There is evidence that human resources is finally earning a seat in the C-suite in some companies. Yet far too many HR departments, even those that have reached the top, remain stuck in the habit of acting as a support function, focusing too much on day-to-day administration, with little ability to think strategically and less permission from the business to do so.
The problem is no secret to HR leaders. A survey conducted by the Center for Effective Organizations at the University of Southern California reveals that HR professionals see a yawning gap between what they believe HR’s role should be and what it actually is. But they don’t necessarily have the time or encouragement to do anything about it.
Even companies that establish the position of chief human resources officer may be paying only lip service to the idea that people are their most valuable asset. It’s up to HR to maximize employees’ worth and, by extension, HR’s own worth. Simply having representation at the C-level isn’t enough to do that.
To leverage its seat at the top table, HR needs to tackle the bad habits that keep it thinking small. Here’s where to start.
Thinking short term
Karie Willyerd, SVP of Learning and Social Adoption for SuccessFactors, an SAP Company
Many HR organizations get so wrapped up in immediate needs that they fail to plan for the future. I believe that every HR department with more than 30 people should have at least one person focused on workforce planning and analytics. Yet it’s not uncommon to see in companies with more than 1,000 HR staffers that not one of them is responsible for analysis and planning.
You wouldn’t run a business without a vision of where you’re headed, and you shouldn’t run HR like that, either. To get ahead of things, HR must manage some important changes:
- Have a succession plan for the Boomers. If your company’s IT department is 80% baby boomers, what is HR going to do when they all retire at once and the company has to replace all its legacy systems because colleges no longer teach COBOL?
- Accommodate new work habits. The newest members of the workforce are increasingly diverse, insistent on flexibility, wedded to personal technology, and used to working in a more collaborative, freewheeling style than many companies are comfortable accommodating.
- Quantify the skills gaps in your company. In a 2013 Accenture survey of U.S. executives at large companies, nearly half (46%) were concerned that their companies will not have the skills they need – not five or ten years down the road but in the next year or two.2
- Maintain a stable corporate culture. The workforce is increasingly reliant on temporary, contract, and contingent workers, which puts companies in the challenging position of trying to maintain a stable corporate culture with a highly transitory workforce. HR must prepare itself to train and develop talent with the full knowledge that the talent might walk out the door tomorrow, only to return again, or not, at some future point.
- Develop data analysis skills. I was SAP’s research lead for a study we did last year with Oxford Economics on the workforce of 2020 and we found that just 39% of companies use quantifiable metrics and benchmarking as part of their workforce development strategy. Only 42% know how to extract meaningful insights from the data available to them.
HR already tracks traditional activity metrics, such as number of people trained, number of forms processed, and benefits used in a given timeframe, but it can go deeper. Data analysis skills will let HR deliver solid strategic insights, such as “We don’t have enough people in the organization with skill Y to meet our needs if we land this big contract. Here are some options for filling that skills gap quickly.”
There’s an old saying: if you’re at the table with me agreeing with everything I say, I don’t need you at the table. HR has to bring a vision, a purpose, a different point of view to the table, or we aren’t making a contribution.
Clinging to old career concepts
David Ludlow, Group Vice President for Line of Business HR at SAP
The 2014 SAP/Oxford Economics study about the workforce of 2020 revealed that a top concern of typical employees is obsolescence. They are afraid they won’t have the necessary skills and abilities to support their employers over the next five years.
Making sure they have a future within your organization is as much your responsibility as theirs. Who else is going to identify what kind of employees you need and how you’re going to develop them?
The career ladder is dead, and good riddance
The old way of helping employees build their future – the logical progression through a series of related positions known as the career ladder – is dead.
Well, good riddance. For one thing, rising through the ranks to management was never for everyone; not everyone wants to be a line manager. What’s more, the traditional career path was always based on where employees started, ignoring alternative career paths where they might excel. And in a world full of positions and possibilities that didn’t even exist a decade or two ago, many employees don’t have any idea where they might excel or what opportunities might be available to them.
