To be truly future-ready, HR’s boundaries have to be shattered, so that its skills become embedded in the core competencies of roles across the organisation, especially line managers, who help deliver the full employee experience. Now and for the future the HR director’s primary job is to own and manage that broader capability, including its digital enablers. That means pushing talent management capabilities and responsibilities to other parts of the organisation. Article by Payal Vasudeva, Managing Director – Accenture Strategy & Himanshu Tambe Managing Director, Accenture Consulting.
Shattering HR’s boundaries is more than just an idea or an aspiration. We see it happening already, especially in industries such as high-tech where the workforce is mobile, young and technologic advanced. CHROs at these companies are proactively pursuing interactions and relationships with other areas of the organisation, helping them understand and embrace their talent management responsibilities. Consider the value of pushing HR capabilities into an area such as finance. Although the gap between finance and HR has historically been wide – with CFOs tending to view people primarily as a cost, and CHROs tending to view people as an asset requiring investment – recent trends are bringing the two functions into closer contact. For example, HR and finance need to collaborate on making more complex decisions about workforce planning and about creative sourcing channels that can be leveraged to balance cost and performance. Bringing HR perspectives into finance can have wide-ranging positive effects on the business. In the words of retailer Wawa’s CFO, Cathy Pulos – who previously headed HR for the company – “once you add the human dynamic, you think about every situation a bit differently”.
The boundaries being shattered by HR are also those traditionally separating a company from external people and organisations. For example, insights about customers’ experiences and needs. That attracting, developing and retaining talent is solely the job of HR is very much the traditional view. But it’s no longer equal to the challenges of today’s workers and organisations – nor to the future of work itself. HR is more than a function. It is also a distinctive capability embedded throughout the organisation. Drawing new ideas from other business functions to drive innovation; and integrating enterprise-wide touchpoints to deliver a seamless employee experience. Where we see organisations doing that, the results are often stronger employee engagement and loyalty, improved resource forecasting and planning, reduced cycle times, a consistently business-relevant HR capability, and value driven to the bottom line of the organisation. HR is also increasingly managing an extended workforce – contractors, partners and others who are external to the organisation but are nevertheless part of the essential workforce. Innovations in talent management practices that extend beyond a company’s boundaries are also appearing from a number of organisations.
One of the most important boundary-shattering collaborations HR will have is with corporate strategic planning. Much work is needed here. C-suite executives are often unaware of HR’s contribution to business strategy or believe senior HR people have no involvement in business strategy at all. This needs to change, though how an HR executive works to help develop strategy will differ from company to company. In many organisations, human capital strategy is now carried out by Chief Strategy Officers (CSOs). In other companies, experts in competitive strategy and scenario planning are joining HR teams. When CHROs work in cooperation with CSOs on workforce-related strategic planning, it is easier to align strategy with specific HR areas such as resource forecasting and planning. The interactions between HR and other functions are also a way to generate innovation. For example, looking at HR through the eyes of a marketer – and augmenting HR with the capabilities of marketing – can yield some surprising results. Consider one leading bank that is working with branches and wealth managers to create a more service-oriented culture, making customer service a true market differentiator. Achieving this goal means that the customer value proposition and the employee value proposition have to be in lock step. Along with the Head of Retail Banking, the Chief Marketing Officer (CMO) needs to be involved in defining not only the customer experience, but the employee experience as well. And the CHRO needs to be involved not only in selecting and developing employees that are fit for a service-oriented culture, but also in defining how employees are to deliver on the customer experience. It’s a fascinating blending of HR and the business that has the potential to deliver truly game-changing improvements in business performance.
Building a more strategic alliance with IT is also a critical aspect of the new HR. Indeed, it is digital technology that is enabling talent management to become less of a centralised HR activity and more of an activity embedded in the fabric of everyday business. With the emergence of new HR SaaS solutions, HR professionals are taking more ownership of tasks previously owned by IT. For example, HR power users are responsible for not only defining the HR processes, rules and configuration; they are actually owning the updates of these items within the SaaS solution. Digital will also enable HR to drive innovation through technologies like analytics. Analytics can position HR to move from historical analysis to predictive analysis, forecasting what’s going to happen and what talent levers HR must pull to improve business performance.
According to our CEO Briefing, 41 percent of C-suite executives surveyed believe that difficulty attracting and retaining talent is the greatest risk they will face in the next 12 months.3 To attract and retain top talent more effectively, HR must increasingly develop a consumer orientation – adopting customer service mindsets and approaches for the delivery of employee services as well (for more, see “Consumerised Employee Experiences: The Next Evolution in Shared Services”). This means understanding and coordinating all the employee touchpoints across the enterprise to deliver a seamless experience. One way this is being done is through the integration of HR services with functional shared services for employees including IT, finance, facilities, procurement and more. Such a cross-functional capability can offer integrated, seamless experiences organised around expectations and needs of employees, not around whatever department the employee is with, or which department is providing the services. According to Accenture research, only 6 percent of companies surveyed have created integrated shared services across functions. That means there’s a big opportunity here for companies to create an employee experience that helps attract and retain top talent. At one financial services company, for example, on-boarding activities span traditional HR services, including orientation and training, benefits and payroll management. Also included, however, are broader services such as obtaining a personal computer, building access and, as appropriate, a mobile device.
The organising strategy or operating model will be a key enabler of a redefined HR capability. In general, much more flexible and agile models will be required. At ManpowerGroup, for example, global HR is made up of a small core team of HR professionals that manage virtual centers of excellence composed around specific outcomes. The centers include a variety of people from either inside or outside the business, such as employees or representatives from marketing, finance and other areas. In a boundaryless HR organisation, skillsets of HR professionals must evolve. More fluid skills are necessary to help HR and the entire organisation be more nimble. For example, companies don’t need 50 experts in recruiting but rather 50 solid talent management experts who can shift easily from recruiting to performance management to succession planning projects. As business line professionals across every function and unit grow and develop, a natural part of their capability set has to be talent management. And metrics and accountability need to be established by the organisation, as well as analytics solutions, to make sure performance is in line with expectations. With a new way forward, companies need a new kind of HR strategy, to bring people management capabilities to all parts of their business, and to attract and retain the next generation of talent. Such an HR will shatter its traditional boundaries and become integrated across the organisation, partnering with areas often not seen as relevant to HR at all. But that’s the point: HR is more relevant and important than ever – just in a different way. In fact, as people management becomes embedded within the larger business, the question will be less about what competencies the HR function needs to more effectively attract, develop and retain top talent, and more about how to create world-class HR competencies everywhere an employee experiences a company, its customers and its services.
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