rising role of HR in strategic activities
Role of HR in Strategic Business

The recently released ‘Cranet 2014/15 report‘ reveals that Human Resource Information Systems (HRIS) and HR Department – keeper of the people function – now have become the most valuable strategic focal point in almost every company in the USA. 83% of the responding companies agreed that they are using a human resource information system (HRIS) or an electronic HRM system. The report, Human Resource Management Policies and Practices in the United States, was jointly produced by the Cranfield Network, the Society for Human Resource Management (SHRM) and the Center for International Human Resource Studies (CIHRS) at the Pennsylvania State University.

Key Findings of Cranet 2014/15 Report

2014-15 2009 2004
Internal Recruitment of HR Head 36% 24% 22%
Decreasing women workforce 61% 63% 72%
HR Dept. consulted during merger & acquisition 9% 4% 8%
Involvement of HR Dept. in business strategy 76% 78% 80%
HR in the role of board of directors 70% 63% 41%

 

  • Companies are increasingly making internal recruitment for their HR Head.
  • On average, women constitute around two-thirds of HR department members, but this proportion is declining.
  • There was negative response of respondents about the role of HR departments during merger, relocation or acquisition between 2004 and 2009; but in 2014/15 survey recorded positive response.
  • Involvement of HR departments in the development of business strategy is slightly declining but still it is quite significant.
  • Since 2004, the percentage of respondent has remained stable at 54-61% (depending on the type of organizational change). It is an indication that HR continues to be involved in processes vital to the success of organizations.
  • Most responding organizations (70 percent) said HR has a place on the board of directors. 63 percent who thought so in 2009 and 41 percent in 2004.
  • In 2014/15, the vast majority of organizations report using human resource information systems (HRIS) or electronic HRM systems (83%).

Author’s take

Due to its unique position in the organization, HR professionals easily get expertise in making effective communication with senior management. In addition, HRIS-powered HR people very well understand matrix of the company’s weakness and strong points. These two virtues make them natural choice for the strategic business partner of the company and are key factors behind rising role of HR in strategic activities.