Global HR Transformation

“The definition of HR transformation has evolved out of a number of perceived and real pressures on the HR function. The function is expected to support the business, provide the right direction for the people management strategy and then execute the strategy. It also has to demonstrate an improvement in value, yet at the same time carry out cost-heavy administration.

In response to these challenges, the transformation process that many companies have embarked on involves examining the HR strategy and how it supports the business strategy, and then changing the HR operating model to achieve optimum delivery.”

According to the 2006 Global HR Transformation Study by Mercer Human Resource Consulting, half (50%) of organizations are in the midst of transforming their HR functions, while 12% completed a transformation within the past year and another 10% plan to begin the process within the next year.

HR transformation is the process of recreating or reinventing the HR function with the specific intent of enhancing HR’s contribution to the business.

Technology and service delivery improvements were the focus of the first wave of transformation activity, 5 to 10 years ago, coupled with an expectation that this would enable HR to transition into a more strategic role," says Mike Theaker, principal in Mercer's HR Effectiveness Business. "HR functions are now challenged with delivering against the expectations set--to deliver human capital strategies and initiatives that demonstrate a significant contribution to business operations and the achievement of business goals."

HR leaders reported that their top challenges are: acquiring key talent (43 percent), driving cultural and behavioral change in the organization (40 percent), and building leadership capabilities (40 percent).

Just as HR activities have remained traditional, so has its skill sets. According to Mercer’s survey, 53% of organizations worldwide list skills and competencies of the HR staff as one of the most significant obstacles to enhancing the overall role of the HR function. The capability of line managers to supervise staff and the business’ perception of HR’s value are other leading barriers holding back the development of HR.

“In order for the HR function to move forward with its transformation, organizations must implement a talent strategy that arms HR with a range of skills, especially those that relate to finance and business, so that they can be more effective business partners,” explained Ms. Piercy

Perils of talent crunch

ET reports on the talent crunch at the CEO level in India Inc.

“Few candidates allege that search consultants aren’t being transparent enough, luring them into assignments that were very different from what they were told. “I met a company on a search consultant’s insistence, and they made me an offer I couldn’t refuse. Now I find that my job is half of what I was promised. I told the headhunter, ‘You are just a bloody broker’,” says a stung candidate. But is there an honest broker? “It’s an oxymoron. To what extent you can be an honest broker while you are selling a job — that’s often the deciding factor,”

Some clients allege that headhunters also try and push the candidate’s compensation higher, so they get a higher cut — a headhunter usually receives up to one-third of the annual package, bonus included. Some firms are said to take on a mandate and pocket a first retainer – one third of the annual salary for the position — even when they know they don’t have the expertise and bandwidth to complete a search successfully, says a headhunter: “For some it’s a free for all, grab all you can. Even some of the big firms are indulging in this behaviour.” But for now the hunt is on.

The current market trend clearly indicates that there’s dearth of capable leaders at the top. India Inc. has not been able to keep pace with the growth and develop leaders and adopt succession planning successfully. The fallout is that too few candidates are being chased for various openings. This has also lead to some unfair and unhealthy practices as recruiters are over promising and candidates having multiple offers are bargaining hard, what it means is that higher salaries, higher perks but not necessarily the best fit for the job.

HR competencies and future ahead

HR competencies and its impact on the role performed by HR has been evolving at a very fast pace, the fast pace of business growth has meant that HR function also reinvents and moves from basis transaction oriented role to more meaty and result driven function having tangible impact on business results and facilitating organization growth and talent development .

SHRM article talks about Dave Ulrich, and his associates who have been on a quest to provide the answer to the competencies required for HR professionals. This year, they’ve released an all-new 2007 Human Resource Competency Study (HRCS). The findings and interpretations lay out professional guidance for HR for at least the next few years. The study outlines six future competencies for HR professionals in the days to come.

The six competencies and the elements that make them up offer the outlines of what it takes to be successful. The Credible Activist is respected, admired, listened to and offers a point of view, takes a position and challenges assumptions by:
• Delivering results with integrity.
• Sharing information.
• Building relationships of trust.
• Doing HR with an attitude (taking appropriate risks, providing candid observations, influencing others).

