strategic Building business performance. Here Hay Group unveils the six key your organisation s needs both today and in the future.

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1 The stubborn gap: losing the gap between companies and employees tolerance for risk strategic Building HR Given the increasing executive focus on human capital, HR has an unprecedented opportunity to position itself as a true strategic partner to the business. Yet very little tangible, pragmatic advice business performance. Here Hay Group unveils the six key your organisation s needs both today and in the future Hay Group. All rights reserved 1

2 Human capital management is becoming increasingly important to organisations, an increasing number of executives are citing human capital how best to develop, engage, manage, and retain talent 1 as their biggest challenge to driving business performance. the many and varied challenges of operating in an increasingly complex, fast paced and volatile business environment, the function is uniquely positioned to support the business in achieving strategic goals. In particular, HR has the potential to provide vital insights and direction to leaders on organisational and employee However, a general consensus persists among business leaders that the HR profession has so far fallen short of making a real impact. And recent Hay Group research indicates that almost two thirds of HR professionals agree. 2 Six key requirements for building strategic HR Working in partnership with our clients, we identify how HR can align to business strategy and then develop robust workforce plans to drive performance through people. We also help to identify the right things to focus on lean and where practices need to be cutting edge to deliver the strategy. We recognise too, that one size does not necessarily work with them to. We then help to evaluate how the function currently works and what may need to change to develop an integrated HR operating model. Next, we develop pragmatic, sustainable implementation plans for both discrete, stand alone solutions and large scale transformation programmes. Finally, using our expert knowledge of HR, we help our clients build the HR capability required to strategic partner. 1 Aligning to the business 6 Building HR capability 2 Focusing on the right things How to build strategic HR 5 Pragmatic, sustainable implementation 3 Balancing standardisation 4 reating an integrated HR operating model 1 The onference Board EO hallenge, Next Generation HR, Hay Group, Hay Group. All rights reserved 2

3 The stubborn gap: losing the gap between companies and employees tolerance for risk 1 Align to the business strategy To really add value at board level, HR professionals must understand and leverage the linkages between strategy, people and work. And that begins by asking the right questions like what are the organisation s human capital requirements etermining the answer requires a solid understanding of the business, as well as the impact of a number of external factors on the organisation s human capital needs. These include economic conditions, competitor activity, industry and market trends, regulation and advances in technology. This understanding must then be translated into robust of people, with the right skills, in the right place, at the right level and at the right cost. 2 Focus on the right things 3 Understanding where there is a requirement for basic versus cutting edge HR practice and service is critical to becoming a strategic partner. Exploring what lean HR could look like, and then identifying where additional resource should be focused to deliver the strategy, enables the function to have a commercial conversation around the value it adds and its return on investment. It also maintains focus on those key services which are essential to the organisation s future. The dominant focus on functional standardisation over recent years has failed to meet business needs, leading to shadow resources and creeping costs. The reality in today s increasingly complex business environment is that some level of by business segment, market, region or employee group. By standardised global practices and by understanding the HR can play a critical role in developing organisational agility at the right price. 4 reate an integrated HR operating model Thinking about how the function works and creating an future, is critical to delivering short and long term functional value. This means translating HR activity into detailed processes and policy, delivered by the right number and level of capable people, in the right structure and location, supported by the right data and technology. It also means putting the right governance and performance management in place to ensure focused delivery, and designing for scalability in line with changing business requirements. 5 Ensure pragmatic, sustainable implementation elivering pragmatically and sustainably means acceptance of constant change, and recognition that adapting quickly is key to organisational agility and competitive advantage. This of discrete, stand alone solutions, and understanding the interdependencies across key HR activities and processes for larger scale programmes to maximise value. 6 Build HR capability and agile HR team. By developing HR professionals who have the necessary skills to understand the business environment, translate the organisation s strategy into human capital function can have real strategic impact. ase study: transforming HR to deliver The arrival of a new EO at this blue chip manufacturing company heralded sweeping change. Previously highly centralised, the company was to move to a more agile, service-minded approach with a focus on emerging markets, and HR had to transform accordingly. rawing on interviews and workshops with HR employees, leaders and stakeholders, we worked closely with the chief HR 2013 Hay Group. All rights reserved 3

