HR: Think Like an Economist

That’s one of the prescriptive steps for HR leaders in Deloitte’s recently released Human Capital Trends 2013 report.

Today, many HR leaders are dealing with more complex, challenging questions than the ones their predecessors faced. Instead of focusing on traditional “personnel” issues, these new questions address core business issues: Where should we build a plant? Which M&A target will add the skills we need? Where should we locate a new R&D center? Why is our turnover rate in China so high?

Answering questions like these require new data and new thinking. Today’s HR leader has to think like an economist – someone who studies and directs the allocation of finite resources. In the global economy, talent is one of those scarce resources.

While embracing a different mindset is half the challenge, the report says, the other half is harnessing the applicable information, which requires an outward-looking perspective on issues including globalization, competition, a connected workforce and more complex business issues.

But:

Ultimately, HR decisions are like many other business decisions: They involve both cause and effect – and supply and demand. As HR leaders focus on solving more complex business issues, they increase their alignment with the other business leaders in their organization.

Download the full report here.

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