The Cultural Steward recognizes, articulates and helps shape a company’s culture by:
• Facilitating change.
• Crafting culture.
• Valuing culture.
• Personalizing culture (helping employees find meaning in their work, managing work/life balance, encouraging innovation).

The Talent Manager/Organizational Designer masters theory, research and practice in both talent management and organizational design by:
• Ensuring today’s and tomorrow’s talent.
• Developing talent.
• Shaping the organization.
• Fostering communication.
• Designing reward systems.

The Strategy Architect knows how to make the right change happen by:
• Sustaining strategic agility.
• Engaging customers.

The Business Ally contributes to the success of the business by:
• Serving the value chain.
• Interpreting social context.
• Articulating the value proposition.
• Leveraging business technology.

The Operational Executor administers the day-to-day work of managing people inside an organization by:
• Implementing workplace policies.
• Advancing HR technology.

It’s also interesting to see how the role of HR has been facilitating and encouraging the culture of Innovation, productivity and high performing organisationals.Consider this , according to a survey by Human Resource Executive over half (54 percent) of respondents to a survey on "HR's Role in Fostering Innovation" indicated innovation is very important to their businesses' success.

In other areas, the significance of HR in the processes was rated as follows:

* Fostering innovation -- 36 percent indicated a somewhat significant role.
* Training and developing talent -- 49 percent indicated a very significant role.
* Making innovation a part of the performance-management system -- 47 percent indicated a significant role.
* Establishing incentive and reward systems that are tied to innovation -- 44 percent indicated a significant role.
* Communicating successes to management and employees -- 56 percent indicated a very significant role.
* Tying innovation to succession and promotion - 41 percent (the highest percentage) indicated a significant role.

When asked whether the HR leaders in their organizations participate in brainstorming sessions related to business and product innovation, over half (56 percent) of respondents indicated yes, while 39 percent said no and 5 percent of respondents were not sure.

Clearly indicates the significant impact which HR can have on future of business as Innovation is has been driving growth for organizations.

Previous Posts on Innovation.

Future of Innovation

Key to innovation

Focus on Innovation

HR and Nobel Prize

Can HR ever win Nobel Prize? Joseph Rasquinha and Mohammed Zaheer Hussain opine that the problem with HR is that the overdose of irrelevant jargon and a lack of objectivity, measurement and empirical study.

What HR desperately needs is a new body of thought which should be termed quantitative HR.’ This should be independent of what present practitioners and theorists of the subject are doing. Quantitative HR should look to take a leaf out of the Economics’ book and start by incorporating ‘measurement of the residual’ which is a major part of econometrics.

Today, everyone accepts that HR is important. But very fewcompanies actually practice what they preach and put HR people in strategic positions. If Quantitative HR is in place this will happen automatically, as the statistics will show that the HR people have made a difference to the company. Finally, it is people who make a difference to a subject. The Nobel prizes have been given to people. The possibility of larger numbers of people being attracted to HR due to quantitative theories or measurement will be strong. A lot of these people could be from other disciplines (like mathematics) as is happening in economics. This would be the best indication that HR has really arrived on the ‘science’ scene.

It would also be the best chance for HR to become a Nobel prize for the 21 century. Effective ways of measuring these people processes will ensure that these people processes are credible. Logically, we must accept the assumption that one per cent measurement of a situation is better than no measurement at all.

I really didn’t know how to react to this article. I don’t think the authors are aware about the quantitative practices which have been the adopted over the year by HR students and practitioners to bring more objectivity and predictability in HR practices.

I am not sure if we as HR professional have ever considered Nobel prize as a way benchmark for recognition of HR as a body of knowledge and acknowledging its social impact. HR is a discipline has evolved from multiple subjects and efforts to compare it will traditional social sciences may be futile.

The comparison with economics is also inaccurate as it’s a common error which people make while comparing beahvioural and social science. Wiki defines it as “The term behavioural sciences is often confused with the term social sciences. Though these two broad areas are interrelated and study systemic processes of behaviour, they differ on their level of scientific analysis of various dimensions of behaviour.

