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Transforming HR: Global Trends and Emerging Practices
Lecture 2
ITU Regional Workshop on “Strategic HR Management”
Cairo Egypt 13 -17 April 2008
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HR as Change ManagerHR as Change Manager
HR as change agent in close cooperation (being a part of the solution and not the problem)
Identifying behaviors and values that support change in line with new corporate goals and challenges meeting market and owners requirement
Motivate, Implementing new rules and procedures that reinforce and reward desired behaviors
Implementing effective communication strategies to influence acceptance of change, and build a new culture in the organisation
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HR as Change ManagerHR as Change Manager
Driving Cultural and Behavioral Change in the organisation was found to be the second Top HR Challenge by respondents to a Mercer Survey
HR is responsible for creating an environment where people want to come to work, contribute while they are there, and stay long enough to make a difference.
The Challenge for organisations, be they commercial, or regulatory, is to become an employer of choice. Establishing an Employer of choice Status is HR’s responsibility. Implementing new rules and procedures that reinforce and reward desired behaviors
HR must help create a Corporate culture that is the dramatic force behind being employer of choice.
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Discuss Successful ChangeDiscuss Successful Change
What are the desired behaviours What demands to become the
employer of choice How to combine these
Exemplify
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CommunicationMake sure that your line managers think
effectivecommunication.
SuccessionPlanningBuild yourleadershippipeline.
DiversityMove your
organizationbeyond “intellectual
diversity.”
MeasurementFocus on meaningful
MeasuresKPI.
PRIORITIES FOR HR EXECUTIVES OVER THE NEXT
YEARS
Capacity buildingEnsure your
organizationalcapacity exceeds
therate of change.
LeadershipRedefine
leadership,and demand it ofevery employee.
EmploymentBranding
Create a brand foryour organization inthe labour market.
EmployeeInvolvement
Capture a biggerportion of the
employeemindshare.
Role of Role of Strategic HRStrategic HR
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The Mercer Transformation Study, 2006
How HR sees itself vis a vis the business
Organizations seeing HR as a source of value to the business
84%
Organizations with HR strategy linked to long term business objectives
58%
HR consider itself strategic partner to the business
67%
HR have active input to the board, mainly on talent and leadership issues
94%
HR directors report to CEO 62%
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The Top Human Capital ChallengesThe Top Human Capital Challenges
Acquiring + Retaining Key Talent 60%
Driving Cultural + Behavioral Change in the Organization
44%
Building Leadership Capability 30%
Increasing Line Manager Capability to handle people Management Responsibilities
21%
% ofParticipants
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The Top Human Capital ChallengesThe Top Human Capital Challenges
% ofParticipants
Placing constraints On headcount (“making do with less”)
19%
Implementing People Changes resulting from changes due to operational performance
19%
Implementing Succession Planning 13%
Reducing Overall Human Capital Costs
11%
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The Top Three HR Challenges, show that transformation is clearly on the Agenda of HR Executives in Europe
The Top Human Capital ChallengesThe Top Human Capital Challenges
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New challenges for HRNew challenges for HR
Challenge
Increasing workforce productivity
Constraints on Headcount
Encouraging organisational innovation
Implementing people changes resulting from changes due to operational performance
Response
22%
20%
18%
18%
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New challenges for HRNew challenges for HR
Challenge
Measuring human capital contribution to business performance
Response
17%
Lack of consensus around the Organizations strategy/direction
16%
Reducing overall human capital costs 16%
Resourcing and managing HR issues in a new geographies for the company
15%
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New challenges for HRNew challenges for HR
Challenge
Managing human capital during and after an acquisition or merger
Workforce planning
Increasing the return on investment in remuneration
Coping with aging workforce
Response
15%
14%
14%
12%
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ObservationObservation
The major challenges for HR are evidently linked to transformational issues and human capital strategy
Matters of processes, technology and administration are becoming less and less of a challenge to HR
The verdict? HR is moving up the business value chain
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What HR functions will matterWhat HR functions will matter in the future? in the future?
