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A new approach, a new capability
The strategic side of Human Resources
Reproduced with permission of the publisher, as it originally
appeared on the IBM website
http://www-935.ibm.com/services/us/gbs/bus/pdf/g510-6304-01.pdf
Authors: Eric Lesser and Michael
DeMarco
© Copyright IBM Corporation 2006
IBM Global Services, Route 100, Somers, NY 10589, U.S.A.
Produced in the United States of America
All Rights Reserved
IBM, and the IBM logo are trademarks or registered trademarks of
International Business Machines Corporation in the United States,
other countries, or both. Other company, product and service names
may be trademarks or service marks of others. References in this
publication to IBM products and services do not imply that IBM
intends to make them available in all countries in which IBM
operates.
28 August 2007
Back to ... Workinfo.com Human Resources Magazine Volume 1 Issue
12, 2007
Executive summary
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“If HR does not force its way into the heart of strategic
planning in organizations, it will default to a technical
and transactional dead end.” 1
– Helen Drinan, former
president and CEO, Society for Human Resources Management
|
Increased competition,
changing workforce demographics and a shift toward knowledge-based
work are requiring companies to place an increasingly higher
priority on improving workforce productivity. Organizations are
now looking to the Human Resources (HR) function to go beyond the
delivery of cost-effective administrative services and provide
expertise on how to leverage human capital to create true
marketplace differentiation. Facing these challenges, many HR
organizations have been actively revamping to more effectively
deliver the strategic insights the business requires.
Improving the
strategic capability of the HR organization is not, by itself, a
new idea. Spurred on by leading academics such as David Ulrich and
Edward Lawler, organizations have worked for the better part of
the last decade to build more strategic capability into their HR
departments.2 However, the
perceptions of many HR personnel and their internal customers
suggest that most have not reached this goal. A survey by the
Society for Human Resource Management indicated that only 34
percent of executives viewed the HR function as a “strategic
partner.”3 A similar study
from the Chartered Institute for Personnel Development in the UK
found that 56 percent of HR professionals aspired to become “strategic
partners,” yet only 33 percent currently perform this role.4
These findings, coupled with our research, suggest that the
migration toward a more strategic HR organization remains, for
many companies, a work in progress.
Competing in today’s
environment requires companies to focus on building a more
responsive, flexible and resilient workforce. To do so,
organizations must do a more effective job of sourcing talent,
allocating resources across competing initiatives, measuring
performance and building key capabilities and skills. HR
organizations that provide strategic guidance on these issues can
become proactive drivers of organizational effectiveness, rather
than simply a supporter of these efforts.
To better understand
the challenges and good practices associated with developing a
more strategic HR organization, the IBM Institute for Business
Value conducted interviews with 17 companies and tapped into a
range of experts who have worked with companies undergoing this
type of transformation.
As a result of our
analysis, we recommend that organizations focus on three areas to
improve their strategic HR capability:
-
Enable HR
professionals to apply human capital data and information –
on par with what the CFO would expect in Finance – to drive
business decisions
-
Develop a talent
model for HR that encompasses the need for new skills and
capabilities and is built through improved selection, employee
development and performance management
-
Build a roadmap
for HR transformation that builds momentum and embeds
strategic changes into the DNA of the business.
|
Study background
To investigate
how HR organizations are transforming themselves to focus on
more strategic issues, we took a three-step approach. First,
we reviewed relevant secondary literature to understand
existing transformation theory, models and practices.
Second, we conducted interviews with academics and
experienced practitioners – inside and outside of IBM –
who have worked with companies on HR transformation efforts.
Third, and most importantly, we conducted interviews with
senior HR executives from 17 companies that either have
undertaken, or are undertaking, strategic HR
transformations. These companies represented a range of
industries, including manufacturing, financial services,
technology and transportation from across North America,
Europe and Australia. For these interviews, we selected
companies that previously had addressed the administrative
transformation of their HR functions through outsourcing or
the use of an internal shared services organization.
|
Data, data, where
is the data?