Identify the kinds of employees you need and how to develop them
HR’s new approach to career building should involve identifying the kinds of employees the company needs and figuring out how to develop them, combining self-led career management for everyone with targeted development programs for high-potential employees. Here are some ways to do it:
- Make employees aware of what’s available. Offer workshops and mentoring programs that provide awareness and practical help to achieve career goals.
- Create job rotations and fellowships. Establish temporary positions to which employees from other business units can apply for education and experience. This builds cross-organizational knowledge while opening up new career ideas that some employees might have never thought about – and can help increase retention, too.
- Actively prepare people for leadership roles. Instead of promoting people based on seniority, identify behaviors that make good managers and develop programs that prepare people to step into senior positions as they become available.
- Embed learning. This is about building a company culture that supports continuous development and learning at every level.
The world is changing so fast that it’s hard for anybody to keep up, so someone’s career path might not lie in what they are doing now. Instead of mapping a person’s progression on a predetermined career path, HR should encourage employees to see what’s out there and where their talents might be needed.
Confusing training with learning
Sameer Patel, Senior Vice President of Products and Go-To-Market for SAP’s Cloud Collaboration Solutions
Formal training can get expensive. One hour of formal training content costs US$1,390 to create, according to internal SAP research. The American Society of Training and Development sets the price tag even higher at US$1,772 in 2012, a 20% increase from 2011.4
Is that money well spent? Yes and no. Every time we need to improve people’s skills and capabilities, we think we should run out and build a PowerPoint presentation. We forget that there are other ways to learn.
Formal training is unquestionably necessary. But it’s sporadic – an hour-long session here, a two-day conference there – and talent needs to be nurtured and developed continuously.
Start sharing learning in bite-sized chunks
The newest members of the workforce, and the more tech-savvy ones of all ages, are used to learning things in bite-sized chunks, collaborating with peers, and teaching themselves how to do things by watching tutorials on YouTube. The old ways of training don’t work for them. According to the Aberdeen Group, 44% of new hires at bottom-performing organizations are not retained at the one-year point. That drops to 16% of new hires at industry-average organizations, but even industry-leading organizations lose 14% of first-year employees. New hires don’t feel like they’re connected, valued, or part of the team.
Informal learning concepts such as peer-to-peer mentoring, social onboarding, and video-based content sharing are better for engaging people steadily over time. Technology that makes it easier to combine formal and informal training in a structured, managed way also allows HR to tap into expertise across the organization and beyond the organizational chart to engage employees early and often. For example, using enterprise social tools to aggregate collective knowledge and tie in back-end HR systems helps employees find documentation of internal processes, watch training videos, post questions to internal experts, and collaborate on projects. And they can do all this through a single easy-to-search hub.
Find out what people already know and have them share it
If HR can do a better job of finding and understanding what people are good at and have already done, it can take a lot of pressure off formalized training programs. Here are some examples:
- Show, don’t tell. A 90-second video is the fastest, easiest way to show employees the most efficient shelf-stocking technique or the proper way to wear safety equipment.
- Find the best and make them teachers. A hotel chain identified housekeepers who had figured out how to finish cleaning a room two or three minutes faster than average, then turned those staff members into trainers who could share their best practices.
- Go with what (the kids) know. Purposeful gamification techniques help keep employees engaged while ensuring that they meet specific checkpoints and company goals. For example, new hires might earn points by proving, through a game-like application, that they have properly completed each step of the onboarding process.
Being isolated from the business
Kerry Brown, Vice President of Enablement of Learning, SAP Education, and User Adoption for SAP
I ask customers if they know what their potential demographic shift will be in the next five years. Some say yes; many say they’re thinking about it; but many others say they haven’t considered it yet. HR needs to start evolving from tactical to strategic. Here are some important ways to plan ahead:
- Get with the five-year plan. HR should create a proactive, five-year talent-development plan to ensure that it can keep meeting business needs, even as employees with 10 or more years of tenure give way to new hires with training but no experience, experience but no training, or a degree but neither experience nor training. This plan needs to incorporate technology, documentation tools, and reverse mentoring to capture brain drain. It also requires formal processes to help employees respond to performance feedback in ways that align with business goals.
