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Why HR Should Report to the CEO

A Business Management Success Tip About the HR Reporting Relationship

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People are the most important resource of your business. Often stated, but seldom totally believed, organizations will learn this important fact going forward, if they haven’t already. One of your biggest challenges of this decade will be attracting and retaining a superior workforce. Your Human Resources staff members are key players in recruiting and retaining staff. Your HR staff members should also lead your efforts in training and organization development. They are the heart of helping you form a positive, employee and customer-oriented culture.

With so much responsibility, and so much potential impact on your business, HR should report to the CEO or President of your company. This enables the HR person to speak directly to the person who most closely molds your corporate culture, the President or CEO. This direct contact, without having to work through layers of other managers who may or may not put forth the HR point of view, is important for your business success

Especially when HR reports to accounting or administration, you are not creating a needed check and balance in your organization. People needs vs. finance needs is a tough balancing act at best. When both are represented by the head of finance, you assure you won’t hear both points of view.

Strategically, your head HR person should participate in executive meetings and share decision making for the corporation. This enables the HR group to better understand and participate in managing the business. With thorough knowledge of the business, better decisions and recommendations come from HR. Your recruiting, retention, training, organization development, and culture are recommended and formed from a thorough understanding of your business needs.

Conversely, decisions about the business are made with full understanding about their impact on people, the culture, and the work environment. You enable your HR staff to affect your strategic outcomes. And, this is a positive factor in your business success.

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