Answer the questions on strategic HR

Talk to HR’s customers and get their definition of a valuable HR offering.

Ask yourself this.

What are the key challenges facing your organization and what are the implications of these challenges on people management? Can you define how your HR department adds value or measure its effectiveness? Important questions.

If they have never been asked before, then you and your HR function are running the risk of becoming redundant.

In today’s fast-paced, highly competitive environment, organizations are questioning the value of all areas of the business. HR cannot escape this scrutiny.

Does this mean the end of HR? Yes and no.

It means the end of HR as we’ve known it, but it also means that HR can finally free itself from the paperwork and begin to add significantly greater value. It is fundamentally about moving HR up the value chain, from a provider of services to a strategic business partner.

The following discussion outlines a roadmap for transforming HR into a business partner. A function that adds value and is seen as an integral part of the success of the organization.

It raises a number of questions that should make you think about the current value of the HR function at your organization and what it might take to become a strategic business partner.

The big picture

The first step is determining what the organization needs from HR. Begin by learning about the business environment and the strategy for the organization. Talk to the business leaders in different areas of your organization and get the answers to these questions:

•What is the business vision and strategy?

•What are the key drivers for success in your business?

•How are you positioned competitively?

•How are you positioned to deliver on your strategy?

•How do people fit into the equation?

It takes a great deal of thought and effort and most of all, time and energy listening to input from key stakeholders.

But the answers to these questions should provide enough understanding of where the business is going and what are the obstacles to getting there.

The people implications

The business goals dictate the people management needs of the organization.

So once the business strategy is clear, figure out how it will effect the people in the organization and the ways in which HR can solve the people problems that could arise.

At this stage in the process, begin defining what the HR function of the future is going to look like. It is important to talk to HR’s customers and get their definition of a valuable HR offering. Remember, the objective of the new HR organization is to support the business objectives and this starts with listening to customers’ needs.

Therefore the vision for the HR department may change many times as input on the HR value proposition is collected from senior executives and key managers.

But the value proposition will be the foundation for reshaping the HR function and will be defined not only by the services that HR offers, but how they can assist other people in the organization.

The table provides a framework to guide thinking about the services offered by HR and determine which ones are critical to the organization.

By understanding the services that will support the business objectives it becomes easier to determine where the energy and resources within HR should be allocated.

Consider the services currently offered. Which ones would be considered strategic? Now think about where you currently spend most of your resources. Is it on the strategic service offerings?


HR effectiveness

Once there is a vision for where HR has to be, analyze the current activities and effectiveness of the HR function against it. This stage involves the input of executives and management again, but also requires the feedback of employees. The best way to assess HR effectiveness is to talk to as many customers as possible.

That means interviewing executives and conducting focus groups and employee surveys to get as much input as possible from those people who are touched by what HR does. This assessment of HR effectiveness should involve:



•services and delivery;

•mechanisms to measure effectiveness; and

•efficiency in providing what management and employees expect from HR.

The input provided around each of these elements can then be used to revisit the initial sketch of what the future HR function will look like. At the same time, conduct an analysis of what it is costing to run the department.

This will help to determine the cost/value relationship for each service and will be invaluable in determining which gaps — between current and required effectiveness — should be given priority.

Implement changes

Now that the vision of the future HR function has been finalized and you know what the priority areas are, begin to implement the changes.

Implementation will involve exploring the implications of the change on the HR department itself. Consider these questions:

•What are the skill sets needed in HR to deliver on the value proposition?

•Do these skill sets currently reside in HR? If not, what is the action plan for filling the skill gaps?

•How am I going to address the skill sets that I currently have, but that do not fit with the new HR?

•What service offerings do I need to add, leave alone or stop offering?

•How will the service offerings be delivered?

•How can technology be used to improve efficiency and effectiveness?

•How can technology be used to empower managers and employees to make their own decisions?

•Which offerings will best be delivered from an outside vendor? and

•What is the process that will be used to choose vendors?

The answers to these questions will help determine how the HR department will deliver on its value proposition.

There are right and wrong answers to these questions for each organization. But the answers need to be driven from the value proposition and the assessment of what the strategic services are. The answers to these questions will help to provide you with a clear understanding of what the next steps are in the change process.

Finally, although this article does not touch on the issue of metrics, it is important to remember that the change process described above will not be complete without the proper measures in place to assess HR’s value contribution.

Determining the right metrics is a lengthy discussion all on its own.

The evolution to HR as a strategic partner requires a high level of commitment from the organization. It requires HR to understand what the key business priorities are and the implications on people management, followed by an in-depth analysis of the current level of effectiveness.

Only when the future vision of HR is clearly articulated and the gaps identified, can the process of implementation begin.

Samantha J. Chadwick is a consultant with the Toronto office of Sibson and Company, specializing in a wide range of topics including reward strategy, executive, management and broad-based compensation program design and work process analysis. She can be reached at (416) 542-2409.

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