HR Transformation: prizes and challenges. Agenda. HR Transformation. Institute for Employment Studies 1

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1 HR Transformation: prizes and challenges Peter Reilly Director HR Research and Consultancy the institute for employment studies Agenda What is HR transformation? What prizes does it bring? What challenges need to be met? The available solutions HR Transformation the institute for employment studies Institute for Employment Studies 1

2 Dimensions of HR transformation Automation Standardisation Consolidation What s involved in automation Integrated records (and payroll) systems Better MI Information through intranet Self service Stand alone e-systems Document management & work flow What s involved in standardisation Re-engineering processes To exit, transfer & simplify Using best practice to ensure quality and consistency Allowing internal and external benchmarking To obtain standard systems? processes? polices? Institute for Employment Studies 2

3 What s involved in consolidation (and other structural change) Bringing together dispersed activities into single organisation Aim is to share services for common good Focuses on transactional and informational Can allow business embedded HR to flourish independently & specialist expertise to grow Business partners Corporate centre Centres of expertise Shared services Plus New relationships with stakeholders CEO Employees Line Managers New purpose and role New content CSR OD Branding Drivers of transformation Cost reduction Improved service standards More business focus Increased customer sensitivity Greater added value Repositioning function away from administration towards strategy Institute for Employment Studies 3

4 Repositioning HR strategic strategist/integrator contribution adviser/ consultant tactical short administrator/controller time orientation long A corporate example HR focus and capability Shaping, creating impact Functionally effective Process efficient Transaction dominated time General drivers of transformation Cost reduction Improved service standards More business focus Increased customer sensitivity Greater added value Repositioning function away from administration towards strategy (segmenting & balancing transformational & transactional) Following the lead of other functions Institute for Employment Studies 4

5 Specific drivers What drives consolidation, standardisation & automation Strategy structure processes systems Strategic positioning Improve services Cut costs Consistency Financial savings Credibility Benchmarking Cost Commonality Better MI Integration Facilitates devolution The prizes the institute for employment studies So what are the prizes? Within the function: Shift towards valued-added work Institute for Employment Studies 5

6 Activity shift (company example) Original HR After shared services After self service 10% 20% 30% 60% 60% 20% Key: Strategy, administrative, advice and delivery So what are the prizes? Within the function: Shift towards valued added work Improved, faster processes Lower costs Better customer feedback Seen as a valued contributor People management on the map Specific benefits What benefits from consolidation, standardisation & automation Strategy structure processes systems Service quality Service quality Faster service HR repositioning Business focus HR issues more on agenda Deeper expertise Good practice Better benchmarking Cost savings Cost reduction Greater consistency Institute for Employment Studies 6

7 So what are the prizes? Within the function: Shift towards valued added work Improved, faster processes Lower costs Better customer feedback Seen as valued adviser People management on the map For the organisation as a whole Superior performance through people Performance through people Higher productivity Better attendance Lower attrition Better service delivery Higher quality Reduced costs Improved organisational functioning Aligned culture & organisational values The challenges the institute for employment studies Institute for Employment Studies 7

8 Customers not always happy! HR policies good in theory but difficult to implement Business partners need to get out more Is HR up for it, as well as up to it? HR unduly constrains line HR is insufficiently in touch with business Business partners promise the earth because they leave someone else to deliver HR is unresponsive and slow HR quality varies from superb to one wonders how they managed to find their way to work! Challenges with service delivery Problems with Structures Systems Processes What problems faced? Segmentation: boundary management poor communication and learning unclear accountability role ambiguity Service model: over promising, under delivering customer complaints no recognition of customer differences multiple delivery channels service gaps - the Polo problem Institute for Employment Studies 8

9 The polo problem Strategic Operational Administrative Further problems Technology doesn t work as promised self service insufficiently intuitive accusations of dumping by line tail wagging dog over automation of processes Standardisation cultural/customer differences ignored centralisation by another name More challenges HR resistance Customer rejection Change management Distance from employees Failure of devolution to line Institute for Employment Studies 9

10 Inhibitors to devolution Line manager issues HR issues Technology issues priorities disposition training time skills restrictive HR processes lack of role clarity lack of mgt encouragement to devolve reluctance to let go poor employee self-service capability poor manager self-service capability mean scores 0 = not at all 1 = a fair amount 2 = a great deal Source: CIPD research 2007 More challenges Change management HR resistance Customer rejection Distance from employees Failure of devolution to line Getting message accepted of people as assets Being able to prove HR/people management contribution to organisational success Lack of focus on key issues Time v importance (the top 3 activities for HRDs) Activity Area Business strategy Implementing HR policies Developing HR strategy & policy Providing specialist HR input Providing support to line managers Helping employees 9 26 Change management Updating own HR knowledge 5 9 HR administration Perc entage (n=775) most time consuming most important Source: CIPD research 2007 Institute for Employment Studies 10

