There is growing realization that HR must be a full participant in creating value through talent. To achieve this goal, HR professionals must work closely with organizational leaders to create an operating model and culture that enables maximizing value.
The Human Resources function is transforming in many ways. Though there is currently a strong focus on the HR digital transformation, technology alone is not enough to ensure full value related to talent. HR has a much larger role as a partner in an organization’s transformation to an agile business, through both redesign of the operating model and the co-creation of a supportive culture. Talent, business model, and culture need full integration for competitive success. Traditionally, HR has operated more like a compliance and data management function, but today they should become a business partner with leaders, to create a talent process that supports an agile organization. The larger role extends to developing an operating model that drives a quality employee experience and prepares the workforce for the future of work, creating a culture of diversity and inclusion that promotes creativity and innovation.
HR BECOMES TRULY PEOPLE-CENTERED
Mercer has developed several programs designed to help the Human Resources function transition to what it calls a target interaction model (TIM). It is a people-centered model based on an integrated strategy of creating the desired employee experience and meeting end user needs. Traditional HR functions were designed around meeting HR needs, but this new model looks outward to the needs of people and the organization, and is a good example of the current HR trend. HR has “customers” that include job candidates, employees, the contingent workforce, and organizational leaders. In this model, HR uses a technology platform to influence the experience of each group of customers through people operations, advisory and administration roles, and becomes a leadership partner and people strategy advisor. The functional expertise is developed and applied in the HR customer-facing community of talent acquisition and talent development, and in the enterprise serving community of project portfolio management, compensation and benefits, HR analytics, and diversity, equity & inclusion (DEI).
Mercer says the process starts by HR developing a people-first proposition, first doing an honest evaluation of HR’s current services and user experience in relation to future business and people needs. The next step is unraveling existing processes and moving towards the people-first model, requiring an interaction perspective. An aspect of the Mercer HR model for talent is found in other forward-thinking models – the focus on outcomes and ROI of HR efforts. For example, Bain & Company has the Talent Engine Builder, which is a platform for defining long-term talent needs and placing the “right people in the right roles.” Bain is often recognized as a leading place to work, and it achieves this distinction by customizing a “talent strategy that supports and accelerates” the overall business strategy and by maintaining a “relentless focus on outcomes instead of processes,” viewing and measuring talent in terms of ROI.
According to Ernst & Young research, HR professionals spend approximately 86% of their time on administrative work within HR. For HR to become partners with people leaders, it needs to operate horizontally across the organization instead of operating in a silo. To help organizations thrive, HR must become a true partner in the business and co-own outcomes with other stakeholders. EY Partner Andy Lomas says many HR systems are too codified to help employees adapt to an organization that is more flexible, adaptive, and project-oriented. The new role of HR is to find ways to help businesses better adapt and simplify their structure to better cope with change. For example, “time to fill” is a key HR metric in talent acquisition. In an organization where HR is a partner, the new indicator is the time it takes a hire to reach full proficiency. Value is created by the employee producing earlier in the new role. Making full use of technology is important to connecting with and inspiring employees, and freeing HR to deliver high-level services, i.e. virtual agents, chatbots and on-demand leadership training.
There are four changes needed to create a flexible and effective HR operation, per Gartner. First is to split the Human Resources business partner role into specialized activities. Second, a dynamic pool of HR problem solvers is created. Third, develop next-generation centers of excellence to provide agile support. Fourth, build a robust HR service delivery and operations team. These changes drive an agile HR, and CHROs must choose the right structure to support shifting resources into strategic imperatives. The agile HR removes silos in major workstreams to create space for strategic thinkers, implements a proactive, customer-sensing HR model, and manages work as an investment portfolio rather than an established agenda.
FOCUSING ON PEOPLE-CENTERED OUTCOMES
The various consulting models may be different, but they are all based on the same principles developed through research, executive surveys, and knowledge of future workforce and business needs. HR becomes a business partner that focuses on outcomes. The function works horizontally to develop an agile workforce. Technology is adopted to free up HR time from many administrative duties, so HR professionals can work with organizational leaders on strategic people processes to improve acquisition, hiring, development, and retention of quality diverse talent. HR communicates the organizational culture as people-supporting.
Each organization should ask itself how HR can best support the new demands facing the business in today’s business environment. How can HR help the business achieve strategic goals? There really is no longer a “final destination” such as traditional HR processes were based on, i.e., a compliance system, benefits program, etc. Instead, HR must be an organizational partner in developing and managing a talent process that creates a workforce able to continually evolve. Instead of only concentrating on activities such as payroll, benefits, contingency labor, and traditional KPIs, the HR Chief Operating Officer concentrates on solution integration, Centers of Expertise or Excellence, and change analytics. It is a true challenge to transform the HR function as an operational partner, but the organizations that succeed are more prepared for the future.