Behavioural sciences essentially investigate the decision processes and communication strategies within and between organisms in a social system. This involves fields like psychology and social neuroscience, among others. In contrast, Social sciences study the structural-level processes of a social system and its impact on social processes and social organization. They typically include fields like sociology, economics, history, public health, anthropology, and political science.

Also, Behavioural sciences include two broad categories: Neural-Decision sciences and Social-Communication sciences. Decision sciences involves those disciplines primarily dealing with the decision processes and individual functioning used in the survival of organism in a social environment. These include psychology, cognitive organization theory, psychobiology, management science, operations research (not to be confused with business administration) and social neuroscience.

On the other hand, Communication sciences include those fields which study the communication strategies used by organisms and its dynamics between organisms in an environment. These include fields like Anthropology, Organizational behaviour, Organization studies, Sociology and Social networks.

Human Resource as a field of study has evolved from both these aspects of behavioural science and also relies upon statistical and mathematical analysis as much as economics.Herbert Simon who won the Economics Nobel Prize in 1978 for his pioneering research into the decision-making process within economic organizations has also made considerable impact in the field of HR /OB and there’s no way HR can be considered as an independent field of enquiry as it draws its origin to other behavioural and social science.

Offshoring in Reverse

There’s always this great debate on the outsourcing of jobs to India and other Asian countries from US and European countries, but the times are changing and we are seeing the reverse of brain drain as Indian IT companies are hiring more locals in US. The growth of IT industry has truly lead to flattening of global talent marker as well, we now see talents across different nations are being employed by Indian MNC’s. So with the likes of IBM’s and Accenture’s ramping up fast and increasing talent strength at an all time high pace the war for talent also getting interesting.

Business week reports on offshoring in reverse.

In the past, Indian companies almost always transferred Indians to work in the U.S. on temporary visas. But now Infosys and other Indian outfits are hiring aggressively in the U.S. The Indians are recruiting a combination of fresh college grads and experienced vets who have worked at American companies. They're especially active at campus job fairs, and unlike a few years ago students know who these companies are and respect them. In fact, the Indian connection has become an attraction. "I thought this would be a fantastic opportunity, especially because they send you abroad for training," says Brian Oswald, a 23-year-old Rutgers University graduate with a 2006 degree in industrial engineering who joined TCS in February.

The U.S. hiring by the Indians echoes the strategy Japan's auto industry devised after soaring levels of imports sparked political outcry in Washington in December, 2000. "The Indians are doing to the world's IT processes what the Japanese did to manufacturing," says analyst John McCarthy of Forrester Research Inc (FORR). And now, like Japan's carmakers before them, the Indians are becoming major employers in the U.S. as well.

The Right Time to Quit

When do you decide to quit?? Happiness officer shares his interesting experience-

When is it time to quit? It’s a question I keep getting - and no wonder. Leaving a job has become one of life’s biggest decisions. It’s something that may affect every aspect of your life including your finances, your work life, your identity, your family and possibly even your social status and friendships.

It seems most of us tend to stay in bad jobs waaaaay too long. I have talked to any number of people who have told me some variation of “I quit my job last year and my only regret is that I didn’t do it sooner.” However, not a single person has ever told me that “I quit my job last year and it was a huge mistake. I should definitely have stayed on.”this does not mean that it’s always the right decision to quit, but it does show that when in doubt, most of us stay on in bad jobs. Perhaps longer than is good for us.

He gives his top six tips for finding your quitting point:

1. Give up the idea that you can know for sure whether or not it’s time to quit. It’s always going to be a leap.
2. Listen to your intuition. Your gut may know before your mind.
3. Remember what quitting can cost you - but also remember what staying in a bad job can cost you!
4. Remember that the longer you stay in a bad job, the harder it gets to leave.
5. Most people stay too long in bad jobs - mostly because they fear the uncertainty that comes with quitting.
6. Most people, once they’ve quit, find that their situation improves. Maybe not immediately, but certainly after a few months.

