What is YOUR company's major HR challenge?

Photo via the Fountain Group, Flickr

Today, HR unfortunately suffers from critics who say the HR function in organizations lacks vision and strategic insight. According to Peter Cappelli, professor and director of the Center for Human Resources (University of Pennsylvania, Wharton School of Business), HR managers need to turn this perception around — and they can!

HR can quiet critics by stepping up to one of the key challenges facing HR today – the acquisition, management and training of talent.  Read on to hear from HR pros why this is a critical focus.


In his Harvard Business Review article, “Why We Love to Hate HR…and What HR Can Do About It,” Cappelli suggests it’s not unnatural for managers to resent HR:

“… We don’t like being told how to behave—and no other group in organizational life, not even finance, bosses us around as systematically as HR does.”

When companies and the economy are doing well, managers tend to think they don’t need HR, but when the economy is down and there are labor issues, they see HR as a valued leadership partner.

For instance, after World War II, U.S. industries suffered a massive talent shortage. At that time, HR was powerful, and executives voted it the most glamorous area in business. “Modern HR was born … in the 1950’s,” Cappelli writes, with now-routine practices such as coaching, developmental assignments, job rotation, 360-degree feedback, assessment centers, high-potential tracks, and succession plans.

line managers increasingly in Charge of Hiring

Unlike decades past, only about a third of today’s hires are internal. Businesses use external recruiting firms to fill many positions, especially at the senior level. Cappelli’s article says one in four CEOs come from the outside, and companies spend less time and effort planning for future talent needs. Tasks that HR traditionally performed such as hiring, employee development, and compensation have been pushed onto line managers.

A Society of Human Resource Managers (SHRM) report, “Key Priorities for the HR Profession Through 2015: Are You Ready?” finds that managing talent and improving leadership development are the most critical HR challenges that organizations face, particularly as the economy continues to grow. But more than six of ten HR professionals believe their organizations are of average performance in these areas. The report names other top challenges: delivering on recruiting and staffing, managing change, and cultural transformation.

Taking Back ownership of talent

HR can secure huge payoffs for their organizations, Cappelli writes, but only if HR leaders step up and drive change as the economy improves and before labor shortages arise. There are market shifts, “that we all see coming,” Cappelli writes, and HR professionals have the expertise to get ahead of them.

Show Value. Prove HR’s conflict-managenent proficiency. Calculate and report ROI as HR approaches layoffs, recruiting, flexible work arrangements, and performance management.

Update policies and methodologies. Develop policies specific to your company and industry. Continually examine the organizations’ internal and external environment and design solutions for new challenges as they emerge.

Stop doing what doesn’t work. Some HR practices such as inter-generational focus haven’t proved to be a wise use of resources (as Cappelli says, studies show young workers today are basically like those of yesterday). Refocus your resources in more effective areas.

Understand analytics. Cappelli cites a Deloitte study that says HR leaders are analytically unprepared despite the fact that more and more companies are incorporating analytics into recruitment, hiring, and people management.

Defining Human Capital More Broadly

In “5 Best Practices for Your 2015 Strategic HR Plan,” workplace technology strategist Jessica Miller-Merrell shares tactics for defining human capital more broadly.

Build an annual strategic HR plan. Use trends from previous years along with your company’s overall business plan to develop your roadmap for the coming year. Review the plan periodically throughout the year and adjust it as necessary.

Make your company attractive to potential talent. Remember that recruiters are candidates’ first impression of your company. Make them feel valued, desired and respected.

Keep compensation competitive. As the job market continues to improve, position your company so that salaries and benefits are competitive enough to attract new talent—and retain the employees you already—without busting the budget.

The Short Answer – engagement

In today’s fast-paced marketplace, businesses need to truly appreciate employees as their most important assets. That’s the simplest solution to today’s HR challenge!

Engaged, productive employees are central to a company’s success — and so is managing their professional development! HR is responsible for attracting the best and brightest to fill open positions and staff new initiatives. As Cappelli puts it:

“The time is ripe for reimagining human capital much more broadly. Business leaders will see that—if HR makes a compelling, evidence-based case for what matters, and jettisons what doesn’t.”

For more great tips and insights into building a vibrant culture of engagement and recognition, be sure to download our free e-book“The Top 20 Employee Engagement Blogs You Should be Reading.”

The Top 20 Employee Engagement Blogs You Should Be Reading
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