Pan-European research has revealed the role of HR is changing and personnel need to develop business skills to meet their new challenges.

Results from a survey conducted by Mercer reveal that although HR is strong in its traditional function skills and associated behaviours, there is a growing set of skills that are seen as required but have not yet been acquired.

These include:

• The ability to improve customer service


• Process and manage projects


• Deploy technology


• Business and financial understanding.

The research, conducted among over 300 senior HR executives in 25 countries, reveals that 70 per cent of organisations have or are planning to transform their HR function. And survey participants believe there has been a big shift in the perception that business has of HR.

Well over half the surveyed organisations view human capital as a source of value – not a driver of cost – and more than two-thirds say that business leaders view HR as making a full contribution to business performance.

HR is now actively engaged with the board of directors on a wide range of issues well beyond remuneration, with primary focus on leadership succession and development, workforce planning and organisational change. Sixty-two percent of HR directors now report to the CEO, a significantly increased figure since 2003.

“HR is now much more clearly seen as a partner to business leadership than inferred in the results of the HR transformation survey we conducted in 2003,” said Philip Vernon, principal for Mercer’s HR effectiveness business in Europe.

“Many organisations have made enormous progress in the area of HR transformation and now have a function that truly leads and supports the business, backed up by a tremendous degree of specialism.”

But he added that HR’s weak skills in the areas needed to be an effective business partner were a cause for concern.

“Europe’s HR executives tend to agree that HR is exhibiting broader business and operational-management skills, but there’s still a very strong emphasis on HR’s traditional expertise, with its focus on recruitment, team and people skills,” Mr Vernon explained. “A greater integration between those skills and a wider business and operational command is essential for HR’s strategic future.”

The survey clearly suggests that progress is being made, but that HR is concerned about both the capability and the attitudes of line management in its approach to people management and to executing the organisation’s HR policies and processes. The function still has a significant challenge in working with operational managers to ensure an organisation’s people management is improved in a way that really impacts business performance.