redouble their efforts to improve their
working relationship. Business services managers must take the lead
in specifying their needs, and taking accountability for results
for talent management. HR must provide comprehensive process and
administrative support, methods and tools, training and guidance to
function leaders."
The Hackett Group's research offered guidance for HR and
business services in each of six key talent management areas. For
example, while recruiting is generally an area where HR provides
the strongest support to business services, it is also the least
effective talent management category employed by business services.
According to the study, business services must do a better job of
defining and prioritizing the skills and characteristics that are
truly essential for job candidates to have. HR can also rely less
heavily on external labor markets, and develop staff, as well as
examine alternative approaches to recruiting, such as hiring
less-experienced staff with development potential and
permission-based recruiting. Candidate relationship management is
also a powerful emerging strategy for handling company interactions
with applicants, candidates and current employees.
About The Hackett Group
The Hackett Group (NASDAQ: HCKT), a global strategic business
advisory and operations improvement consulting firm, is a leader in
best practice advisory, business benchmarking, and transformation
consulting services including strategy and operations, working
capital management, and globalization advice.
Utilizing best practices and implementation insights from more
than 7,500 benchmarking studies, executives use The Hackett Group's
empirically-based approach to quickly define and implement
initiatives that enable world-class performance. Through its REL
group, The Hackett Group offers working capital solutions focused
on delivering significant cash flow improvements. Through its
Archstone Consulting group, The Hackett Group offers Strategy &
Operations consulting services in the Consumer and Industrial
Products, Pharmaceutical, Manufacturing, and Financial Services
industry sectors. Through its Hackett Technology Solutions group,
The Hackett Group offers business application consulting services
that help maximize returns on IT investments. The Hackett Group has
completed benchmark studies with over 2,800 major corporations and
government agencies, including 97% of the Dow Jones Industrials,
86% of the Fortune 100, 90% of the DAX 30 and 48% of the FTSE
100.
More information on The Hackett Group is available: by phone at
(770) 225-7300; by e-mail at info@thehackettgroup.com.
Book of Numbers is a trademark of The Hackett Group.
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