One of the most
important lessons learned from our discussions is the critical
nature of data and information in enabling the strategic HR
organization. While in many organizations, human capital data
remains in the purview of IT architects and payroll providers, our
study participants were adamant about the critical need for HR to
have access to data and information that is both timely and
relevant to the challenges facing different business units. Among
the reasons why human capital data and information play such a
central role are the following:
Without accurate
and reliable human capital data and information, strategic HR
professionals cannot make fact-based decisions that provide
insights to their business clients
For HR to contribute
to higher value issues facing their business units, such as
performance and talent management and workforce development, they
need to assess the current situation, develop business cases and
provide recommendations that can withstand the scrutiny of the
larger organization. To accomplish this, they need access to data
and information that have the same level of timeliness and
validity as those provided to their counterparts in marketing and
finance. Further, HR professionals need to be comfortable that
their data is consistent with the data used by their peers in
other functional areas to avoid the need to revisit their
assumptions and recommendations.
|
“The database became one source of truth…they (the HR
Business Partners) could be confident in the data…that had
been an issue between HR and Finance.”
– Airline
participant
|
HR professionals
need data to assess the effectiveness of their own work
HR employees must
evaluate two aspects of human capital programs: the effectiveness
of design, as well as the execution of those programs. For
example, a company that has adjusted to flexible working hours
needs to understand what types of questions employees are asking
about the program, along with whether the program is having an
impact on retention rates of target employee groups. Without
either comprehensive case management data from a shared services
environment or the ability to produce trend analyses for different
employee groups, the HR staff has little ability to go beyond
anecdotal evidence – upon
which the HR function has long been accused of relying too heavily
in its decision making process.
Providing
self-service capabilities can enable employees and managers to
more easily address their own questions
HR professionals are
not the only ones who need access to reliable HR data and
information. Employees and managers need the capability to answer
their own questions regarding basic issues such as payroll,
expenses, benefits, vacation, performance ratings and the like.
Providing this data and information in an easy-to-use format that
is accessible without the assistance of HR professionals enables
individuals to quickly obtain answers to routine questions and
update changes in their own profiles in a timely manner. Without
this self-service capability, HR professionals are frequently
bombarded with questions that take away from their time and
ability to perform more valuable work.
Overall, the strategic
HR professional needs to have access to, and the ability to use,
human capital data and information. Much as the Chief Financial
Officer depends on a company’s cash flow, income statement and
balance sheet to make decisions about the financial assets, the
strategic HR organization needs the same level of quality
information to provide guidance on managing the firm’s human
assets. However, while many in the Finance organization already
have the analytic inclination and experience to transform
information into insight, the HR organization, as we will see in
the next section, often faces a shortfall in the number of
individuals with this key capability.
Building strategic
capability: The roles of the HR Business Partner and Centers of
Expertise
At the heart of the
strategic reinvention of the HR organization are the roles of the
HR Business Partner and the Centers of Expertise (CoE). While much
has been written about the changing nature of these roles,5
we find that organizations continue to struggle with a
number of factors (see Figure 1), including:
-
Defining the new
job responsibilities and performance measures for HR Business
Partners and CoE members
-
Identifying the
capabilities necessary to meet the new role expectations
-
Defining the
number of individuals needed to fill each of these roles
-
Identifying and
addressing sources of resistance when HR personnel are asked
to focus on more strategic activities.
New HR
responsibilities
In recent years,
companies have often retitled their HR generalists as “Business
Partners” in an attempt to connote a closer and more strategic
working relationship between the HR department and the operating
units. However, for many companies in our study, the very nature
of the work of a Business Partner has been redefined. For one,
much of the answering of routine questions and processing forms
has typically been moved to a shared services group. At the same
time, a significant amount of the front-line employee relations
work was also transferred to a combination of line managers and
dedicated shared services personnel. For some organizations, these
changes eliminated up to 70 percent or more of the workload of the
traditional HR generalist role.
