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HR/People/Workforce Analytics
The perfect match, HR analytics and strategy

So what would be interesting for HR to investigate in your organisation? Is this the number of regretted leavers, the drivers of absenteeism or engagement, finding the people characteristics of your top performers, or determining how leadership is influencing sales or customer satisfaction? The thing is, whatever you are looking for, it should be of strategic value for your organisation.

It is less about the analytical products, tools or techniques that you are using but more about finding the relevant strategic business question. Of course your ability to find the right answer for a business question increases when your maturity in statistics, data mining, machine learning tools, survey management and strategic workforce management is high. In other words your analytical maturity drives your ability to operationalise your strategy. But if you can answer a business question by creating a simple but effective pivot table and corresponding graph, by all means, please do. So find your best way to have impact on your business strategy by applying analytics, they are a perfect match.

The evolution of HR analytics

Our HR analytics department evolved in the last four years to a point where today analytics and strategy are joined in one HR department. You could say in our case that five aspects evolved over time resulting in where we are today.

1.    The evolution of techniques and tools. Our capabilities to perform statistics or data mining techniques on our data, was the first thing we focussed on. Together with our analytical partner iNostix by Deloitte we established a process to conduct research on our data using techniques from anova, correlation and regression to e.g. decision trees, clustering, multi level analyses and topic detection. Our tool suite evolved from using SAS to R to BigML (machine learning) and we are keen to follow promising tools like Talent Insight by Watson IBM.

2.    The evolution of our analytical product offering. We started off with the statistics but over time we added products like support on KPI setting, strategic workforce management, capability and community building and survey management. The strategic business question at hand will determine which analytical product, or combination of products, we will need to deploy. We are constantly working to improve our analytical product offering. In the next section I will elaborate a little bit more on where we stand on these analytical products within our organisation.

3.    The evolution of our capabilitiesBesides the technical skills (techniques, Infrastructure, tools) we invested in consultancy skills and specifically what we like to call ‘critical thinking’. Our department doubled in size in the last half-year and the new joiners are predominantly consultants, or translators if you will. They sit down with our customer, either a business line or an HR product owner like the head of recruitment, and translate the customer question to one or more of our products. To do this they need to challenge the customer question. Is there evidence for the problem or opportunity? Is there an underlying problem? What is solved or achieved by answering the customer question? For more on critical thinking and evidence based HR, I strongly recommend you to read the work of Rob Briner.

4.    The evolution of positioning the HR analytics departmentWe started our department within what we called HR business management. Our direct colleagues worked on activities like HR data quality, HR reporting and HR infrastructure. Not necessarily a bad place to be in. The mutual thing we had in common was data. In year three of our journey we moved to Reward and Performance Management. The simple practical reason for this was to understand and use more of our remuneration data within our research. But since half a year we are part of the department HR strategy, analytics and change. Personally I think this is the best place to be for an analytical department. To understand strategy, to operationalize strategy or to evaluate strategy you need analytics. In other words analytics provides answers to strategic questions. Again, that is why they are a perfect match.

5.    The evolution of analytical leadership. We were always lucky to work in an organisation where they embrace analytics. Our journey started four years ago because our CHRO and the HR management team, which I was part of, believed this was the way forward. But a long the way this belief strengthened within the HR leadership and in our business. That is why today one of our must-win battles is ‘becoming a fact-based HR organisation’. Analytics is becoming more and more part of our HR DNA, thanks to our leaders.

Our analytical product offering

We are constantly improving our analytical product offering in order to make better-informed decisions that positively impact our business goals. Let us talk briefly about our current offering but also about some of our future and innovative ideas.

1.    People Analytics, or (predictive) HR analytics, is the focus of most of my previous posts. If you read all of them, in which case thank you, I am guessing you are pretty familiar with this product by now. If you did not read them yet, at the end of this post I provide the links to all of my previous posts. In the previous section I already elaborated on the tools and techniques we are currently using. Although we appreciate where we are in terms of maturity, we are never too old to learn and we will continue to experiment and apply new tools and techniques. 

In the last four years we supported most business lines with our predictive research capability. Here are some recent examples. For our call centres we identified the most important people characteristics that influence average handling time and call satisfaction. We also isolated the difference in characteristics for our top and bottom performers. Within private banking we found the main HR drivers to maximise client satisfaction and financial goals. Within retail we measured and isolated the effect of a large training intervention with the goal to improve the net promoter score of our customers. And finally we examined the effects of having a strong organisational or individual purpose on organisational loyalty, performance and engagement. For us, people analytics is still a very important and innovative product that really provides insights to our customers and helps them to take the appropriate actions, but there are more analytical products that can help.

