February 11, 2016

Innovation number one priority for HR and non-HR business leaders

For the first time ever, innovation is the number one business priority for HR and non-HR business leaders taking part in the CIPD/Workday HR Outlook leaders’ survey.

Over a third (35%) of HR and just under a third (32%) of other business leaders polled say innovation is their leading business strategy. Why has innovation grown in importance? Because employers recognise the need to think creatively on an organisational and individual level, and to adapt to an agile way of working.

The need for innovative HR is by no means a new strategic concern. It has become an increasingly prominent business issue in recent years. For example, a 2013 KPMG report, ‘HR as a driver for organizational innovation’, showed that innovation was one of the top three global challenges facing business leaders. And where did the KPMG expect that innovation to come from? Not R&D, not technology, but from successful, targeted people and human capital management strategies. This is, of course, HR’s domain.

Differences between how HR and other business leaders intend to achieve this innovation emerged in the recent CIPD survey findings. Nearly three-quarters (72%) of HR leaders said that their existing people strategy will help their organisation achieve its future priorities. However, only 26% of other business leaders agreed.

One area that is specifically known for driving innovation – diversity – showed further differences: 31% of non-HR business leaders think HR should focus on diversity in order to improve innovative thinking. Only 19% of HR leaders said they were doing this.

The CIPD made some recommendations on the back of these findings. Firstly, it recommends that HR professionals find ways to innovate within their own function, in order to remain relevant. It also urged HR to make itself more visible and demonstrate the very important role it has to play in enabling workplace evolution.

In particular, the CIPD highlighted the need for HR to improve its visibility in terms of HR analytics. The survey found that 28% of non-HR leaders did not know if their HR department had any analytics capability, with the same number saying that HR does not share its analytics data with key stakeholders. Did HR leaders agree? Some HR leaders – 12% – admitted that there was insufficient clarity around their own people analytics and agreed that the function was not sharing data.

Other key strategic priorities highlighted by HR and non-HR leaders in the research were cost management, talent management and boosting productivity.

Dr Jill Miller, CIPD research adviser, commented on the report. She said that although HR and non-HR business leaders are aligned with regards to strategic goals, better communication and collaboration is needed if those goals are to be achieved.

“Our research suggests that HR professionals need to better illustrate the insights they have at their disposal to key stakeholders outside of the function, to show the value that they can bring to wider business objectives,” she says. “What gets measured gets managed, but only if that analytical data is interpreted and the rest of the business is engaged with the results.”