In its place, HR
Business Partners were generally asked to take greater
accountability for more strategic tasks that need to be
accomplished over a longer time horizon. These could include
activities such as: consulting with business unit leadership on a
new productivity initiative; rolling out a new competency
framework; developing a talent capacity plan for a new product or
service launch; and developing a three-year labor outlook for an
emerging set of skills and capabilities. These activities are
designed to look beyond employee transactions at how the business
unit can make the best use of its current and future human capital
resources.
For individuals
working in CoE, the focus shifts toward playing two roles: thought
leader and integration manager. As thought leaders, CoE personnel
need to be responsible for designing HR programs and processes,
identifying and applying good practices from outside the
organization, monitoring program effectiveness, and providing
subject matter assistance to Business Partners and shared services
personnel. In addition, CoE personnel need to manage the
relationships with outsourcing vendors for their particular
discipline, including the monitoring of service level agreements
and conducting root cause analysis to address ongoing issues.
New capabilities
Based on the new tasks
of the HR Business Partner, study participants identified five key
capabilities that are needed to make a strategic contribution to
the organization:
HR Business Partners
need analytical skills to develop evidence-based recommendations
and effective business cases. They must understand how data flows
through various HR and financial systems, and how to obtain and
analyze human capital data that supports their recommendations. HR
Business Partners also need to be proficient in developing models
and scenarios that determine the cost and impact of changes in HR
policies and procedures. Participants in our study found that they
were unlikely to have sufficient depth in these skills within
their own HR organizations and considered them among the most
difficult to develop.
|
“We haven’t worked with our Business Partners on how
they access and shape the data into something useful… they
don’t even have access to the system. Being able to use
and analyze the data is a competence [we are] lacking right
now.”
- Engineering company
participant, just starting its HR transformation
|
HR Business
Partners also need business acumen in
the form of
understanding their business unit’s strategies and operations.
To serve as true advisors to the business, they must understand
the dynamics of their industry, as well as the day-to-day
activities performed by different functional units and how
individuals within the units are evaluated. They also have to
understand the needs of customers and partners to better see how
their human capital decisions impact stakeholders beyond the
organizational boundaries. Many organizations reported that this
in-depth knowledge of the business was often in short supply
within their HR groups. As one HR executive from an insurance
company commented, “We said to people, ‘Can
you tell the story? You have to know the market and the business.’…even
[so], I still have only a dozen people who can do it. This does
not come easy to an HR person.”
HR Business Partners
will have to serve as lead advisors to their business units on
human capital issues. To do so, a number of consulting skills are
essential, including the abilities to build trusting relationships
with senior executives, diagnose organizational problems and
determine root causes, develop recommendations and business cases,
and create action plans. Further, they must have the strength and
conviction to deliver difficult messages to senior leaders, even
if those messages may prove to be unpopular.
HR Business Partners
also need to be effective at driving change through
the organization. This includes soliciting and initiating
participation from individuals within the business unit to support
change efforts, aligning recognition and performance measurement
systems to support desired activities, and effectively
communicating with multiple stakeholders. As one engineering
services company commented, “We’re looking for people who are
proactive and can make an impact on people.”
HR Business Partners
not only need to provide expertise to the business units they
support, they also should share knowledge across the
HR organization. One way to do this is to regularly connect with
peers in other business units to share relevant practices, while
another is to work with individuals in the CoE to pass along new
learnings. One banking organization developed a “Business
Partner Forum” to share information and best practices.
According to the leader of the transformation program, Business
Partners are charged “not only [to] come and listen, but to take
[information] back to their management teams and get the message
out there.”
For individuals
residing in the CoE, study participants identified a different set
of required capabilities:
-
deep functional
expertise;
-
the ability to
partner with internal stakeholders;
-
process design and
stewardship; and
-
large-scale
project management.