This reflects one side of the story; however many times employees realize the virtues of the previous job only after they exit. Many employees may quit for frivolous reasons as well and regret later. Deciding when is the right time to quit needs careful self analysis and planning as well. There’s a dilemma faced by many employees when they have been with the one employee for a considerable period of their career. At times it very difficult for them to decide if they need to quit just for the sake of change or to avoid getting in a comfort zone which may make them vulnerable to change.

Perhaps the catch lies in knowing what you want out of your role and the challenges you seek in your career. It may just be a reality that jobs may not offer you the kind of challenge and enriching experience which you may be looking for in different organizations. In the days to come more and more employees are likely to face this dilemma and question the learning and growth opportunities, careers path, cross functional learning and even working location (from home or flexi timing) which the employers have to offer. One good example could be the high number of graduates who opt for higher studies in management and technical degrees courses after 1-3 years of job experience. Number of initiatives have been taken in this direction by academia and organizations to ensure that employees need not quit in order to pursue higher education but somehow the desired impact of these initiatives are yet to be felt. I think organizations need to find the right mix of these aspects as various career levels and roles to engage employees and tackle attrition.

My Previous Posts on the same topic.

Looking for a change

Why employees Quit

HR Talent and Attrition

HR talent and competency development has been a cause of concern for industry over the past few years and the growing requirement for quality HR professional is evident by the increasing HR attritions numbers over the last few years. It would be really interesting to analyze the HR attrition data of the organizations in India and look at the reasons for high exits. Gautam , Sanjay and Astha have already discussed this alarming trend which is eroding the credibility of HR professionals due to lack of retention plans for HR attritions.

HR as a career option has evolved over the last few years and HR professionals are no more content playing second fiddle as facilitators.Mostly they are continuously struggling to keep pace with the ever growing challenge of managing operational efficiency and contain attrition. Over the years some organizations have been very successful in integrating HR practices as part of their long term business strategy and have even gone to the extent of making HR a profit centre. This has made HR as an attractive career choice and it has become more competitive than ever before. The evolution of HR as a business partner also means that today HR also plays effective role in managing business and ensuring that it’s no more just a cost centre and a maintenance function.

Some organizations have not been able to make the transformation and HR continues to play the role of glorified administrators. Many organizations have failed to respond to the HR paradigm which goes beyond the cliché of generalist vrs the specialist or as Anuradha puts it as push vrs pull role. The challenge lies in finding a more comprehensive and integrated HR roles in organization today.HR career development and learning is also something which needs to be addressed within organizations. Some organizations give HR function the space and support to become the driver of change and strategy execution. Lack of well defined career path with adequate reward and compensation at par with other business functions is also a cause of high attrition in HR. In some organization the specialist and generalist functions lack collaboration approach and always a cause of internal discontent within HR. It’s almost similar to left hand not knowing what right hand is doing or blaming each other in case things don’t work out.

The other possible reason for high HR attrition is the growing need for skilled HR professionals in the country. As this report suggests that the supply-demand gap in the HR industry is overwhelming. The country produces around 5,000 fresh HR professionals every year.

According to industry estimates, the economy is expected to generate 80 million jobs in the next five years. Assuming that the industry needs one HR manager for every 500 people (the ideal ratio being 1:200), there would be a shortfall of more than one lakh professionals in the area.

To bridge the numbers and the competency gap among HR professionals, NHRD along with CII and XLRI has embarked on a unique initiative to identify competencies required for the profession and also help people develop them. NHRD and CII have worked on a framework of competencies required for a HR manager. They have now partnered with XLRI, Jamshedpur, to start a development centre based on the framework. HR professionals will be assessed based on four competency types: functional, behavioural, technical and generic. The development centre will position HR managers at four levels: basic, competent, advanced and expert. The process, however, does not end with the assessment.

Sure we are heading for exciting time ahead ;o)

PS: Posting has been low due to high professional commitments and other pending projects. I was also away on a short holiday trip and you can check out some of the pictures here and here.