The relationship between human resources and the chief executive officer is a reciprocal one that manages the human capital required for a company to reach its goals. HR planning and strategic decision-making should be conducted with input from both parties, as no business can function without staff, and staff need business to function.
Two-way communication is essential to a successful relationship. In a study conducted by the Economist Intelligence Unit, and sponsored by IBM and OracleOne, a common criticism of human resources leaders was a lack of knowledge in the business of the organization. Inaccurate data, or withheld information, can lead to blind decision-making. If HR fails to apprise the CEO of current expenditures or impending legal costs, financial disaster could loom. Similarly, if the CEO fails to plan the implementation of a new technology in conjunction with human resources managers, lack of preparation for staff training may cause the new process to fail.
The article “Delivering Results Through Talent: The HR Challenge in a Volatile World” on the PwC website contends that a shortage of talent is causing CEOs to recruit more from within and to invest in capital they already have. Job analysis conducted by HR is crucial to determining what skills and experience the company has and will need. The CEO provides an overall vision, and HR can make it happen from the human capital perspective. Whether a plan is actionable and what its potential capital costs are questions that require accurate data and honest feedback between HR and the CEO to help avoid unnecessary recruitment expense or staff layoffs.
The human resources department has a responsibility to maintain efficiency in record-keeping and technology. HR acts as a communication bridge between the CEO and staff, providing the CEO with the data and tools she needs to be informed quickly and accurately. The CEO depends on the HR manager to act as adviser, providing the necessary data to guide strategies regarding stakeholders.
Efficient human resource management determines the bottom line. Hiring and retention, managing inter-personal conflict, avoiding expensive litigation and career development of staff are elements of business that the CEO must be confident in delegating to HR so he can focus his efforts elsewhere.