11 More challenges HR resistance Customer rejection Change management Distance from employees Failure of devolution to line Getting message accepted of people as assets Being able to prove HR/people management contribution to organisational success Lack of focus on key issues HR capability and career development HR capability needs willingness to innovate integrity negotiating skills business knowledge ability to deliver to targets strategic thinking Most important Biggest Challenge leadership skills communication skills understanding HR practices influencing skills Percentage of respondents (n=767) CIPD research 2007 Does HR have the skills? Most frequently listed competencies for successful international HR professionals in CIPD research: Process skills providing information & advice mobilising & engaging balancing Political skills facilitating cultural sensitivity ambiguity tolerance team working Technical skills compensation training resourcing etc. Business skills strategic thinking business understanding Institute for Employment Studies 11

12 or these characteristics? (SHRM 4Cs model) Susan Meisinger The Future of HR Management Is HR up for it? What about personal attributes? like courage Are there performance constraints? Confidence to challenge Motivation to improve Flexibility to adapt Determination to make an impact Resilience Performance = potential interference Traditional career structure Personnel Manager Senior Personnel Officer Graduate recruitment Personnel Officer Personnel Assistant Admin. Recruitment Institute for Employment Studies 12

13 Worst case future HR career map Corporate HR transfers from line management Centres of expertise Business partner external recruitment outsourced Shared service external recruitment How to meet the challenges and overcome the problems the institute for employment studies How do you do this? Build a world class approach to HR Institute for Employment Studies 13

14 Building a world class HR model World Class HR Practice Create value Added value Value for money Aligns & integrates with the business Achieves desired results for the business Gets the basics right I M P A C T Proactively leads the people agenda Facilitates people management Supports people management Sustainable innovation Continuous improvement Customer focus How do you do this? Build world class HR by: Getting the basics right efficient processes and systems Providing the operational support line managers need (not want) Developing a suite of HR policies & practices that enables good people management/drive success A service-driven model Organisational leadership and culture HR policies and practices line management employee behaviours superior performance Institute for Employment Studies 14

15 How do you do this? Build world class HR by: Getting the basics right efficient processes and systems Providing the operational support line managers need (not want) Developing a suite of HR policies & practices that enables good people management/drive success Facilitate managers management of people Offer tools that help them in that role Solve business (not HR) problems focus on business critical issues How do you do this? (2) Develop a Human Capital model and get it accepted by management A broader human capital model Individual capability Development ability: skills, training education access: resourcing recruitment succession attitudes: engagement involvement application: job design autonomy Deployment Organisational action Tamkin et al, 2006, IES Institute for Employment Studies 15

16 How do you do this? (2) Develop a Human Capital model and get it accepted by management Integrate HR and people management activities Build social capital through knowledge sharing, networking and relationships Anticipate change through horizon scanning & internal sensing Prepare the organisation for change and deliver it successfully How do you do this? (3) Determine the optimal service delivery model and make it work What to do with automation & standardisation? Automation Don t assume technology will work as planned Return to human interaction where: efficient sensitive Customise to make systems intuitive Make most of better MI by building analytical skills Standardisation Only standardise where real benefits processes? policies? systems? Maximise freedom for management within limits Exploit advantages of transparency and simplicity Institute for Employment Studies 16

17 What to do with structures/roles? Don t ignore economies of scale but join up the dots plug the holes Design jobs people can do and be clearer in role specification and be more customer sensitive give line more operational support differentiated service offering think of the external client Adjusting the 3 legged stool structure Corporate centre Junior Business Partners Business partners Centres of expertise Shared services Operational execution Case management Assistants Assistants What to do with structures/roles? Don t ignore economies of scale but join up the dots plug the holes Design jobs people can do and be clearer in role specification and be more customer sensitive give line more operational support differentiated service offering think of the external client Innovate in partnership working Institute for Employment Studies 17

18 Consider optimal method of service delivery: options on shared services Integrated service provider In-house cost centre In-house profit centre Wholly owned subsidiary Joint venture Outsourced to third party Ownership and control Sharing solutions Use of same standard processes Shared payroll records Front end sharing Common processes Joint ad hoc solutions Shared back end services Full shared services Shared recruitment advertising Providing specific training Common service & call centre How do you do this? (3) Determine the optimal service delivery model and make it work Build HR capability Institute for Employment Studies 18

19 What to do with skills Reflect HR specific needs in any competency list Tackle disposition Skill up existing HR staff training development Bring in capability Improve career management processes Learn from other functions How do you do this? (3) Determine the optimal service delivery model and make it work Build HR capability Demonstrate HR effectiveness and efficiency operational excellence client service delivery at lowest cost business impact and measure it Clarity over measurement HR efficiency People management efficiency IMPACT HR effectiveness People Management effectiveness OUTCOME Institute for Employment Studies 19

20 To sum up Emphasis on structures and processes necessary but not sufficient basics often better than previously function often more efficient than before Areas of improvement remain capability of HR to deliver added value across a wide range of content getting message accepted of people as assets being able to prove HR and people management contribution For further information contact: peter.reilly@employment-studies.co.uk thank you Institute for Employment Studies 20