Personnel remains largely a support function that is still finding it hard to establish a place in the boardroom.
For some years now the personnel profession has been seeking greater recognition in the boardroom. Some have argued that it is only a matter of time before the human resource director usurps the finance director at the right hand of the chief executive. Others believe such ambitions are unrealistic and unhelpful in determining the corporate role of personnel at the highest levels of a company.
New research carried out by PA Consulting suggests the waiting will continue for some time yet. Canvassing the views of chief executives, finance directors and human resource directors in 60 companies among the FTSE 500, it found widespread agreement that the personnel function was not yet strong enough to build the job into anything more than a support role.
The findings are backed up by other studies which have registered a decline in the number of HR directors at board level in the UK over the past decade. The PA research found there was confusion among senior directors about the perception of personnel and the role it should be playing.
When asked to indicate where personnel could add most value, the finance directors said they expected HR to be playing a more dynamic role in leading and implementing organisational change and developing new policies for recruiting or resourcing staff. Chief executives, on the other hand, retained a more traditional view of the role and HR directors themselves stressed the importance of their existing skills in managing performance and pay.
Jonathon Hogg, the consultant at PA who led the research, says the findings reinforce suggestions that the function has failed to position itself at the heart of corporate decision making. 'Over the last three years we have detected some unease among the HR community. We know that there are worries that HR is not putting sufficient value in to the business,' he says.
Does this mean that HR is to be viewed continually as something of a Cinderella profession? The evidence looks mixed. Statistics gathered by Cranfield Management School in a nine-year study points to a marked decline in HR representation on UK boards from 1990 to 1999. Gavin Adam, a partner at PricewaterhouseCoopers, debating the status of the function at the recent Human Resources Forum held on the cruise ship Oriana by Richmond Events, said the boardroom presence of HR had fallen by 20 per cent during the period of the study. 'As HR appears to have left the board, so the chief executive has taken a stronger role in people issues,' he says.
But Geoffrey Armstrong, director general of the Institute of Personnel and Development points to continuing strong demand for good HR people in strategic roles. 'In the last month I have had three separate headhunters approach me looking for candidates to fill jobs all priced at around Pounds 200,000 a year. They are describing these jobs as at the heart of the organisation. They are not saying they want functional technical specialists but someone to help them think ahead and to form a strategy in highly turbulent business circumstances,' he says.
Mr Armstrong is concerned that the profession should not get bogged down in a debate over which side of the boardroom door the personnel function should find itself. 'But I do see the person in the role as continually connected and as a strategic member of the team,' he says.
The strength and character of this connection, however, continues to be disputed. Peter Kirby, a partner at Kirby Simmonds International, a UK headhunter with a strong presence in human resources, does not believe that strategy is central to the job.
'Any chief executive who depends on the HR director for strategic input is frankly too weak. They pay chief executives to devise strategy and they pay HR people to put the right people in the right place at the right time,' says Mr Kirby. 'The classy HR people I have met will tell you that it's a function whose outstanding feature is its mediocrity. They recognise that the value they give to a company is to look at a strategy as it is handed down from the people paid to formulate it and say 'this is what we need',' he adds.
But Stephanie Monks, human resources director of Granada, says she welcomes the opportunity to influence the business agenda during board meetings. She stresses, however, that the role is also about delivering results. Any HR initiative, she says, must bring business benefits. 'We focus on early results to get brownie points, not elegant formulas,' she says.
Clive Morton, at Anglian Water Services, has shown how HR can be involved in strategic thinking - he has just moved job from HR director to director of business development where his prime role is to seek out new business opportunities for the company.
He is convinced of the need for close HR involvement in business strategy but he says he has some sympathies with those who believe the profession should not become embroiled in a debate over boardroom ambitions. 'If you focus simply on whether HR is on the board you are stressing the representational part of HR and not its contribution,' he says. 'We need to be focused on its operational and strategic role.'
The challenge for personnel experts, therefore, is to continue demonstrating the value they can add to the business. Whether this will be characterised as a power struggle with other functions for corporate status may, in the long run, matter more to human resource specialists themselves than the companies they serve.
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