CoE personnel
must possess deep functional knowledge and
an understanding of leading practices within their particular
disciplines. Because the CoE serves as both the developer and
arbiter of HR policy, individuals working in this area must apply
technical knowledge of their discipline and understand its
application to the overall business. As one banking organization
noted, “I expect the CoEs to focus not on best practices, but
next practices … they need to be the ones supporting the
[Business Partner] to make sure that forward thinking is getting
implemented at the ground floor.”
In the more
collaborative environment that characterizes transformed HR
organizations, individuals working in CoEs need to partner with
others across the organization to
design and implement effective policies. As one banking
organization indicated, “I want [the CoEs] to work with the
shared services group as it relates to changing policies and
procedures…there is more collaboration [required] to reach out
and work as a team on things like surveys and talent management.”
CoE personnel might be called to work with Business Partners to
design programs addressing business unit needs, to work with
shared services to implement cost-effective HR programs that
reduce employee confusion, or to connect with line managers and
employees to periodically assess the value of CoE programs and
services.
As leading
corporations become larger and increasingly global in scope –
often through merger and acquisition activity that brings together
disparate processes for similar activities overnight –
the ability to create common, institutionalized process
activities and metrics is
vital. At the same time, CoE personnel must have the flexibility
to identify appropriate regional or business unit variations and
determine how those modifications need to occur. As one technology
company explained, “One of our central principles was going to
more of an ‘architect and distribute’ model;
with centers of excellence architecting how we do things and then
distributing [information] out to the regions. We want 80 or 90
percent commonality, with 10 to 20 percent specialization for
regional differences.”
As the HR organization
becomes increasingly strategic and vital to overall business
operations, CoE personnel must
be capable of managing larger projects that
involve stakeholders
from various parts of the business. As one insurance company
noted, “There are certain big projects the CoE [is] still
running. You have to determine the projects where you work with
the line and where you work more with the Business Partners.”
For many organizations, this includes overseeing multiple vendors
providing external services. To keep these projects on track, they
must develop detailed action plans and regularly track progress
against those plans, as well as manage budgets and associated
financial systems. Finally, they must communicate progress to key
stakeholders on an ongoing basis.
|
Figure 2.
Summary of HR Business Partner and Center of Expertise
capabilities. |
| Key
capabilities of an HR Business Partner |
Key capabilities for individuals working in a Center of
Expertise |
-
Analyze
human capital data to solve business problems
-
Understand
the business and determine human capital requirements
-
Act as a
consultant to senior management
-
Drive change
through the organization
-
Share and
leverage good practices
|
-
Deep
functional expertise
-
Ability to
partner with internal stakeholders
-
Process and
program design and stewardship
-
Large-scale
project management
|
| Source:
IBM Institute for Business Value analysis. |
Providing the
right level of support to the business
One of the common
questions asked by organizations is, “How
many HR personnel do we need to support the new organization in
the transformed HR model?” Our study found that companies did
look at traditional benchmarking ratios obtained through a number
of consultancies and third-party providers. For example, a recent
study of 20 U.S. companies by the PricewaterhouseCoopers/Saratoga
Institute indicated a median ratio of one HR Business Partner for
approximately 1000 employees.6
However, companies are only using these ratios as a very rough
approximation in determining the appropriate level of HR Business
Partner staffing.
Instead, IBM study
participants used a series of criteria to evaluate the appropriate
level of support – including the strategic intent and complexity
of the business unit, the strength of existing management, the
maturity of employee and managerial self-service tools, and the
geographic spread of employees within the unit. Each of these
variables can significantly impact the required number of Business
Partners. For example, a business unit that is poised for
significant growth in an emerging market may require additional
Business Partners to support an employee population that is new to
the organization and requires greater “onboarding” and
training assistance. Similarly, an organization with experience in
successfully implementing employee self-service technologies
may need fewer Business Partners to answer routine inquiries.
Sources of
resistance from HR personnel
|
“My own HR people, hands down, were the biggest challenge.
They liked what they were doing…They didn’t like
numbers. They didn’t like seeing the organization as their
client…They weren’t open to change…They weren’t very
analytical.”