- Create more performance checkpoints. The SAP/Oxford Economics Workforce 2020 study found that high performers and Millennials in particular want feedback on a monthly basis, with clearly stated objectives for improvement. To fulfill this need, HR should create more checkpoints with employees and work with managers to create employee action plans to address feedback.
- Use data to coach the coaches. HR has more data than ever about talent. The more it can leverage that data, the stronger its argument that it is evolving from tactical to strategic and that it deserves the budget to support that evolution. If HR can coach managers in ways to develop their people, it will be more productive and relevant.
Limiting HR’s constituency to full-time employees
Arun Srinivasan, Vice President of Marketing and Strategy for Fieldglass, an SAP Company
Talking about near-future changes in workforce demographics obscures one fundamental shift that’s already well underway: the prodigious increase in contract, freelance, project-based, and temporary employees.
Accenture estimates that contingent workers make up between 20% and 33% of the workforce in the United States alone.6 At large corporations, they may account for as much as half of the workforce. And in some industries, most notably technology, it’s not unusual for contract workers to outnumber full-time staff.
If HR doesn’t take ownership of that population, it can’t provide accurate answers to key questions about who is doing the work, where they are, and how they supplement your full-time workforce. Failing to look at that is the same as passing up opportunities to contribute to business strategy.
Create the opportunity for better planning and fluidity
Including the contract workforce in the overall view of the worker population helps HR better understand where the company is competing for talent and make proactive suggestions about workforce planning. In the short term, this may mean telling the business, “Keep me apprised of your immediate needs and HR will help you find contract workers to fit.” For medium-range or long-term planning, it may involve showing business executives data about the use of external workers that indicates where the in-house skills pool needs to be bolstered.
The challenge facing HR today is how to be an enabler for the business. You’re not there just to automate the human resources function; you’re there to manage talent more effectively and competitively. A more holistic view of the worker population puts the company in a better position to plan for fluctuating needs.
The future of HR
The business world has changed dramatically in the last 30 years, and HR needs to catch up to it by offering agile HR processes for the agile business. If you’re drowning in administration, you need to understand the true root of the cause. It could be technology, but it could be the process itself.
However, automation isn’t a magic bullet for broken processes. Technology can’t help if the bottleneck in a process is that the work can’t proceed without approval from 10 different managers. To break its bad habits, HR must adapt both its technology and its processes to manage talent more effectively and efficiently. That helps business units become more competitive – which is the key to keeping the place at the strategic table that HR has worked so hard to achieve.
TO LEARN MORE ABOUT HOW HR CAN FREE ITSELF FROM THE TACTICAL MORASS, DOWNLOAD THE FULL REPORT.
The SAP Center for Business Insight program supports the discovery and development of new research-based thinking to address the challenges of business and technology executives.
- John Boudreau, Carrie Gibson, and Ian Ziskin, “What Is the Future of HR?” Workforce, January 5, 2014, http://wwworkforce.com/ articles/20179-what-is-the-future-of-hr
- Accenture 2013 Skills and Employment Trends Survey: Perspectives on Training (Accenture, 2013), http://www.accenture.com/ SiteCollectionDocuments/PDF/Accenture-2013-Skills-And-Employment-Trends-Survey-Perspectives-On-Training.pdf
- Workforce 2020: The Looming Talent Crisis (Oxford Economics, 2014), http://www.successfactors.com/en_us/lp/workforce-2020-insights.html
- Laurie Miller, “ASTD 2013 State of the Industry Report: Workplace Learning Remains a Key Organizational Investment,” Association for Talent Development, November 8, 2013, http://www.astd.org/Publications/Magazines/TD/TD-Archive/2013/11/Workplace-Learning-Remains-a-Key- Organizational-Investment
- Madeline Laurano, Onboarding 2012: The Business of First Impressions (Aberdeen Group, May 2012), http://go.infor.com/microsites/ hcmtrends/Aberdeen_2012_Onboarding_report.pdf
- David Gartside, Yaarit Silverstone, Catherine Farley, and Susan Cantrell, Trends Reshaping the Future of HR: The Rise of the Extended Workforce (Accenture Institute for High Performance, 2013), http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Future-of- HR-Rise-Extended-Workforce.pdf