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HR Transformation: Progress Made But the Journey Continues Neil Reichenberg IPMA-HR Executive Director

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. - PowerPoint PPT Presentation

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Page 1: HR Transformation: Progress Made But the Journey Continues

HR Transformation: Progress Made But the Journey Continues

Neil ReichenbergIPMA-HR Executive Director

Page 2: HR Transformation: Progress Made But the Journey Continues

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

Page 3: HR Transformation: Progress Made But the Journey Continues

BackgroundWhy 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 aren’t 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.”

Page 4: HR Transformation: Progress Made But the Journey Continues

Background“The discipline I believe so strongly in is HR, and it’s 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

Page 5: HR Transformation: Progress Made But the Journey Continues

BackgroundWhy Did We Ever Go Into HR?

2008 article in the Harvard Business Review by two recent Harvard MBA’s 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.”

Page 6: HR Transformation: Progress Made But the Journey Continues

World Public Sector Report2005 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.”

Page 7: HR Transformation: Progress Made But the Journey Continues

State of HRMost 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

Page 8: HR Transformation: Progress Made But the Journey Continues

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%

Page 9: HR Transformation: Progress Made But the Journey Continues

Employee EngagementWhy is it important?

Employee engagement is associated with a range of positive outcomes at the individual and organizational levelsEngaged employees perform better, are more innovative and more likely to want to stay with their employerMain drivers of engagement are: meaningful work, senior management communication style and vision, supportive work environment, person-job fit, and line management style

Page 10: HR Transformation: Progress Made But the Journey Continues

Employee EngagementWatson 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 employeesTop performing employees are 20% less likely to agree that they understand the link between their goals and the organization’s goals

Page 11: HR Transformation: Progress Made But the Journey Continues

Employee EngagementDrop in employee engagement could have a detrimental impact on productivity, quality & customer serviceAs 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

Page 12: HR Transformation: Progress Made But the Journey Continues

HR TransformationManaging and developing the organizational talent is of paramount importanceHR 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 timeHR needs to avoid falling into the trap of changing names and delivery mechanisms that result in providing the same HR services

Page 13: HR Transformation: Progress Made But the Journey Continues

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

Page 14: HR Transformation: Progress Made But the Journey Continues

HR TransformationIt is a challenge to find time to move to a more strategic role, while continuing to provide high quality HR transactional workHuman 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 supervisorsHR needs to understand the business of the departments within the organization

Page 15: HR Transformation: Progress Made But the Journey Continues

1–15

Changing Roles of HR Management

Page 16: HR Transformation: Progress Made But the Journey Continues

HR TransformationChartered Institute of Personnel & Development (CIPD) in Great Britain study found HR plays multiple roles in organizations

Recruit & retain key staffDevelop employee competenciesImprove the way in which people performance is managedMaximize employee involvement/engagementImprove employees’ focus on key business goals

Page 17: HR Transformation: Progress Made But the Journey Continues

HR Transformation81% 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 contributorNeed to improve services, increased business focus, & cost reductions were other reasons cited

Page 18: HR Transformation: Progress Made But the Journey Continues

HR TransformationCompared 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 mattersHowever, HR function is still mired in transactional work

5% see HR administration as most important activity, yet 52% said it was most time consumingDeveloping HR strategy most important activity cited by 64% of respondents, but only 28% say they spent the most time on it

Page 19: HR Transformation: Progress Made But the Journey Continues

HR TransformationIPMA-HR study found the key enablers of transformation are:

Strong management supportStrong internal skillsAppropriate funding levelsHighly integrated IT systemsShared services

Page 20: HR Transformation: Progress Made But the Journey Continues

HR TransformationIPMA-HR study found the key barriers to transformation are:

Lack of fundsLack of management supportPoor IT systemsLack of skills/capabilities

Page 21: HR Transformation: Progress Made But the Journey Continues

HR TransformationIPMA-HR study found that organizations are measuring transformation success by:

Higher customer satisfaction (only 37% conduct internal customer satisfaction surveys)Cost reductionsHigher retention

Page 22: HR Transformation: Progress Made But the Journey Continues

IPMA-HR ModelTo 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 ExpertBusiness PartnerChange AgentLeadership

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

Page 23: HR Transformation: Progress Made But the Journey Continues

IPMA-HR MODEL

HR Expert

Business Partner

ChangeAgent

Leadership

Page 24: HR Transformation: Progress Made But the Journey Continues

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.”

Page 25: HR Transformation: Progress Made But the Journey Continues

ConclusionHR is moving in the right direction, although more needs to be accomplishedOrganizations are at different stages of transformationHR profession needs to continue evolving & focusing on important contributions it can make to the organizationNo simple answer nor is there a one-size-fits all approach that will work across organizationsHR needs to develop better measures of its effectiveness & impact

Page 26: HR Transformation: Progress Made But the Journey Continues

Additional InformationFor additional information, please contact:

Neil ReichenbergExecutive [email protected]