– Insurance company participant
|
Any time a large
organization attempts to alter existing social contracts that have
taken root, there will be stakeholders who resist that change. In
the evolution of the Business Partner role, we observed three
specific sources of resistance:
Many so-called HR
Business Partners remain comfortable providing short-term answers
to line managers, who in turn, appreciate this individualized
service. Indeed, the need to “provide service to the business
unit” has historically been defined as providing rapid answers
to routine queries. According to several individuals we
interviewed in the study, this often leads to an unhealthy
codependency as business unit executives become reluctant to go to
the shared services centers for assistance, and the HR
professionals continue to spend significant amounts of time
addressing administrative questions. This symbiotic relationship,
as several participants indicated, crowds out time and energy that
HR Business Partners could use to focus on more strategic issues.
|
“Some Business Partners were afraid that by not providing
(administrative) answers, they were losing their credibility
with their business unit clients. We needed to give them
incentives to work the right way.”
– Energy company participant
|
In some situations, we
found HR Business Partners to be uncomfortable using analytic
approaches to develop insights and build business cases. As
one insurance company described, “My own HR people, hands down,
are the biggest challenge. They liked what they were doing…they
didn’t like numbers…they weren’t very analytical.” While
training and coaching opportunities can address these skill gaps,
our study participants were clear that not all professionals had
the interest or inclination to work in a more quantitative
environment.
Simply reorienting
existing work arrangements and relationships takes a significant
amount of effort. Without a clear, compelling reason to change (a
so-called burning platform), these efforts can stall. Study
participants highlighted the importance of not only explaining to
people the rationale and benefits of change, but also the
consequences of not changing. One participant described how the
head of HR told his direct reports, “If you haven’t
transitioned that (administrative process) over, you better hurry
up. And if I come to your shop and find out you’re doing it
yourself, you won’t be working here anymore.”
As companies moved
much of their administrative work to shared services centers and
outsourcers, the need for larger, dedicated teams within Centers
of Expertise often diminished. In many cases, the remaining
individuals within the CoE found themselves hesitant to fully
accept the new strategic HR model for a number of reasons. These
included having less direct access to internal customers
and having fewer staff to accomplish their work.
For many study
participants, personnel within the CoE found the need to work more
closely with their HR Business Partners and shared services
personnel to be a significant change. In the past, the CoE
often worked directly with business unit executives to
design and deliver HR policies and procedures. Also, they tended
to work directly with line managers and employees to gauge
reactions and respond to inquiries about HR programs.
In the new HR model,
CoEs are now being asked to work through HR Business Partners to
determine business unit needs and collaborate with shared
services to determine the effectiveness of HR policies and
procedures. These changes, which represent somewhat significant
departures from past practice, often caused resentment among CoE
personnel. An airline company reported, “[CoE personnel] didn’t
understand the new three-pronged approach to HR and that they were
supposed to do policy and then hand it over to shared services…so
they struggled with the new concept.”
|
“We still have people who like to be experts and tell
others what to do, and to tell the business line managers
what to do, not to work with them as strategic Business
Partners.”
– Insurance company participant
|
CoE personnel, whose
organizational stature was previously determined by the number of
“bucks and bodies” (budgets
and headcounts) under their control, often resisted
surrendering the associated prestige and job security associated
with overseeing large departments. In many situations,
projects once easily assigned to CoE
staff needed to be completed by outsourcers who required special
agreements – or even contract modifications –
before assuming additional work. As a consultant who works
frequently with HR transformation indicated, “For
bigger projects, the CoE needs to phone up your outsourcer and
list it as a project. Many (HR) technical experts find it
difficult to operate in this model. They have lots of angst and
hard times. They need to be able to do it on their own.”
