By Natasha Dillon, Associate Director, Hay Group
Striving to be the best in all areas of business is without doubt a worthy ambition. But this can create a lack of focus, making it easy to lose sight of those critical activities which will deliver your business goals. Asking your teams to provide a ‘good enough’ service in some areas may seem counter-intuitive when trying to improve business performance. However, being clear on where you can afford to be lean enables you to invest time, money and resources in those areas that will really make a difference.
Take HR as an example. Juggling multiple roles, from delivering transactional services to engaging employees to developing leaders is no easy task for the often under-resourced HR function. Yet there is a lot of negativity about the profession out there – with a persistent consensus amongst business leaders that HR has, so far, fallen short of making a real impact on business performance. And many of those working in the function share the view that HR transformation has failed to deliver on its promises to date. In a Hay Group study of HR professionals, the majority rated the HR practices within their organisation as ‘progressing’ and felt more focus or investment was needed or required across almost all functional areas.
And yet the time is ripe for HR to have a significant impact. Six converging megatrends are reshaping how companies are structured and managed, the jobs people do, their motivations and their perceptions of work. This throws the spotlight firmly on HR, putting it in a unique position to provide vital insights and direction to leaders and support organisations in achieving strategic goals.
To seize this opportunity, HR faces the challenge of managing its own evolution while simultaneously playing a leading role in the transformation of the organisation.
We have developed the HR blueprint to support this journey. A complimentary digital tool, it enables HR professionals to assess where their organisations are currently, and where they need to be in the future, to deliver on business strategy, against core HR practice areas – from engagement and communications to workforce planning to talent management to managing change. By making intentional choices about where to invest, HR can ensure it is fit for purpose and cost-effective today, as well as agile enough to respond to the changing business needs of the future.
In addition, there are a number of other principles we believe can help the HR function to grasp the opportunity the megatrends are presenting:
1. Balancing standardisation and differentiation: because of the complexity arising from rapid globalisation, many organisations are starting to need different levels of HR service across markets and divisions. Additionally, increasing diversity across employee groups is placing more demands for a differentiated service on the function. By starting with a common, minimum standard HR offer and assessing the need for differentiation based on a business case, the function can get the balance right between what should remain standard and where value can truly be added by differentiation.
2. Ensuring the HR operating model is integrated across processes, policies and systems, and putting the right level of governance in place will facilitate flexibility. It will also provide a framework to manage and measure functional performance across the organisation.
3. Similarly, identifying the interdependencies between HR practice areas, and factoring these into day-to-day delivery puts the organisation and employees at the heart of HR delivery rather than focusing on silos. The same integrated approach should also be taken for any HR change programme to maximise the return on investment and facilitate lasting improvements.
4. Finally, building the right HR capability is critical in enabling HR to respond to the challenges presented by the megatrends. HR now needs an unprecedented level of analytical capability and business acumen as well as the boldness and professional confidence required to be able to deliver a higher-value service.
Regardless of an organisation’s size or maturity, there are opportunities for HR to deliver business value. By applying the principles above and investing in those areas that will truly help the business to achieve its goals, the HR function can play a leading role in helping organisations to navigate the challenges ahead. In doing so, it can place itself firmly at the centre of the business revolution.