Ready for 2015?

No, not the next general election: the year. And yes, HR: we’re talking about you again. The steady drip of ‘anti-HR’ articles and the negative press is no doubt extremely tiresome, but to tackle this sensation, organisational needs must trump feelings of victimisation. And if there’s the perception of a dark grey cloud, there is also a silver lining. As Marc Coleman, founder and Managing Director of the Pan European HR Network, blogged in 2011 in a piece titled Most Important Function of the Future = HR:

The importance of talent management helps bring HR closer to the CEO.  CFO asks his CEO, “What happens if we invest in developing our people and then they leave the company?” CEO answers, ‘What happens if we don’t, and they stay?”

But as the Boston Consulting Group report, The Future of HR in Europe: Key Challenges Through 2015, pointed out back in 2007, the five key challenges that it identified:

Aren’t just the capabilities that executives expect to be the most important in managing human capital during the period 2010-2015. They are also the capabilities that executives told us that their companies were currently weakest in – and this needed to focus their efforts on improving. In short, European companies stand to gain the most if they can master these five HR challenges; they also have the most ground to cover in these capabilities.”

Those five capabilities?

  1. Managing talent
  2. Managing demographics
  3. Becoming a learning organisation
  4. Managing work-life balance
  5. Managing change and cultural transformation

It’s interesting to find snippet updates on progress – at least in the UK – in later reports against some of the BCG Report’s recommendations. For example, BCG highlighted the potential benefits of job rotations as a key route towards becoming a learning organisation, yet PwC’s 16th Annual Global CEO Survey found that only 51% of UK respondents do so, trailing France, Germany and the US – a position that UK also occupied comparing the use of ‘Encouraging global mobility and international experience’

In 2007, BCG anticipated another significant change: “the number of change-management officers expected to rise by nearly 200 percent among responding companies”. While the job-title is certainly increasingly in circulation, the job description and the recruitment process may be more variable and less happy. Consider the example discovered on a web-forum, where a skilled project manager – a very different discipline – was finding themselves expected to fulfil this role. As one forum respondent pointed out (and the implications they draw are also worth noting:

Change Management is actually a skill learned over time like project management and it surprises me that a company who has identified they need it is then not going to use an experienced person to implement it. The mind truly boggles.

But therein lies a clue. The company wants to change because something is lacking/not working. But they want a new employee with no CM experience to take their company to a new/next level through CM. How bizarre is that?! Which tells me they try to get by on the cheap/cut corners and this is likely the root cause of why they now need CM. 

They need to find the budget to bring in an experienced person if they really believe they need change management implementing.”

Worklife balance is more complex as an issue, and the BCG report emphasises offering ‘accommodations’ mostly in terms of attractiveness for attracting recruitment candidates. Figures in the BIS Fourth Work-Life Balance Employee Survey (July 2012) show that while 41% of interviewees considered flexible working options to be important or very important at the time of deciding whether or not to accept a particular job, at the time of interview this figure had risen to 57%. Flexibility is not a fixed desire: flexibility also needs to accommodate changes in other calls on human lives (as breakdowns of these figures for parents and carers reveal). This raises a more complex issue for HR, in that the issue becomes one where the required (or, from employees’ point of view, desirable) response will change over time: the EVP is not just a recruitment promise, it needs to be an on-going deal.

But if we look at the first item on BCG’s list, the words of PwC– some six years – should sound an alarm bell, and not only in the HR functions’ offices:

When asked if they planned to change their business strategy in the near future in response to these business threats, 77% of CEOs said they planned to alter their approach to talent management and 23% were planning a significant change. This was the case, with relatively little variation, across all geographies and industries.

But this isn’t new. In fact, Talent management has been identified as the main target for strategic change in every CEO survey over the past six years. While it’s heartening that talent strategy is high on the list of CEOs’ priorities, there’s clearly something wrong in its execution.”

If HR needs to get the simple point that “it’s the bottom-line, stupid”, a more recent BCG report (From Capability to Profitability, July 2012 – free registration required for download) shows statistical links between 22 HR practices and increased revenue and profit. Interestingly, some of the issues it highlighted back in 2007 do not rank highly amongst these 22: Managing worklife balance and Managing an ageing workforce occupy the bottom two positions in the table, although both yield improved profits, and one of HR’s own biggest ambitions – Transforming HR into a strategic partner – comes in 17th. Perhaps this should be seen as a by-product of success rather than a primary aim? Even managing change and cultural transformation ranks only 12th.

The ‘big wins’ from a business perspective appear to be:

Topic

Revenue Growth

Profit Growth

Delivering on recruiting

3.5x

2.0x

Onboarding of new hires and retention

2.5x

1.9x

Managing talent

2.2x

2.1x

Improving employer branding

2.4x

1.8x

Performance management and rewards

2.1x

2.0x

Developing leadership

2.1x

1.8x

In HR’s defence, the list is determined partly by which list 22 factors are taken into account, and which aspects of organisational sustainability are deemed as falling within – or without – HR’s remit.

But for HR’s sake – and more importantly, for everyone else’s sake – these figures do strongly suggest that HR should not be the only people who look forward to the days when the likes of Marc Chapman stop writing (and then linking back to) articles with titles like HR=Hardly Relevant. If we’re not all going to be spending 2015 re-skilling on an independent, self-financing basis, we’re going to need pro-active HR functions who want everyone to be ready for 2015. Changing the schedules and re-running 2007 is not an option.

 

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