What is HR Transformation?March 3rd, 2014
I think we’ve all been there before. Senior Leadership states that “HR isn’t strategic enough,” and the whole HR department springs into action to prove that they are indeed making a strategic contribution. Often times these efforts are focused on re-engineered HR processes, new service delivery models (such as self service), additional automation, and outsourced non-core activities. While there is no doubt these may be good business practices and improve operational excellence, they don’t necessarily facilitate strategic success.
HR, perhaps more than any other part of the business, is constantly challenged to play a more strategic role in the organization, but only in a cost effective (usual translation: cheaper) way, while at the same time continuing to provide a broad array of transactional activities. Balancing the need to contribute at a strategic level with the need for operational excellence is an endless challenge.
So what exactly is HR Transformation? HR Transformation means putting strategy first by identifying the HR outcomes that will facilitate the achievement of business results; and developing the tools and workforce that can execute that strategy.
Studies show that in many organizations, HR and line managers do not see eye to eye on human capital issues and expectations. Key to successful HR Transformation is to ensure that key stakeholders are active participants. This means not only the members of the HR department, but business leaders and line managers. It is critical that they connect to and support their appropriate roles and responsibilities in the process of managing the organization’s human capital.
Starting HR Transformation by defining each and every HR outcome and determining how the outcome contributes to the business provides a mechanism to identify what work is strategic and what is transactional – a critical step in HR Transformation. Until strategic work and operational work are separated, neither gets done well. Until you can identify which HR work has the greatest business impact, you won’t have the clarity and focus required to be a strategic partner. Additionally, HR organizations that don’t do transactional work flawlessly are not credible when they attempt to play strategic roles.
HR Transformational efforts need to look at HR processes as an integrated system. When HR systems work together with a unified strategic focus to achieve the same outcomes, they have substantial impact on business results. To spend time getting better candidates into the recruitment pipeline and not look at selection, hiring, on-boarding, and deployment you probably won’t get the kind of results you are looking for. Even with carefully chosen candidates, ineffective selection, hiring, on-boarding and deployment can lead to high turnover, which drains key talent from the company and eventually diminishes its competitiveness – a critical strategic issue.
So what does it look like when HR has completed is transformation? HR leaders are fully engaged with the business in strategic discussions and decisions. All levels of HR staff understand business issues and needs and apply that knowledge across all aspects of their work. Administrative and recordkeeping activities are efficient. Organizational leaders and line managers play their part in managing the organization’s human capital effectively.
HR Transformation isn’t easy and doesn’t come overnight. Before you embark on a HR Transformation process start with leadership and make sure you spend the time to clearly understand what it means to them for HR to be “more strategic.”