Stuck between an old world that needs measurement to prove value and this new world, directors need to prove their worth and the mettle. Measures in total compensation, total turnover, cost per hire, percentage of employees having performance appraisals, and job satisfaction are necessary, but from sufficient. They will need to be able to measure the non-financial statistics that financial analysts have long used to determine the best investments.

Mettle has held a series of Executive Breakfast Sessions on “Is HR Heading Towards Extinction?” The discussions with HR Directors from some of Australia’s leading companies have resulted in a paper entitled Human Resources - The Organisations Corporate Strategists. An extract is this paper is below. HR. departments can no longer be simply transactional back-office overheads providing payroll, OH&S compliance and exit interviews. HR directors now need to be the critical strategists sitting to the CEO’s right.

HR. departments can no longer be simply transactional back-office overheads providing payroll, OH&S compliance and exit interviews. HR directors now need to be the critical strategists sitting to the CEO’s right.

It means HR directors have a lot of work to do, to prove their worth and their mettle. Measures in total compensation, total turnover, cost per hire, percentage of employees having performance appraisals, and job satisfaction are necessary, but far from sufficient. They will need to be able to measure the non-financial statistics that financial analysts have long used to determine the best investments.

Dave Ulrich speaks of the several critical steps in any people director’s work, one of which is being part of the critical team that will define the firm’s strategy alongside the marketing director, the innovation director, the CFO, the CIO and the CEO and so forth.

The competencies of the people/HR directors of tomorrow will reflect a very strategic background, including knowledge of business such as financials, strategic, technological, organisational capabilities, understanding customers and competitors, and importantly, measurement by business results. In addition, the ability to manage change such as diagnosing problems, building relationships with clients, articulating a vision, setting a leadership agenda, solving strategy challenges and implementing directional goals... to name a few. These and other critical strategic level HR competencies will pay off.

The debate is over. HR matters and people matter. It is now time that the HR Practitioners shift gear and transition to the role of Chief Strategist Officer. A transition vehicle HR can use to shift from transactional to strategic is the current issue of Human Capital Management and HCM reporting.