Timing: Determining
the appropriate sequence, speed and scope for change
In addition to
changing roles and responsibilities, we found that study
participants learned a number of important lessons regarding the
sequencing, speed and scope of their transformation efforts. Among
the critical findings were:
-
The planning of
the new strategic HR model needs to occur concurrently with
development and implementation of the administrative changes
in the HR organization
-
Many companies
took an aggressive restaffing approach to verify that HR
personnel in strategic positions had the right experiences and
capabilities to do their jobs
-
While a
significant number of changes need to be made in the first 18
months of the transformation effort, longer-term change often
required two to five years.
Most organizations we
studied focused on developing their new strategic HR model while
they were building their administrative infrastructure. On the
administrative side, developing shared services organizations for
administration and employee servicing, implementing an Enterprise
Resource Planning (ERP) system, providing basic data warehousing
functionality and delivering basic employee self-service
functionality were all seen as critical components to enabling a
more strategic HR organization. Without them, strategic HR
personnel would not have the time, resources or information to
develop insights that would provide value to the business.
As the administrative
infrastructure was being built, companies simultaneously took the
next steps in redefining the new strategic HR workforce and
organizational model. Staffing, for example, involved assessing
competencies of existing HR personnel and selecting individuals
for new roles, both from within and outside of the HR
organization. As part of the new design, education was developed
to close any significant skill gaps. At the same time,
articulating new performance measures and goals helped to keep HR
employees focused on desired activities.
Most companies in our
study took an aggressive approach in putting new personnel into
strategic HR positions. We found that the degree of aggressiveness
was linked to several primary drivers, with more aggressive
organizations usually transforming HR as part of a cost reduction
movement or the need to align with other organizational units also
being restructured. By contrast, slower, evolutionary changes
tended to occur in organizations that were focused on improving HR
service levels and upgrading HR capabilities.
More aggressive
organizations tended to fill their redefined HR positions by
conducting competency assessments of existing personnel and
filling positions from the top down. In these situations, anywhere
from 50 to 100 percent of HR positions changed hands, while
headcount was reduced between 25 to 50 percent.
Their less aggressive
counterparts replaced existing positions only through attrition
and less than 20 percent of positions within the HR function
changed at all. Furthermore, in these cases, less than 10 percent
of positions were eliminated. While companies managing attrition
through an evolutionary approach may have encountered less active
resistance to change, most companies reported that it was
extremely important to staff strategic HR positions properly from
the beginning. As one insurance company indicated, “You need to
take drastic measures early with the HR BP organization. Don’t
kid yourself that people who have never been strategic are going
to become strategic. Make your bold moves early.”
Any significant change
at a large organization requires visible, tangible action to let
personnel know that the old order has been undeniably changed and
a new paradigm has taken its place. Study participants
consistently cited the first 18 months of a change initiative as
the window for enacting significant change. Beyond this point,
study participants noted the difficulty of maintaining senior
management attention. Further, they indicated that employees can
only tolerate the associated disruption and uncertainty for a
limited period of time before morale begins to falter.
However, to truly
saturate an organization’s DNA with new ways of working, study
participants recognized that longer-term cultural change needs to
continue long after the initial 18-month window. To sustain
desired change over the long term, HR organizations must reinforce
behaviors through a number of performance review cycles, holding
to the needed changes while allowing individuals to have time to
adjust to new roles and responsibilities. In doing so, HR leaders
must continually foster working relationships, and clarify roles
and responsibilities among HR Business Partners, shared services
and the CoE.
Recommendations
Based on our
discussions with senior HR executives, companies should focus on
three areas as they work to upgrade the HR function’s strategic
capability:
-
Enable HR
professionals to apply human capital data and information –
on par with what the CFO would expect in Finance – to drive
business decisions
-
Develop a talent
model for HR that encompasses the need for new skills and
capabilities and is built upon improved selection, employee
development and performance management
-
Build a roadmap
for HR transformation that builds momentum and embeds
strategic changes into the DNA of the business.
Enable HR personnel
to apply human capital data and information
As our findings
suggest, human capital data and information are the lifeblood of
the strategic HR organization. Organizations looking to use data
and information to build fact-based decisions need to do the
following:
-
Verify that the
data sources used by strategic HR personnel are of high
quality and consistent with other reporting systems.