Function
Human Capital strategy
Today
40%
2-3 yrs
64% ↑
Talent Management 49% 55% ↑
Change Management 42% 38% ↓
Leadership Development 49% 52% ↑
Organization Design
Organization Development
21%
35%
18%
40%
↓
↑
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What HR functions will matterWhat HR functions will matter in the future? in the future?
Operational excellence within the HR Function
Today
46%
2-3 yrs
32% ↓
Workforce Planning 31% 24% ↓
Succession Planning 24% 27% ↑
Industrial Relations 32% 19% ↓
Risk Management 18% 17% ↓
Function
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Primary Drivers Of HR Primary Drivers Of HR TransformationTransformation
Part of Broader Organization with Transformation Process
38%
Response to Changes in the Organization
27%
Leadership Changes in the HR Function
13%
Company-Wide Cost Reduction mandate
8%
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Primary Drivers Of HR Primary Drivers Of HR TransformationTransformation
HR not adding Value in its existing Role 6%
CEO/business Leader Mandate for Change in the HR and/or other Staff functions
5%
Change in Domestic Market environment and Regulation 1%
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HR as a Strategic PartnerHR as a Strategic Partner
HR is active participant when discussing Business Wide Issues 76%
HR Drives or develops methodologies to drive change in the organization 70%
HR is expected to translate Business Strategy into Human Capital Strategy for the Business
67%
HR is part of Business Operations Planning
63%
% ofParticipants
What Convinces you that HR is a Strategic Partner?
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HR as a Strategic PartnerHR as a Strategic Partner
What Convinces you that HR is a Strategic Partner? % of
Participants
HR brought in early to significant business issues/opportunities 57%
HR is expected to help improve efficient output 56%
HR builds and/or links data sets to provide enhanced decision support 41%
Other 2%
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Role of HRRole of HR
Understanding Business and driving Change are coming up as top Symbols of a partner role for HR.
There is a clear set of Expectations of a different role for HR within the New Environment (include sustainability).
But what exactly does HR do?
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Where does HR spends Where does HR spends ITS Time?ITS Time?
Employee Relations 13%
Staffing 12%
Compensation 11%
Payroll 10%
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Where does HR spends Where does HR spends ITS Time?ITS Time?
Training 10%
Labour/Relations 8%
HRIS/HR Applications 7%
HR Department Management 7%
Organisational Development 6%
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Where does HR spends Where does HR spends ITS Time?ITS Time?
Scaled Time + Attendance 4%
Non-Retirement Benefits 3%
Retirement Benefits 2%
So 40% of HR Time is still spent on Transactional and Compliance related activities, while only 15% time spent on strategic partnering.
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Challenges for HRChallenges for HR
HR still very strong in its traditional functional areas and has adequate Skills here.
The biggest Barrier to HR playing the new role is the Skills Barrier (not business and strategy related).
But needs to acquire a new set of competencies to be able to adequately play the Business partner role.
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New Skills/Competencies New Skills/Competencies RequiredRequired
Ability to Improve Customer Service (care)
Process and Manage Projects (efficiently used)
Technology Deployment (tech change)
Business Understanding (survival-sustainable)
Financial Understanding (Wacc)
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Strong Skills in the HR (History)Strong Skills in the HR (History)
Functional HR Experience 53%
Interpersonal Skills 52%
Interviewing Assessment Skills 49%
Team building Skills ?? 49%
Record Keeping/Data Maintenance 46%
Customer Service CRM ? 41%
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Skills that are weak/very weakSkills that are weak/very weak
Business Strategy Skills 55%
Financial Skills 50%
Cross-functional Expertise (Multi disiplinary skills
48%
Cross Analysis and Measurement(Market analysis)
44%
Organizational Assessment / Job design
43%
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Skills that are weak/very weakSkills that are weak/very weak
Business intelligence data analysis and reporting
43%
Process Management/Process Improvement
39%
Change Management 39%
Project management 38%
Business Understanding 35%
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Where is your organization, is change necessary or not?
Who is your competitor ? Do your staff fear changes ? Why do you have the best knowledge – and
do not need to change ? What is the worst thing that can happen to
your staff Be realistic and honest – values
(transperency)
Critical issuesCritical issues
