systematicHR

HR 2006 Intro – What is HR Strategy?
HR 2006 Part 1 – Priorities

We left off last week with this:

Not only do we need to concentrate on how we recruit, develop and retain talent from the pure workforce perspective, we also need to understand how we are creating an overall environment to engage these people. What makes the picture even more complex is that the business environment for talent will continuously change over the next 5, 10 and 15 years.

This week we talk about who we need to be as HR executives and the types of issues that are impacting the way we do our business.

In November of 2005, Mercer teamed up with the Harvard Business School to put out this forward looking paper on “Where HR Needs to Go.”November 1, 2005. “Tempered by Fire: Where HR Is. Where It Needs to Go.” Harvard Business School Publishing. Interviewing 65 senior HR executives, they discussed where we need to be and what some of the issues confronting us are. Before we tackle where we need to go, let’s talk about who we need to be.

Many senior HR executives are thoroughly tired of the conversation around “strategic partnering” or “business partnering.” “I remember having this conversation 20 years ago.” Ditto for discussions of whether HR is adding value: “Why would we even debate whether or not we add value? This has been going on for 10 years, the same conversation. If you have to ask whether or not you’re adding value, you’re already off the boat. Get out if you have to ask.”

Perhaps even more fundamental – and this is key to the skill set they see required of their successors – many take great strength from their deep understanding of their company’s businesses … “A lot of us are effective at read and react. But I’ve met extraordinary HR people who can pull the wagon around the curve – they understand the business that well. They’re at the table and they can pull operational people away from certain decisions.”Ibid

The successful HR executive is not a person who can negotiate around the intricacies of learning, talent, HRMS and policy. In fact, the HR executive doesn’t really need to come from HR anymore. They simply need to be a person who can understand the business strategy and apply it through their HR leaders.

Outsourcing:

The debate on outsourcing has raged for years, and outsourcing has won, in the sense that almost everyone has either embarked on some new sourcing arrangement for transactional work – whether outsourcing, central sourcing, or insourcing to a heavily reconstituted group within the company – or is actively exploring the possibility.

But companies that have put outsourcing arrangements in place report benefits that go beyond cost savings. Some praised it for the way it had revealed hidden costs and bottlenecks. When a particular function was still done in-house, the costs, including the costs of delays caused by other departments, could end up hidden within HR’s budget. With outsourcing, the process and who is holding things up becomes transparent and can be addressed.

And just how prepared is HR to manage the outsourcing process? … The larger point: “HR hasn’t built up experience in vendor management; it’s not a core competency, not like it is for IT.” This suggested to some participants that a source for skill building might be a partnership with their company’s IT function.Ibid

There is such wisdom here. In many/most cases, outsourcing a process is really the right thing to do. Yet we are disillusioned with it so often and can’t figure out why. I’m sure that the service vendors don’t hold up their end of the bargain sometimes, but the reality is that we as HR practitioners don’t always know how to truly manage the relationship. We have not professionally set the boundaries and roles required to measure success and performance. Until we do this and many other aspects of vendor management, we simply won’t be successful at outsourcing. (I feel another series coming on…)

Talent

When asked what will be the core functions of HR in five years, almost everyone put talent management – broadly defined to include recruiting, development, and retention of talent – at the top of the list.

If the war for talent 10 years ago was about competing for twenty- or thirty-somethings who might have an inflated sense of their worth to the company, today it’s likely more about how to fill in for waves of 55-year olds who may be leaving the company soon, taking lots of specialized skills and tacit knowledge with them. Can they be induced to work part time, or with more flexible job arrangements, or to come back periodically for special projects? And how do we transfer their vast knowledge to future generations of workers?Ibid

Another lug to read part 1 if you haven’t done so already.

Metrics

While almost no one was completely happy with the metrics available to measure HR’s efforts, this may reflect less of a problem with the metrics themselves than with the fact that what HR is to be measured on is changing markedly and the metrics haven’t necessarily caught up. “Everyone agrees that HR needs ways of measuring effectiveness and ways of measuring its contribution to strategy – and that most HR departments are working to develop these kinds of measures. But the problem is that there is no standard, and until there is a standard measure, it will be a problem for HR.” The core problem: “How do we know that HR is really adding value to the business?” And “How do you prove the value of what the company spends on HR? When you’re making a decision between efficiency and innovation, what metrics are needed?” Ibid

Ugh!!! I can’t stand metrics. Why? Because they mean nothing to the business. I mean, HR metrics are HR metrics. They measure the activities of an HR department. How the heck do you get these metrics to measure the quality of impact to the business strategy?

Don’t get me wrong, metrics are critical to measuring ourselves. But to the HR executive, they are useless because they measure the wrong things. I stated earlier that an HR executive does not need to intimately know HR. They are strategists who are able to apply HR to the business. Think about what they want… it’s not a turnover or time to fill report. It’s not that cool cube that you are creating in Cognos.

Next week we talk about change.