-
Teach Business
Partners and CoE personnel how to translate human capital data
and information into compelling recommendations to the
business. HR Business Partners need to use basic analytic
tools and statistics, both to develop hypotheses, as well as
to incorporate data into compelling presentations.
-
Work toward
achieving high adoption of employee and managerial
self-service tools to build consistency in employee data and
reduce the volume of questions Business Partners face. To do
this, increase marketing and educational efforts on rollouts
of applications that receive high volumes of employee traffic.
-
Leverage employee
contact center case management data to evaluate HR program
clarity and effectiveness.
Develop a talent
model that can deliver higher value services
Given that many
organizations have notable shortages in the skills needed to
provide more strategic services, we see five potential options for
closing the gap:
-
Bring in HR
professionals from outside the company – A
number of study participants recognized the need to hire
outside HR professionals to attain the next level of strategic
capability. While recruiting experienced talent from the
outside can bring instant skills and capability, there is
typically a lag time between finding talent in the outside
market and getting them up to speed in their new positions and
environment.
-
Attract
employees from within the company, but outside the HR function
– Many firms
discovered that the talent they
need exists within the organization, but outside the HR
function. For example, given their knowledge of the business
and their comfort with analytics, finance and audit personnel
were identified as potential candidates for HR advisory
positions. However, study participants recognized the need for
such individuals to rapidly come up to speed on the
fundamentals of HR management to be effective in their new
roles.
-
Provide
education to existing HR professionals – Continuing
education was also viewed as critical to building the
capabilities of strategic HR staff. In one organization, a
structured set of distance learning modules was developed,
addressing business skills, global resourcing strategies,
industrial relations and analytic decision making. It required
that all HR staff at a certain level complete each of these
modules and pass certification exams. Other study participants
used outside training courses to improve the ability of their
HR staff to think strategically and provide consulting
services to their internal business unit clients.
-
Support
individuals as they perform their new jobs –
Providing mentoring
to individuals as part of their day-to-day activities was also
considered essential. For example, in one organization, HR
personnel were encouraged to come together and present
analyses to one another before presenting them to their
business unit clients. Consistent coaching and mentoring
allows individuals to receive feedback on their newly directed
capabilities – quickly addressing questions and reinforcing
positive actions. However, this ongoing support needs to be
combined with clear performance goals and targets that focus
strategic HR professionals on new achievements and away from
their former administrative activities.
-
Foster
participation in outside development activities –
Identifying opportunities
beyond the classroom for HR professionals to broaden their
skill bases was also seen as an important development step.
For example, sitting on the boards of not-for-profit and
community organizations was seen as a valuable way of
obtaining business experience. Not only were individuals able
to develop new skills, these opportunities were recognized as
a way for individuals to bring new ideas and practices into
the organization.
Regardless of which
combination of these skill-building options is followed, project
leaders must provide ongoing communication and mentoring of HR
staff to build buy-in for the changes underway. This process
cannot be overlooked, as consistent reinforcement and support can
reduce the risk of individuals slipping back into old, undesirable
work habits. Ongoing communication is vital –
both with senior leadership to maintain buy-in and key
stakeholders to avoid political maneuvering.
Build, then
follow a roadmap for HR change
Given that
transforming large, complex HR organizations can be difficult,
organizations need to craft a thorough roadmap. To begin, the HR
function should establish the primary administrative building
blocks – including shared services, a standard data platform and
employee self-service tools – while, at the same time, formulate
plans to upgrade strategic HR capabilities. These building blocks
help provide strategic HR personnel with the right data, time and
resources to provide the necessary services to their internal
clients. The transformation of the administrative side of the HR
organization can be achieved through internal transformational
activities or through partnering with an outsourcer.
While developing the
administrative infrastructure, organizations need to build a model
for the new strategic HR workforce, determine the HR competencies
needed to enable that model, and create the supporting education
and performance measures to make the model successful.
