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Human Resources in small and medium-sized businesses: top strategy, implementation shows room for improvement

Human Resources in small and medium-sized businesses: top strategy, implementation shows room for improvement

Paderborn/Salzkotten, October 19, 2015 – How important is a strategy for HR organizations? Within the framework of the Lurse Cross Industry Benchmarks, the HR strategy consultant specifically asked participating HR organizations about the definition and implementation of the strategy as well as responsibilities, classification and the use of resources within the field of HR.

Just under 80 % of the 52 participating HR organizations belong to companies with up to 10,000 employees in Germany. Therefore, the study delivered extremely important insight regarding HR in German small and medium-sized businesses. The most important results are:

The topic of strategy has reached HR departments

The study clearly shows that the topic of strategy is very high up on the HR agenda and thus has become relevant for small and medium-sized companies. Consequently, 76% of HR organizations possess an explicitly formulated HR strategy. Annual strategic objectives for HR topics are in place throughout.

Management of the strategy implementation in need of improvement

There is significant room for improvement in terms of the management of the strategy implementation with key figures. According to their own estimations, only 30 % of HR organizations are managed extremely systematically and equipped with processes as well as key figures. Furthermore, 40 % thereof are companies with less than 5,000 employees in Germany and which are not a subsidiary of an international corporation. In turn, one-tenth of those surveyed admit that HR cannot be systematically operated if there is a lack of a strategy, processes or key figures. All companies within this group have less than 5,000 employees.

“The results clearly demonstrate that HR underestimates how much the individual performance depends on a systematic HR organization as well as processes and key figure systems to ensure the  management thereof. Small and medium-sized companies in particular shy away from the establishment of a corresponding process landscape, as they fear a high administrative expenditure. However, this can be reduced to a minimum through the use of a structured model, in which individual personnel instruments complement one other,” explains Anton Stockhausen, a member of Lurse’s board of management.

Room for a new HR self-image

Most of the HR organizations currently pursue the 3-pillar model (business partner, center of competence and shared services). The implementation of centers of competence appears to be highly widespread, while there is a significant correlation between the introduction of shared services and the size of the companies. However, there is only a partially recognizable changing role perception when transitioning from recruiters to business partners. “The question that should be asked here is whether or not the organization continues to need the classic recruiter. An intensified specification of the perceived role is however not to be expected. Rather the focus is shifting to the question of what the next level of development will look like for HR operating models,” emphasizes Dr. Stefan Fischer, a partner at Lurse.

The core tasks of HR organizations are human resource development, human resource support, compensation & benefits and executive development. These topics were mentioned most often by the surveyed HR organizations when asked which fields they are responsible for.

Lurse has been conducting benchmarks for more than 25 years. Thereby the spectrum ranges from compensation benchmarks as the basis of market-oriented compensation models to the exchange and further development of problem-solving approaches and current topics related to human resource policy. Further information at: www.lurse.de/en/expertise/benchmarking/