2.    Survey ManagementWe inherited the engagement survey, a valuable source of information for our organisation. However we believe we need to step up on this product and have to move away from an annual survey to continuous listening. Individuals go through the so-called employee life cycle. They interact with our organisation through processes like recruitment, on boarding, performance management, training and development and reorganisations and they all have personal experiences we can learn from. Again, not once a year but continuously.

We also think we have to move away from large sixty-item questionnaires to smaller questionnaires per HR topic (e.g. engagement, leadership, diversity). An important reason is of course to simplify our surveys but also to better time the different HR topics when they are relevant. Furthermore we should be able to work with samples of our populations instead of trying to reach everybody at the same time and send out our questionnaires via apps or at least a mobile platform. By doing all this we will be able to listen better on relevant topics when it matters the most. Good examples of companies who are embracing a similar survey strategy are Adidas and Ziggo. Also for more on continuous listening and analytics I refer to some great recent posts by Laura Stevens. We are looking to invest more in psychometric skills to improve survey design and to evaluate the validity of our questionnaires. Needless to say that surveys can enrich our data that is used in our HR analytical research.

3.    Fact-based HR TransformationOne of our main focus areas in HR is becoming more fact-based, or evidence based. But what does that mean? When are we successful in becoming more fact based? It would be ironic not to define our success indicators on this, right? So we determined six areas of which we believe they are prerequisites for a fact-based organisation. I) Infrastructure, II) Data quality, III) Data analytics, IV) Product/ process data availability, V) Skills and capabilities and VI) culture and leadership. Each area can be evaluated as low, medium or high mature for your client’s organisation. Based on the gaps you create a strategy to transform your current organisation to a more fact-based organisation. Our analytical department will work together with our HR IT department and HR data quality department to close the identified gaps. We might talk more on this in a next post. There are more maturity models similar to this one in the market. A good example is the maturity model of 3nStrategy, which inspired us to create ours.  

4.    Support on strategic reporting and KPI setting. We create periodic reports for HR management, the executive committee and advisory board. In most cases we report on items like FTE trends, engagement, absenteeism, recruitment pipelines and diversity. We are currently thinking of simplifying and merging some of the reports. We are also thinking to include external HR trends and outcomes of our analytical research. This will bring our reporting to a more strategic level.

We are also often asked to advice on the definition of key performance indicators. You can have very long discussions on the definition of an underperformer, a regretted leaver or the performance of a team. We can facilitate these discussions because we have experience in defining metrics and we know if they can actually be measured. Having a clear HR metric catalogue within your organisation, that provides definitions of metrics and when to use them, can be very helpful. There are some good examples of HR and industry initiatives to formulate such an HR metric catalogue.

5.    Creating a Business HR strategy. This is actually what it is about! How can we create an HR strategy that helps our business to reach their goals? This is where strategy meets analytics! Many companies already have years of experience with strategic workforce planning. But in many cases, including ours, these types of projects start with a large scope, many stakeholders and an over engineered planning. In other words they start too big with a high risk of never reaching the finish line.

That is why we turned it around. Let us make strategy step by step and together. We propose an agile approach to create the business HR strategy. Agile because we bring different experts, e.g. business, HR business partner, HR analytics, HR strategy, in the same room. And agile because we aim for a realistic and minimum viable product, e.g. interpretation business strategy, primary impacted workforce domains, GAP analyses, intervention plan and an evaluation plan. So the underlying principles and questions of strategic workforce planning are still valid. Is our workforce fit for purpose? And what can we do about it? But we believe that with our approach we make it easier to answer these questions and we do it together throughout the whole process.

In most cases three to four workshops will do, but in some cases less is also doable. This depends on the pre and intermediate work that can be done and the robustness of the business strategy. In our experience, and if you are ready for it, a very nice way to interact with your customer during these workshops, is to bring in your analytical tools and run your models or queries on the spot. Like mentioned before, we are using BigML (Big Machine Learning) to run some of our models. We experienced that the BigML interface is well accepted by our customers and you can easily run models on suggested targets and segments of your populations during the workshop. We also use HR dashboards developed with MicroStrategy and our engagement dashboard by Willis Tower Watson. The interaction and iterative analyses during the workshop strongly engages our customer.

