Saturday, January 13, 2007

Musings on the Future of Human Resources

Musings on the Future of Human Resources

A couple of days ago, I was talking with an HR regional manager in the Non-alcoholic beverage industry who was bemoaning his difficulties with finding great sales people. Since most sales organizations have been on an expansion spree, it seemed like he would have a vast talent pool of people to hire from. He disagreed, citing that he needed sales folks who have worked in the cyclical, consumer-facing sales industry, who are tough to find. Talk about specialization!

As the role of the HR professionals evolves and complexity creeps in, they frequently struggle with old assumptions and changing contexts, and find that skills they've built up over decades seem to have lost their potency.

In order to succeed, HR professionals need to change their mindset, to soak in new capabilities that transcend typical HR responsibilities and include skills more commonly associated with sales and marketing roles. The traditional "HR as internal service provider" mindset only reinforces the current perception of the limited role of HR. Positioning HR as a business partner is more advantageous but also comes with risks, as at times it requires to push back on clients in order to be successful. While many HR professionals have made the successful transition to truly partnering with internal customers, more often than not it's on an individual basis versus a company-wide process.

Why do HR professionals face such a challenge?

Because the people who are our raison d'etre - prospective employees and hiring managers - are getting more demanding. They demand the best service in the least amount of time. Organizations and senior management want us to contain costs, track metrics regarding employee productivity and morale, and determine how to proceed in order to control the bottom-line (and increase the top-line). They expect us to recruit better people for a lower total cost of hiring; they want their best people to stay put and the bottom ones to leave with a minimum of fuss.

In addition, HR departments can expect to see their administrative work responsibilities diminishing, as employees will soon be able to refer to corporate intranets to find resources to draft their own salary heads, leave structure, and keep abreast of legal trends - all the work that HR typically does today!

How should HR professionals react in such complex, demanding, and ever-changing scenarios? What path must we tread, what roles must we play, and what skills must we gather to excel at all these demands and satisfy them?

HR departments need to restructure, to move from the current functional silos of recruitment, compensation, performance management, training, and employee relations to a new paradigm. HR people no longer can make choices about whether they will be generalists or specialists in organizations: they have to be both.

HR professionals have historically been reluctant adopters of technology. But now is the time to leverage new technologies to focus on our learning curve - with our processes, customers, and employees, and on facing the uncertainty that comes with change.
Both as individual and as organizations, we must always be asking, "What if all the knowledge and skills I hold becomes obsolete tomorrow? What then?" The chasm of change may be a difficult one to cross, but it's going to be an exciting age for lots of HR professionals once we get there.

This also reminds of a recent article I was reading, where a HR head of a company states that the HR plans so well in advance that, they predict the people who would probably leave them in 10-12months time, this also gives them edge on man power planning, the success rate of such prediction is around 70% (as it was printed, and a good number at that), which means HR is not merely acting as a shop where heads can be hired, fired and just kept track of it, its much more than that, I am convinced to believe that such thing can happen only if the HR is partnering business in their endeavor to success, much of the onus for such a partnering lies with HR.

This also brings to my mind that, a 4 layered structure to HR (of Yesterday, Today, Tomorrow and much ahead of it), not sure about the divides here, but an individual opinion as such

Layer 1: CONTRIBUTION: some one who will take care of day to day operations of a business with related to people management, may be right from maintaining personal files, flight bookings, doubts clearance, hotel bookings (I still see some of my HR friends with HR managers tag do such things) and many more mundane jobs

Layer 2: CO-OPERATION: this is a the step I believe where HR gets bit of a teeth and helps business in small business matters and makes their life easy, by organizing things for them, this is also a stage where business sees HR not only as a some one who can do their job but also a guide who can perhaps add value

Layer 3: CONSULTATION: unfortunately HR professionals don’t understand things beyond this step (yours truly is a guilty there) and no offence attached to any, and assume the little inputs here and there asked by business to be consultative stage, where as this is a crucial stage and unless otherwise we are completely equipped to handle, not to press or enter into this zone, this is some thing similar to the area of external consultant, where the HR person will have to diagnose the problem and solution to be achieved in congruence with the business, the level of maturity and understanding of business is equally important here.

Layer 4: COLLABARATION: Hmm, this is the pinnacle of the summit, this also brings me to the question, as to why many HR VPs don’t end up being CEOs of the organization, the reason as I see is lack of understanding of the business, market and customer, which can be achieved if the person makes a conscious effort to understand the things as it unfolds in the business. More the understanding of components of the business better will be the reach of the person. A CEO whom I was recently meeting, told me he values HR inputs in his yearly business planning much more than money as he would expect people to lead him to achieve the targets, which goes to show the impact HR professionals can bring into business.

The time has come to show urgency on HR part to stand up and to be counted as the business driver rather than the just back office that can print papers, distribute sweets on diwali and x mass.

This was just an honest personal opinion, so comments are welcome