HR Transformation: Progress Made But the Journey Continues

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HR Transformation Progress Made But the Journey
Continues

• Neil Reichenberg
• IPMA-HR Executive Director

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• If HR professionals want to keep their jobs and
  increase their influence, they must focus less on
  what they do their processes and systems and
  more on the value they can deliver to the
  organization.
• David Ulrich

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Background

• Why We Hate HR - 2005 Fast Company article
• After close to 20 years of hopeful rhetoric
  about becoming strategic partners with a seat at
  the table where the business decisions that
  matter are made, most human resources
  professionals arent nearly there. They have no
  seat, and the table is locked inside a conference
  room to which they have no key. HR people are,
  for most practical purposes, neither strategic
  nor leaders.

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Background

• The discipline I believe so strongly in is HR,
  and its the last discipline that gets funded.
  Marketing, manufacturing all these things are
  important. But more often than not, the head of
  HR does not have a seat at the table. Big
  mistake.
• Howard Schultz, Chairman, President, CEO of
  Starbucks

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Background

• Why Did We Ever Go Into HR?
• 2008 article in the Harvard Business Review by
  two recent Harvard MBAs who work in HR
• HR today sits smack-dab in the middle of the
  most compelling competitive battleground in
  business, where companies deploy and fight over
  that most valuable of resources workforce
  talent.
• The long held notion that HR would become a
  truly strategic function is being realized.

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World Public Sector Report

• 2005 UN World Public Sector Report, Unlocking
  the Human Potential for Public Sector
  Performance called for a heightened role for
  those working in human resources
• Staff responsible for human resources should
  have real input into strategic decisions about
  staff management as well as decisions on how to
  achieve core objectives of government. This calls
  for the upgrading of the status and influence of
  human resource managers in organizational
  structures and decision-making processes in the
  public sector.

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State of HR

• Most organizations recognize their employees as
  their most important asset.
• The right talent is the fundamental building
  block when it comes to creating an organization
  capable of innovating and changing
• Ed Lawler, Director, Center for Effective
  Organizations and Professor, University of
  Southern California
• HR is the only department that has the people of
  the organization as its primary mission
• The recession has resulted in a short-term focus
  on reducing costs - this should not result in
  abandoning longer-term workforce and succession
  planning efforts

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How Are Organizations Treating Their Most
Important Asset?

• Recent IPMA-HR survey showed agencies taking the
  following actions to address budget issues
• Restricting travel 66
• Hiring freeze 62
• Pay freeze - 59
• Reduce overtime - 56
• Reduce training - 56
• Layoffs -33
• Change retirement plans - 21

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Employee Engagement

• Why is it important?
• Employee engagement is associated with a range of
  positive outcomes at the individual and
  organizational levels
• Engaged employees perform better, are more
  innovative and more likely to want to stay with
  their employer
• Main drivers of engagement are meaningful work,
  senior management communication style and vision,
  supportive work environment, person-job fit, and
  line management style

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Employee Engagement

• Watson Wyatt/WorldatWork survey found that due to
  actions taken by employers during the recession,
  employee engagement has declined
• Employee engagement has dropped 9 since last
  year for all employees almost 25 for top
  performing employees
• Top performing employees are 20 less likely to
  agree that they understand the link between their
  goals and the organizations goals

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Employee Engagement

• Drop in employee engagement could have a
  detrimental impact on productivity, quality
  customer service
• As the economy recovers, there could be retention
  problems for employers, especially among top
  performers
• Compared with last year, top performers are 26
  less likely to be satisfied with the
  opportunities for advancement 29 say promotion
  opportunity would be a top reason for leaving

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HR Transformation

• Managing and developing the organizational talent
  is of paramount importance
• HR needs to shift focus to strategic activities
  that will add the most value and ensure that
  organizations have the right people, with the
  right skills in the right positions, at the right
  time
• HR needs to avoid falling into the trap of
  changing names and delivery mechanisms that
  result in providing the same HR services

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HR Transformation

• HR needs to continue to provide the basic human
  resource services on which their organizations
  depend
• If these are not done well, HR department will
  lose credibility it will be more difficult to
  move to a more strategic role
• There has been a move towards shared service
  centers that are established to handle HR
  transactional work

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HR Transformation

• It is a challenge to find time to move to a more
  strategic role, while continuing to provide high
  quality HR transactional work
• Human resource management is an organizational
  responsibility and not just the work of the HR
  department
• HR professionals should be consultants to the
  line managers and supervisors
• HR needs to understand the business of the
  departments within the organization

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Changing Roles of HR Management
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HR Transformation

• Chartered Institute of Personnel Development
  (CIPD) in Great Britain study found HR plays
  multiple roles in organizations
• Recruit retain key staff
• Develop employee competencies
• Improve the way in which people performance is
  managed
• Maximize employee involvement/engagement
• Improve employees focus on key business goals

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HR Transformation

• 81 of CIPD survey respondents reported the
  structure of the HR function has changed
• Top reason was the desire for the HR function to
  become a more strategic contributor
• Need to improve services, increased business
  focus, cost reductions were other reasons cited

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HR Transformation

• Compared to a similar survey three years earlier,
  HR staff has cut by a quarter the amount of time
  they spend on administration almost doubled the
  amount of time devoted to strategic matters
• However, HR function is still mired in
  transactional work
• 5 see HR administration as most important
  activity, yet 52 said it was most time consuming
• Developing HR strategy most important activity
  cited by 64 of respondents, but only 28 say
  they spent the most time on it

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HR Transformation

• IPMA-HR study found the key enablers of
  transformation are
• Strong management support
• Strong internal skills
• Appropriate funding levels
• Highly integrated IT systems
• Shared services

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HR Transformation

• IPMA-HR study found the key barriers to
  transformation are
• Lack of funds
• Lack of management support
• Poor IT systems
• Lack of skills/capabilities

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HR Transformation

• IPMA-HR study found that organizations are
  measuring transformation success by
• Higher customer satisfaction (only 37 conduct
  internal customer satisfaction surveys)
• Cost reductions
• Higher retention

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IPMA-HR Model

• To assist HR professionals to transform the HR
  function, IPMA-HR has established a competency
  model containing 20 competencies that serve as
  the foundation for HR professionals as they
  execute their work inside four major roles
• HR Expert
• Business Partner
• Change Agent
• Leadership
• IPMA-HR has a training program, Developing
  Competencies for HR Success designed to assist HR
  professionals with becoming business partners,
  change agents, and leaders within their
  organizations

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IPMA-HR MODEL
Business Partner
Change Agent
HR Expert
Leadership
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• Shaping Up Evolving the HR Function for the 21st
  Century, conducted by Deloitte, the authors
  concluded
• HR is at a turning point. During these times of
  rapidly changing economics, we believe HR is
  faced with a stark choice. It can either evolve
  and make a significant contribution, or be
  diminished and dispersed into the business.

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Conclusion

• HR is moving in the right direction, although
  more needs to be accomplished
• Organizations are at different stages of
  transformation
• HR profession needs to continue evolving
  focusing on important contributions it can make
  to the organization
• No simple answer nor is there a one-size-fits all
  approach that will work across organizations
• HR needs to develop better measures of its
  effectiveness impact

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Additional Information

• For additional information, please contact
• Neil Reichenberg
• Executive Director
• IPMA-HR
• nreichenberg_at_ipma-hr.org