Final thoughts

I hope you appreciate us sharing our experiences and thoughts. And maybe this post provides you with some ideas and sets you in the right direction to create a fact-based HR organisation. I would like to thank my team at ABN AMRO for all their contributions. Lets keep up the good work.

Then for those who want to read more on HR analytics, survey management, strategic workforce management of evidence based HR in general I highly recommend the following experts. Without their expertise, ideas and willingness to share we would not be where we are today.

David Green (IBM), Dave Millner (IBM), Luk Smeyers (iNostix by Deloitte), Laura Stevens(iNostix by Deloitte), Max Blumberg (Blumberg Partnership Ltd), Eugene Burke(Eugeneburkeconsulting, People technologies ltd), Jonathan Ferrar (OchreRock ltd), Stefan Hierl (Adidas), Tom Haak (HR Trend Institute), Klaas Toes (ROI Institute Europe, The Conference Board EMEA), Rob Briner (Professor of Organizational Psychology at Queen Mary University of London), Bernard Marr (Advanced Performance Institute), Alec Levenson (Center for Effective Organizations), Tracy Smith (Numerical Insights), Greta Roberts (Talent Analytics), Andrew Spence (Glass Bead Consulting), Richard Rosenow(Citi), Morten Kamp Andersen (proacteur, LindCapital), Sjoerd van den Heuvel (People Analytics Researcher), AnalyticsinHR.


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HR Transformation
40 Talent Principles That Represent the Future of HR

The Future of HR Is Already Here — Dominate Your Industry by Adopting These Silicon Valley Principles

If your CEO expects your firm to lead your industry, he/she will eventually realize that this can only happen if the firm adopts a “continuous innovation” model. That means that CEOs in all major industries will eventually have to look to the bastion of innovation in the Silicon Valley for ways to increase innovation through superior people management. The Silicon Valley already has an established set of proven principles for effectively managing people and innovation. “The Future of HR” already exists, and it can be found today in the Silicon Valley.

I get to travel the world sharing how Silicon Valley manages talent. And during that travel, I also get to learn how hundreds of firms in other regions and countries manage their talent. And when I make a side-by-side comparison, I am instantly reminded of the quantum difference between the two. It’s like night and day.

Silicon Valley Business Results Reveal the Power of These Principles 

We know that our talent management principles are incredibly effective, because in the Silicon Valley we have firms like Apple, Google, and Facebook that serially innovate at a breathtaking speed. As a result, these firms are literally the most valuable firms in the world in market cap value (Apple is No. 1, Google/Alphabet is No. 2, and upstart Facebook is already No. 6). Firms like Apple, Google and Facebook also have incredibly productive workforces (each worker on average produces $2.12 million in revenue each year at Apple; it’s $1.41 million at Facebook and $1.19 million at Google).

If you’re curious about how your firm compares to these amazing results, go to MarketWatch.com and enter the firm’s stock symbol in the search box to see how any publicly traded firm compares (also the box on the left hand side states the revenue per employee).

Which Model Represents the Future? 

I would wager that firms that want to lead their industry (no matter where they are located) will have to learn to follow our Silicon Valley principles of talent management. Even if you don’t believe my contention that “The future of HR” is here today, quickly note how the talent principles that we operate under are dramatically different from the traditional risk-adverse approach that your firm probably uses in HR. So after a quick scan, you should simply ask yourself, which model represents the future and which approach represents the past? And my guess is that you will then have a follow-up thought, which is not if you will make the shift, but when.

Silicon Valley Talent Management Principles That You Can’t Afford to Ignore

These Silicon Valley talent management principles are separated into three categories.

A) Talent management principles that apply across every aspect of the firm

The most impactful talent principles in this section are listed first.

1)  Quantify talent management’s impact on strategic goals — talent management needs to shift away from an overhead function mentality and to begin focusing on having a direct impact on strategic business goals like revenue and innovation. Because the language of business is money, talent management needs to work with the CFO to determine how to best measure and quantify in dollars its impact on the targeted strategic goals. Talent-management leaders must also focus on solving business problems, rather than its historically lower-level focus on tactical “HR problems.” A talent-management focus on revenue-generating jobs is also justified because of its direct impact on the strategic goal of increasing corporate revenue.

2)  Innovation dominates — innovation becomes the top strategic goal at most firms. It not only creates exponentially higher business returns, but it also creates disruption, which hurts competitor firms. As a result, increasing innovation in products, processes, and people needs to be the primary goal. Because people create innovations, talent management, rather than product development, needs to take the lead in using data-driven methods to increase innovation. Being an innovative firm also has the side benefit of attracting and retaining top talent.