4 How fit for purpose are your HR services? Understanding where there is a requirement for basic versus cutting edge HR service can be a true source of competitive advantage in delivering an organisation s human capital requirements. Very few organisations need to be cutting edge across the board, and making an investment decision informed by factors such as the business environment, level of organisational maturity and industry issues enables the function to maximise the return on investment of functional spend. Use our diagnostic below to assess where you are currently, and where you need to be, for each key HR service. urrent state: where you are now esired state: where you need to be Attraction, recruitment and retention Resourcing and workforce planning Performance management and reward Learning and development Basic No clear employer brand. Ad hoc hiring. Limited assessment. Limited retention. Focus on reacting to short term supply pressures for today s skills and capabilities. Ad hoc use of contingent workers. Focus is heavily on base pay. limited choice. Ad hoc skills and class room based training exists for induction. Some employer brand Basic workforce analytics to meet local need. Established performance management cycle. Blend of learning and development approaches. Established recruitment. Varied assessment. Basic data on employee skills and capabilities. Some variable pay behavioural competencies. Progressing Ad hoc retention. Advanced Strong brand. Targeted employer campaigns. Rigorous selection on Formal retention practices in place. Workforce planning integrated into business planning and performance management. eveloping alumni and contingent workforce. Performance culture. at all levels. Some visibility of impact of performance. Academy approach. lear linkages between competencies, career paths, and learning and development. utting edge Mature brand with clear employee value proposition. Global recruitment strategy linked to workforce plans. Preventative retention for stars and key roles. Integrated, global plans for transforming workforce capabilities in line with strategy. Sophisticated and proactive alumni and contingent workforce management. lear link between strategy, performance and reward. Total reward is branded and a key part of employee value proposition. Learning organisation with segmented, blended learning. Formally integrated with performance and talent management Hay Group. All rights reserved 4

5 The stubborn gap: losing the gap between companies and employees tolerance for risk in line with the organisation s strategy and culture. urrent state: where you are now esired state: where you need to be Talent management Employee relations, communications and engagement Managing change Managing employee data Basic No formal succession planning other than at board level. No high potential programmes. Promotions managed locally. Employee relations focus on grievance and disciplinary proceedings and trade union activity if required. Local, basic policies. Ad hoc communications and basic employee engagement. Ad hoc, reactive approach to change management. Limited change management toolkit. Employee data managed locally. ombination of paper and electronic media. Progressing Local succession planning, and development. Formal, calibrated promotion process. eep specialist capability in employee relations. Range of local policies. oordinated communications and engagement. eveloping change management capability. HR own or contribute to people related workstreams. Accurate employee data managed via local system or application. Employee engagement measured by periodic survey. Advanced Formal succession planning for key leadership, technical and professional roles. Global high potential programme. Employee relations understood in a global context. oordinated and segmented multimedia communications. lear engagement strategy. management practices exist. Full range of human capital implications including organisation design incorporated into change management approach. Basic employee data integrated globally, supported by standard data dictionary. eveloping capability in data analytics. Annual survey analysed and translated into action. utting edge Integrated, global succession plan for all key leadership, technical and professional roles. Formal managed moves process in place for development. Proactive employee relations for managing culturally diverse and mobile workforce. People related operational, legal and regulatory risks fully integrated into risk management. Impact of communications and level of engagement, enablement and productivity are measured. hange management integrated into business scenario planning to enable agility. Optimised organisation design with clarity on implications for all roles. Use of accelerated change environments. Global employee data management with one source of truth, incorporating performance management, reward, talent, learning and development. Use of sophisticated algorithms to predict workforce trends Hay Group. All rights reserved 5

6 Why Hay Group? We know HR We are experts in HR practice because it is our daily business. Every day, HR professionals in 70 per cent of the FORTUNE 200 rely on Hay Group s proven tools to get the job done. models and we condu ct ongoing research into the priorities and challenges facing HR prof essionals in today s business world. We are global yet local We understand how important it is to balance the We have proven international project management credentials through numerous large scale, global projects that cross boundaries and business units. Unparalleled data and analytics Our advice is underpinned by the richest and mos t comprehensive global databases and we have world-class workforce analytics based on decades of job and workforce research. We have analysed and assessed workforces in every major industry and sector. Business impact Because we develop solutions from a business results perspective, we are able to make tangible links that demonstrate value through meaningful measures such ontact us If you would like to discuss building strategic HR in more detail, please contact: algary Nick Bishop e nick.bishop@haygroup.com t Regina, Saskatoon & Winnipeg Brent Pederson e brent.pederson@haygroup.com t Edmonton Mathé Grenier e mathe.grenier@haygroup.com t Vancouver Rachel O onnor e rachel.o connor@haygroup.com t About Hay Group Hay G leaders to transform strategy into reality. We develop talent, organise best. Our focus is on making change happen and helping people and organisations realise their potential. insight is supported by robust data from over 125 countries. Our clients