The time is ripe for strategic HR (Editorial)

Ethics concerns and a growing recognition of the value of human capital management create opportunities for HR
By John Hobel
|Canadian HR Reporter|Last Updated: 10/20/2006

What’s the future for HR? It’s a question we like to ask a lot here at

Canadian HR Reporter

.

While achieving a higher status for the HR department remains a challenge for most in the profession, ethics concerns and a growing recognition of the value of human capital management are creating opportunities for HR to become a strategic business partner, speakers noted at the Best Practices: Getting Human Resources to the Executive Table conference held in Cobourg, Ont., earlier this month. It’s an annual event organized by the HRPAO chapters of Brockville, Durham, Kingston, Lakeshore, Peterborough and Quinte, and

Canadian HR Reporter

’s parent Carswellbusiness.

Moving from a transactional cost centre to a value-added business partner along with accountants and other department heads is the HR dream. How to get there is always the question.

High cost of ethical misconduct

Chris Bart, a professor specializing in corporate governance at Hamilton’s McMaster University, told attendees the high cost of ethical misconduct — from bankruptcy and criminal charges to loss of corporate reputation, clients and employees — highlighted by the spate of scandals that includes Enron, Nortel, WorldCom, Adelphia Communications, Tyco, Hollinger International and most-recently Hewlett-Packard, has raised the stakes regarding ethics and governance.

HR has a unique opportunity to step up and play the role of ethics watchdog. It means taking a conscience and a big stick into the boardroom. It also means using HR functions such as recruitment and organizational effectiveness to build an ethical platform. Once established, ethical workplaces help their own growth by attracting the type of people you want in charge of your business and your money.

Using ethics in your brand

Margaret Cunningham, a marketing and ethics professor at Queen’s University in Kingston, Ont., has been looking into how ethical workplaces can be branded for both product marketing and employee recruitment and retention. Corporate social responsibility is gaining momentum, as is interest in ethics at business schools, said Cunningham.

If MBAs start taking ethics seriously at school, one can hope there’ll be some improvement in morality in the real world.

Once you’ve got your morals all straightened out, don’t be afraid to profit from your squeaky clean image. There’s revenue from customers drawn by your reputation, and an improved talent pool for HR’s purposes. Enter “employer branding.”

Promoting the firm as a “best” place to work requires HR and marketing to work together. It’s brand recognition that everyone in the organization can tap into. HR and marketing must ensure the message is unified and reflects reality. But beware. Trying to sell an image employees know is a fabrication does more harm than good.

Corporate social responsibility is based on employers adopting a moral code that applies to how they operate in the business world and the workplace, as well as in their communities.

Adopting best practices

So once you’ve pried open the door of the executive boardroom with a plan to save the organization from miscreant employees, and you’ve caught jobseekers’ attention with your preferred-employer image, how does HR push staff engagement and productivity?

The answer is something that’s becoming known as “HR best practices.” We’re generally not big fans of obtrusive business lingo at

Canadian HR Reporter

, but “best practices” is well-suited as a description for the need to adopt successful HR programs, policies and strategies.

After all, if you want a seat at the exec table you’d better have some plans to push. And being the ethical pain in the butt better not be the only thing you’re doing. Your firm needs a strategy to get good people, train, develop and deploy them, motivate them and retain them.

Don Van Meer, president and CEO of Thomson Carswell, and Barb Conway the publishing firm’s vice-president of HR, offered a look at how HR input at the executive level translates into a best practices people strategy. (Was there nepotism involved in selecting Thomson Carswell as a best practices example? You bet. But our parent also earned its way there with HR programs and initiatives that have placed Thomson Carswell on Hewitt’s

50 Best Employers in Canada

list three years in a row.)

Thomson Carswell’s approach to HR includes focusing on a respectful workplace (no bullies allowed). Other parts of the employee proposition include flex hours (it’s what keeps me commuting more than two hours a day across congested Toronto highways) and a competitive pensions and benefits package.

While compensation and work-life balance are “big” issues HR has to address, workplaces can’t forget about the “little” things, like saying “thanks” for the effort, that add to the employment deal.

“Sometimes the small things are the big things,” remarked Van Meer, pointing to ice cream as an example. Thomson Carswell’s 650 staff can look forward to an ice cream truck pulling up outside the office on a hot summer day. It’s a recognition item that brings more positive feedback than almost anything else the firm does, said Van Meer.

How HR can add value

Monica Belcourt, noted author, professor of HR management at Toronto’s York University and past-president of the HRPAO, has long been a promoter of the value HR can add to an organization.

Only 20 per cent of an organization’s book value is based on tangible assets — the remainder lies in its human capital, Belcourt noted. But it’s not just a question of the good employees an organization currently has, it’s about the HR systems that create and maintain a strong employee base, she told conference attendees.

What does the job of HR look like in an organization where strategic HR reigns free? Belcourt offered a glimpse of what HR should be.

HR should support an organization’s goals, help to formulate strategy, build capabilities, ensure culture alignment and develop guiding principles. A senior exec in charge of HR would oversee corporate human resources, HR services and solutions, and the HR staff who act as organizational capability consultants. Other roles include brand manager (see Cunningham above), knowledge facilitator (let’s share what others know), relationship builder and rapid deployment specialist (think SARS or a natural disaster).

How far has your organization advanced along the road to strategic HR? Ask yourself some of the questions in the accompanying

sidebar

.

There may be a lot of work to do, both within organizations and within the HR profession itself, but strategic HR is a recipe for improved competitiveness and productivity.

And where do unions fit into the future? I’d hazard a guess that most HR practitioners would like to say they don’t. But CAW national president Buzz Hargrove’s appearance as the conference’s final speaker serves to remind that unions are still on the scene.

Hargrove told delegates that unions are changing and will recognize when an employer is having economic difficulties and conduct contract negotiations accordingly.

“If we know someone well and believe they have a problem, we’re not going to kick them when they’re down,” said Hargrove. “(Generally) profits are up and that’s okay. I always want to deal with a company that’s making money. We might disagree about how we share the pie, but we’re looking forward to making a bigger one.”

The opportunities to grow HR vary depending on the organization. But for human resources practitioners who pursue best practices and strategic HR, and for the organizations that support human capital management, the future looks promising.


Strategic checklist

Assessing HR’s role

How strategic are you as an HR practitioner? Is your department on the path to being a business partner? Monica Belcourt, professor of HR management at Toronto’s York University, says you should ask yourself the following questions to determine the answer.

Is HR a strategic partner

Are you strategic? Ask yourself the following:

•Do you understand the business?

•What financial indicators are important to the company?

•Who are your customers?

•What is your competitive advantage?

•What major technological changes affect your work?

•Do you know what the corporate plan is?

•Can you quickly list the major initiatives of your company?

•Do you align HR programs with organizational goals?

•Can HR position the organization to succeed?

•Is HR focused on deliverables?

•Does HR report on effectiveness?

•Are major organizational decisions made with your input?

When HR is on the path to being a business partner

What are the signs that an HR department is acting strategically as a business partner? Look for these indications:

•HR does more planning work;

•more organizational design work;

•more career and management development work;

•HRMS is fully integrated;

•when managers use HR to solve operational problems; and

•when rotation in and out of HR is valued.

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