Different future for HR

Line managers question HR’s credibility

Only 24 percent of line managers believe that their HR function adds value to their organisation, according to research by the Roffey Park institute.

Roffey Park’s Management Agenda 2009, which surveyed 1,050 managers overall, also found that only 11 per cent agreed that HR was “customer-focused”.

The research asked the same questions to over 200 HR managers and, surprisingly, found that 44 per cent of them did not believe that the function was adding value either.

The survey’s researchers concluded: “Maybe there is still more work to be done to define what value-adding HR looks like in any given organisation.”

Despite this, there is some evidence that HR has gained power in recent times, with 75 per cent saying the function was “influential” in their organisation and 64 per cent agreeing it had “credibility” with leadership.

However, 81 per cent of managers described the function as “out of touch with the rest of the organisation” and 57 per cent said that they saw HR as reactive – only 24 per cent described their HR department as proactive.

“We want to have more people selling instead of watching people sell and fewer human resources people watching -- God only knows what they watch…” Bob Lipp Citigroup Cost Cutter.

Q: "How can you tell which one is the HR leader in a business meeting?"

A: "That's the one without any data."

Have you heard this joke before? Unfortunately in many organisations, HR is still not considered a partner in the setting of strategic direction - that is, not until HR is able to provide insights on human capital using fact-based, actionable data framed in language that boardroom executives relate to.

What CEOs want?

Aligned at the Top, a global survey by Deloitte with the Economist Intelligence Unit, reveals that the ability to gain competitive advantage through people has risen to the top of the corporate agenda, with 60% of senior executives identifying people as 'vital' to their business performance and 90% saying people issues will become more important over the next five years.

Yet only 5% of these senior executives describe their company's HR function as highly effective in addressing the people needs of the business, and only 3.4% say their organisation is world-class in people management and HR.

Most worryingly, these global chiefs question whether HR has the right skills to do the job - that is to implement a strategic vision on leadership development and talent, motivation and organisational culture; all areas that should be at the heart of HR practice.

According to Sabri Challah, head of human capital consulting practice at Deloitte, HR professionals need to raise their game. There is disconnect between what CEOs want from HR and what HR can deliver, he said.

'This research is a challenge to HR to start addressing those things that make most material difference in a business,' Challah said. 'Everyone agrees with the people agenda but CEOs do not have confidence in HR.

HR leaders "have got to create a product at the right price and with certain characteristics that the buyer needs," says David Rhodes, a principal at consulting firm Towers Perrin.The product is the contribution of the workforce to specific business goals. The buyer is senior management.

A hugely impactful HR leader shows the CEO the relationship between interventions in people and the competitiveness of business.' Chris Roebuck (who in 2011 was nominated by HR Magazine as one of the top 20 Most Influential HR Thinkers) says it's all about communication and credibility. 'HR directors need to think about what subject the CEO would like them to deliver on, for example talent. They need to ask: 'what can I say to the CEO that delivers something simple, rapidly and that is an easy win to boost my credibility?''

Different future for HR

If HR wants a different future it has to create it. It has to believe and care deeply about what it is wishing for. Courage turns organisational rhetoric into action. It turns strategy into performance; turns values written on paper into a living culture; turns human ‘capital’ into people; encourages employees to be engaged; changes hierarchical and rule led groups into self-managing teams. In essence, courage transforms organisations.

"HR is dead. Long live HR," says David Ulrich, a professor of business administration at the University of Michigan. That's his way of saying that "the old HR" -- that which emphasizes expertise in transactions and paperwork -- "is dying in a sense." HR departments will be smaller, says Ulrich. "Some of HR will go away. Some of HR should go away." In its place will raise a leaner, refocused cadre of professionals who put the business first and foremost.

HR people who develop business competencies and embrace the new roles -- in the process redefining themselves and their profession -- can aspire to greater and much more rewarding careers than were possible for HR people a generation ago.

HR roles of the Future

The CFO for HR. This person can apply the metrics to demonstrate the inherent economic value of HR and to analyze the cost-effectiveness of various practices HR proposes or implements: How much do certain employees contribute to the bottom line? How much does the right training help the business? Which functions or programs do not add value and should be eliminated?
The internal consultant. This person helps spread HR competencies through the organization, empowering line managers to recruit, interview, hire and retain the talent that they need while counseling the managers on crucial legal and ethical matters such as disability and age discrimination laws.
The talent manager. This person is responsible for finding, developing and keeping the best and the brightest workers to meet the needs of the organization. He or she will manage learning and succession planning, moving people through the talent pipeline.
The vendor manager. He or she determines which functions can be handled better and less expensively outside the organization. This professional monitors quality and costs, stays on top of trends in this business, and maintains a close working relationship with outsourcing firms and other vendors.
The self-service leader. This person works with internal- and outside-information-technology specialists to establish and run Web-based portals for many automated functions, such as benefits and pension administration, which employees can access from their desktop computers.