By Daniel Hunter
89% of HR departments have been restructured or transformed over the past three years, but just 22% have been reshaped successfully, according to research released by Orion Partners, a management consultancy specialising in HR and talent.
The study, which polled 67 HR leaders and senior professionals at organisations with a combined total of 1.1 million UK employees, reveals the efficiency and effectiveness have HR departments have suffered as a result of the transformations.
43% of senior HR employees say their current department is inefficient, while 27% go further and say it is ineffective. Just over one-third think the reorganisation of their department hasn’t allowed individual teams to play to their strengths, and 37% say the purpose of the function isn’t clearly defined in terms of business objectives.
“Life for HR departments has become harder, leaner and meaner in the aftermath of the financial crisis. Almost nine in ten functions have restructured or reformed since 2010 — the darkest days of the financial crisis — as they try to adapt to seismic changes in the way their organisations work. But it’s been far from a complete success," Jane Chesters, partner at Orion, explained.
"Commercial and business objectives have been recalibrated since the downturn, and many HR departments have failed to evolve in a way where they are able define the business purpose of function. This harms HR in the eyes of the rest of the business. It’s difficult to drive an effective strategy if HR staff don’t understand why they are there in the first place.”
Orion’s research reveals poor use of data has contributed to the lack of success in restructuring HR functions. 71% of senior HR professionals believe decision-making isn’t underpinned by robust analysis of management information. And 54% said there was no mechanisms in place to assess how well different parts of the function perform, suggesting HR departments are poor at evaluating themselves and therefore unable to identify aspects of the function which need improving.
“Trying to restructure the HR function without using data to analyse where improvements and changes need to be made founds the whole process one guess-work and conjecture. It should be based on a solid bed of fact," Jane Chesters commented.
"Too often transformation programmes have been established without really clarifying what kind of service the business needs. This lack of dialogue with the end-user can mean an HR function that is more efficient but which doesn’t meet the needs of its customers.”
Despite the deficiencies in HR departments identified by Orion’s study, the research reveals HR leadership has improved over the past 30 years.
HR leaders are now better at establishing a clear vision for the function based on the commercial needs of the business. 60% of senior HR experts say their current leader does this, but only 56% say their first leader managed to.
And they are better at communicating that vision clearly to the rest of the business. 63% of senior HR employees say their current leader articulates a clear vision. Just 58% say the same thing about the first leader they worked for.
HR leaders now seek input from a wider range of sources than they did 30 years ago. 63% of senior HR professionals say their current leader has developed a vision for the function based on input from a variety of sources. Just 56% say their first leader did the same thing.
“HR leaders are better than they were thirty years ago — there is little doubt about that. The approach they take to shaping and leading their functions has improved considerably over the last few decades. HR leaders are more self-aware then they used to be, and they have helped instil a greater belief in the value of HR — both within their team and the rest of their organisation," Jane Chesters explained.
"They are more commercially-minded, more results driven, and better communicators. The professionalism of the industry has improved leaps and bounds, and HR is much more closely aligned to the business and its commercial objectives than it used to be.
"But there are areas where they can improve further. Over a third of senior HR staff we polled believe their leader has failed to articulate a clear vision for the function. Most HR leaders model the behaviour they expect of others, but around 31% still do not. And around a third of senior HR professionals say their leader isn’t effective in their current role — a worryingly high proportion. The message is clear: progress has been made, but HR leaders can still do better.”
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