3)  Speed contributes to innovation — innovation means being first and in most cases that yields higher margins and a first-mover advantage. Being first requires speed capabilities in employees, managers, and decision-making processes. In order to get everyone’s attention, the dollar cost of “a delayed decision” or “doing nothing” must be revealed.

4)  Collaboration contributes to innovation — purposely increasing serendipitous interactions among employees outside the team increases sharing and learning, which in turn increases innovation. Talent management needs to scientifically determine how to increase collaboration.

5)  Rapid learning contributes to innovation — innovation, collaboration, and speed all require rapid learning and data shows that learning on the job has the highest impact. So “learning ability” should be the No. 1 hiring competency across all jobs.

6)  Freedom must be expanded — expanding employee choices and freedom motivates them, and it creates customized dream jobs. Employee freedom also provides time to think, learn, and experiment, which taken together increase innovation.

7)  Learning from failure is essential — in a rapidly changing business world, when striving for innovation, taking calculated risks allows you to take large jumps forward. However, failure is only valuable if you learn from it, so failure analysis and acting on the provided feedback is essential in order to get that rapid improvement (i.e. move fast and break things).

8)  Adaptiveness is essential — an increasingly volatile business world means everyone will encounter double-digit rates of hard-to-predict change. This means hiring and retaining people who are highly adaptable. And this uncertainty will force new talent-management programs to be scalable in capacity, to have assumed obsolescence in their design, and agility in their processes.

9)  Next, maximize workforce productivity — after increasing innovation, increasing the productivity of the workforce to where it is the highest in the industry is the next most important talent-management goal. The average revenue per employee is the accepted assessment ratio for comparing workforce productivity.

10)                A focus on top performers — measuring the performance differential between top performers and the average demonstrates that exceptional performers produce exponential returns. So a focus on top performers is justified in recruiting, retention, internal movement, and development. Talent management must customize this approach to ensure that their unique needs are met and that they are rewarded unequally, based on performance.

11)                Prioritize talent management’s targets — there are never enough available resources, so everything must be prioritized based on its potential business impact. Prioritize high-value projects, business units, key jobs, and innovators/top performers. And then provide them with the highest quality and the most talent-management resources.

12)                Talent management provides a competitive advantage for your firm – Talent management is not exempt from being highly competitive. Everything in talent management must be measurably better than your firm’s competitors. So conduct a competitive analysis and compare “us to them” to make sure that your firm is superior in its talent-management approaches and results.

13)                Have a War for Talent recruiting mentality — you must be talent centric because it is the No. 1 business success factor when continuous innovation is the primary goal. Recruiting has the highest business impact of any people-management function. So use the most effective recruiting tools and sources (i.e. employee referrals) and realize that the war for talent (due to low unemployment ) requires aggressiveness, so boldly poach the best from your competitors.

14)                The two brands both emphasize innovation — the most powerful long-term attraction strategy is a combined product brand and employer brand that both emphasize innovation. The most impactful brand pillars to attract and retain innovators and top performers include offering great work, having a high impact, and working with great managers and coworkers.

15)                Influence over command and control — no one likes to be ordered, so “nudges” and “influencing” must replace ordering. Influence employees and managers with data, proof of “what works,” and revealing the financial consequences of making a bad decision.

16)                Transparency is essential — providing broad employee access to information improves decision-making and innovation. Open information access and sharing also reveals your level of trust in your employees.

17)                Teams dominate — innovative ideas can’t be successfully implemented by individuals acting alone, so teams become essential. In addition, most work will shift, so that it becomes more like project work. Numerous small ad hoc teams will be needed and they will be successful if they share two common characteristics, members speak in roughly the same proportion, and members on average have a high level of “social sensitivity” to each other.

18)                Best-practice sharing — widely sharing what has proven to already work internally costs little, so it has the No. 1 ROI in talent management. However, a formal process along with sharing metrics are needed to best facilitate rapid internal best practice and problem sharing.

19)                Global capabilities — with numerous global variations, the typical talent management “one-size-fits-all” approach actually reduces overall productivity. Instead “a one-size-fits-one” avocado approach, which allows for some local customization, is best.

20)                Aim-ahead benchmarking – be careful because traditional benchmarking where you match current practices may only help you catch-up. Instead, if you want to lead, aim one year ahead of what others are currently planning.

 B) TM principles that apply primarily within the HR function

The most important talent principles in this section are listed first.

