It has become trite to say that Human resources has been at the proverbial crossroads—between demonstrating strategic value and providing traditional Human Resources (HR) services. Last week as a part of the UC Berkeley curriculum, I was asked to pen my thoughts down on the article ‘System of Record’ and all of a sudden the views expressed in it appeared as a resounding board to me. It led me to ask myself – If traditional HR isn’t a business imperative then what is? What’s the future of HR? Rumbling through loads of articles and journals, reflecting on my prior work experience and numerous interationc with business managers, I percieve the following 3 aspects that would take HR to the next level.
– Concentrate on Strategic HR and Talent Management and automate Administrative HR.
Having worked in the profession for over 5 years now, I agree with various thought leaders and practitions in the function that over the last decade, significant strides have been made in improving service delivery and reducing time spent on administrative transactional work. However, when it comes to providing more value to the business, we in the function are often accussed of falling short of delivering business value. I agree with Naomi Bloom that our obsession with the transactional HR work cannot substitute the business need for focussing on talent identification and management.
According to me both traditional (adminsitrative) HR needs to be catered to but it’s the business imperaive of Talent Management that needs our greatest focus and attention. In my previous company, we used PeopleSoft HCM for our system of record or primary source of employee data repository which once implemented was an employee & manager initiated self service process. While it provided all the necessary data for any analytics, business decision making, Senior Management dashboards and the suite of Talent Management Business Intelligence tool – Hyperion, it didn’t cater to the needs of strategic HRM. The Senior Leaders including the CFO, CEOs and Business Directors would recieved a snapshot of all critical employee analytics on their respective dashboards required to make strategic decisions.
2. Focuss on business deliverables and outcomes rather than what the HR function does.
There is also a growing need for HR to focus on the outcomes that the function rather than what the function traditionally does. An important dimesion in this new thinking is that our focus ought to shift away from siloed functional solutions to holistic human capital solutions that matter most to our business (e.g., improving talent supply, increasing workforce performance, or ensuring that the business has the capabilities it needs to deliver on its strategy). My previous experience allows me to coroborate on this point in a two-fold manner. Our Hyperion BI tool allowed us to integrate our business ERPs like SAP SCM, Oracle Financials with our HCM systems – PeopleSof HCM, Portal and Enterprise Learning Solutions thus giving us HR Analytics that encompassed business dynamics such as productivity matrix, cost to company, compensation- market fitment data etc. The second point, our Job Descriptions defined according to the Hay methodology focussed on Role Accountabilities and Outcomes. This strategy allowed us to have a greater external focus around the business strategy, its customers, and investors rather than a siloed intrinsic approach that most companies have.
3. HR must learn to think more like the business:
Clearly, as Hewitt mentions it in their study -‘Next gen HR: Breakthrough Ideas for delivering business value’ , workforce issues loom large in the organizational consciousness. Progressive business leaders accept the fact that human capital is a critical differentiator in business success. They understand that up to 70 percent of a company’s market value can come from intangibles such as its human capital, its brand, and its culture. They realize that what an organization does with its people—its investments in and decisions surrounding human capital—will distinguish it from the competition. Questions that HR like its buisness counterparts should answer include:
- Where are we heading over the next three to five years?
- What do customers and investors expect from the business?
- What are the talent and organizational requirements needed to achieve those objectives?
- How do we best manage our resources to improve fi nancial performance?
An important learning imparted by my HR director was that we in HR need make a shift in mindset that calls for greater accountability and line of sight to business results which was perhaps the greatest challenge for me considering the fact that we were a conglomerate of 19 different buisnesses spread across 19 disparate geographies. However it also presents an opportunity for me to know where HR is today in order to take it to the next level.
For me, these 3 statements serve as guide posts thereby allowing me as an HR professional to understand how my contributions are aligned with what the business needs and with what the business demands from them. I am aware that a number of organizations in Corporate America are already well along the path and some like GE are even leading the way and there is one common trait that they all share- i.e. at the helm of the organization, they have Business and HR leaders who are committed to implementing organizational and workforce strategies that drive a competitive advantage.
The question you must ask yourself is whether your company will join them on the leading edge or whether you will be left behind.