To build success
within a relatively short window, it is critical that individuals
with appropriate skill levels fill key strategic positions within
the HR organization. Often, this requires difficult choices
regarding the number and types of people in these key roles.
To create momentum and early wins with the business units, it is
necessary to make significant changes to key roles,
responsibilities, performance metrics and developmental
requirements early in the process. While it may take time for
these early strategic changes to fully take root, they can help
business units reap larger dividends down the road.
References
-
Jamrog,
Jay J. and Miles H. Overholt. “Building a Strategic HR
Function: Continuing the Evolution.” Human Resources
Planning. January 2004.
-
Ulrich,
Dave and Wayne Brockbank. The HR Value Proposition.
Harvard Business School Press. 2005; Lawler III, Edward E.,
and Susan A. Mohrman. Creating
a Strategic Human Resources Organization: An Assessment of
Trends and New Directions. Stanford
University Press. 2003.
-
Jamrog
and Overholt. January 2004.
-
Chartered
Institute of Personnel and Development. “Business
Partnering: A New Direction for HR.” 2003.
-
A
thorough overview of this subject can be found in Hunter, Ian,
Jane Saunders, Alan Boroughs and Simon Constance. HR
Business Partners: Emerging Service Delivery Models for the HR
Function. Gower
Publishing: Hants, England. 2006.
-
PricewaterhouseCoopers/Saratoga
Institute. 2004 HR Metrics Study.
About the authors
Eric Lesser is
an Associate Partner with over 15 years of research and consulting
experience in the area of human capital management. He is
currently responsible for research and thought leadership on human
capital issues at the IBM Institute for Business Value. He is the
co-editor of several books and has published articles in a variety
of journals including the Sloan Management Review, Academy
of Management Executive,
and the International Human
Resources Information Management Journal. Eric
can be contacted at elesser@us.ibm.com.
Michael DeMarco
is a Senior Consultant with the IBM Institute for Business Value
and focuses his efforts on Human Capital Management. He has eleven
years of consulting experience in a range of areas including human
capital, financial management and performance measurement. Michael
is based in Fairfax, Virginia and can be reached at michael.l.demarco@us.ibm.com.
IBM
Institute for Business Value
IBM
Global Business Services, through the IBM Institute for Business
Value, develops fact-based strategic insights for senior business
executives around critical industry-specific and cross-industry
issues. This executive brief is based on an in-depth study by the
Institute’s research team. It is part of an ongoing commitment
by IBM Global Business Services to provide analysis and viewpoints
that help companies realize business value. You may contact the
authors or send an e-mail to iibv@us.ibm.com
for more information.
About
IBM Global Business Services
With consultants and
professional staff in more than 160 countries globally, IBM Global
Business Services provides clients with business process and
industry expertise, a deep understanding of technology solutions
that address specific industry issues, and the ability to design,
build, and run those solutions in a way that delivers bottom-line
business growth.
Short summary
The future role for HR lies in understanding and implementing
business strategy in analytical assessment of HR data and making
recommendations to strategic partners within the organisation.
Keywords and relevant
phrases
Access to data, accountability, action plan, administrative
infrastructure, analysis, analytical skills, assessment,
benchmarking ratio, business acumen, business cases, business
decisions, business plan, business strategy, Centre of Expertise,
CoE, change management, collaboration, communication, consistency,
consulting skills, corporate culture, data warehousing, decisions
making, effectiveness, enterprise resource planning systems,
evidence-based recommendations, expertise, flexibility, functional
knowledge, HR Business Partner, HR generalist, HR practice, HR
procedure, HR process, HR programme, human capital data,
integration manager, internal recruitment, job descriptions,
knowledge management, leadership, learning, managerial support,
mentoring, morale, motivation, performance measurement,
performance review cycles, project management, responsibilities,
root case analysis, share knowledge, self-service tools, selection,
service level agreement, shared service, skills development,
stakeholder, strategic partners, strategy, talent capacity plan,
talent management, talent model, thought leader, transformation,
trust.
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12, 2007
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