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Published February 2010

HR Confidence on the Rise

  Robert Levy

After two years of recession, human resources leaders believe their work during the recession has heightened their value in the eyes of executive leadership, and they are looking toward increasing their impact this year.

Those are two of the key findings of a recent survey, "State of the Union in HR: Looking Ahead to 2010,"  co-sponsored by HRToolbench and Arbita, which sought to answer these questions: Following one of the most challenging years for business in recent memory, what does 2010 hold for HR? Can HR expect more of the same? Or is there cause for optimism?

Valued Business Partners
Based on answers from 400 survey respondents across multiple levels of HR and companies of varying sizes, the general consensus is that cause exists for optimism. After cuts in jobs, benefits and wages during the past two years, HR professionals across the board are anticipating brighter days ahead.
 
The best news may be that many believe performance during the recession has earned HR respect as a business partner. Many businesses turned to HR during the recession to help make often difficult decisions about job cuts. It appears this reliance has enhanced HR's value in the eyes of executives and front-line managers.

But while many survey respondents believe stature has improved during the economic downturn, they also acknowledge they continue to face an uphill battle in dealing with the fallout of the recession during the slow turnaround. Many HR practitioners are seeking ways to contribute directly to organization success, reflected in the finding that performance management will be the most significant focus in 2010; 74 percent of respondents said they are highly likely or likely to be engaged in helping managers define and communicate performance expectations to employees.

A rebound in the job market could, however, add a degree of difficulty to HR's job, as well as contribute to HR's heightened respect from senior executives. Once employees sense they have more employment options, retaining key personnel will become a critical HR issue.

During the downturn, as job markets tightened and layoffs became more widespread, many employees were simply looking to keep their jobs. As hiring rebounds in 2010, a key focus for HR will be on the tools to improve retention of top talent: implementing career paths, defining the organization's talent needs and skill levels, adjusting salary ranges to assure competitive pay practices and focusing on training.

A Rebuilding Year
Other survey highlights include:

• Forty-eight percent of all respondents believe HR's role in their organizations will be stronger after the recession. The same number believe front-line managers have come to rely more on HR than before, and more than a third of respondents believe the current recession has led senior executives to view HR as a more important business partner.
• More than half of the respondents are highly likely or likely to conduct competitive salary market research and adjust ranges to assure competitive pay practices.
• Sixty-one percent of respondents are highly likely or likely to be focused on enhancing their internal employee communications to help build employee commitment and understanding.
• Two-thirds of respondents said reducing the cost of employee benefits will be a top priority in 2010.
• Performance management will be a significant focus in 2010 and workforce retention and development will gain in priority in 2010.
• HR professionals in general are anticipating a rebuilding year for training in 2010.

HR's Priorities for 2010
How will HR professionals leverage their increased value to their organizations in 2010? The survey results reflect a belief that as the recovery takes hold and people management issues become more critical, workforce performance and productivity will continue to be strategic imperatives, whether businesses are fighting for survival or looking to take advantage of improved business conditions.

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