1)  Success in talent management is defined as maximizing productivity and innovation — talent management’s primary focus and measure of success should be optimizing the dollar value resulting from employee productivity and innovation. Rather than a focus on processes and compliance, talent management should be considered and act like “The Productivity and Innovation Consulting Center.”

2)  A shift to data-based talent decisions — shifting away from an intuitive and past-practice model in talent management, relying on data results in faster, more accurate and more credible talent decisions. Analytics are superior to historical HR metrics because they reveal “why” things work, trends, and effective action steps to take. Distributing talent-management metrics widely dramatically increases awareness and internal competition.

3)  Manage a performance culture — talent management must take responsibility for building and maintaining a powerful performance culture, where everything emphasizes performance. Communications, metrics, recognition, and rewards must be closely tied to job performance. And effort, years of service, job titles, education, and political connections should have their influence minimized.

4)  Prove talent-management programs work — in a fast-changing world, talent-management programs quickly become ineffective. So proactively calculate correlations, and use pilots and split samples to prove which programs still work. Also, correlate hiring selection factors and sources with quality of hire data, to determine which ones currently predict on-the-job performance. Adding an R&D team allows talent management to experiment with new approaches.

5)  Prioritize talent programs, based on their impact — after determining which talent-management programs actually work, gather data to determine which talent programs have the highest business impacts on important goals like revenue and profit. And then prioritize and focus on those highest-impact activities (e.g. recruiting, retention, and the manager).

6)  A continuous updated talent-management business case — because the top factor that limits HR effectiveness is often a lack of resources, work with the CFO to build a continuously updated business case. Quantifying your results and their financial impact on revenue will influence executives and provide you with significantly more resources which will allow talent management to innovate and move faster.

7)  Talent management must take calculated risks — after a lack of resources, having a risk profile that doesn’t match the business environment is the No. 2 failure factor facing talent management. HR must learn to take up to 50 percent more risks with bold proactive but calculated actions that produce a measurably higher payback, ROI, and competitive advantage.

8)  Talent management must be forward-looking — predictive analytics, trendlines, and projections warn managers about problems when there is still time left to act. In addition, forward-looking data-driven workforce and succession planning can accurately project the career trajectory of key employees.

9)  Team/manager performance must continually improve — because teams will dominate, talent-management professionals must become experts in team management. So talent management must identify the factors that increase team performance, productivity, and innovation and the factors that increase a manager’s performance (e.g. Google’s Project Aristotle and Project Oxygen).

10)                Borrow from business functions – Talent management can decrease its failure rate and increase its speed and rate of innovation. It can accomplish that by proactively borrowing and then adapting already operational practices from other business functions and industries.

11)                Managers do most HR — perhaps the biggest shock to traditionalist in HR is the changing role of the manager. People-management decisions will be made closer to the employee because line managers will have access on their mobile phones to real-time people management data and the recommended actions. As a result, managers will “do most HR” at a higher level of quality, without the help of generalists or central staff.

12)                In-house consulting — because technology allows managers to do most HR work, HR shifts to an in-house management consulting firm model. It offers advanced advice and proven data-driven solutions.

13)                Employer brand management — because it is the No. 1 long-term attraction and retention factor, talent management must take ownership of the brand. The employer brand can be most effectively built by increasing employee referrals through providing employees with a story inventory of WOW company stories. Encouraging managers and employees to be highly visible on social media and through writing and speaking about your firm’s best practices is also essential.

14)                A focus on quality — move away from HR’s traditional exclusive focus on costs and volume, and instead focus on quality and results. Quality can be indicated by advanced program features, high satisfaction rates, rapid response rates, accurate answers, low error rates, and a measurable improvement in performance. Quality is the No. 1 metric that is most frequently omitted from the metrics set for an individual talent-management program.

15)                Diversity because of its business impact – talent management supports diversity not because of legal requirements, but because data demonstrates that when your workforce in key jobs reflects your desired customer base, business results improve.

16)                A whole career focus — when you focus on top performers and innovators, you quickly realize that career-long retention is simply not a realistic goal. Instead, develop a plan to get the most out of them whenever you can during parts of their entire career.

17)                Respect a manager’s time — minimize the amount of time that managers must spend on talent-management activities. Also include the cost of employees’/managers’ time in your program cost calculations when talent management activities take them away from their regular job responsibilities.

18)                Technology dominates — in a global world where speed is essential, software, hardware, social media, and the mobile platform must support everything in talent management.

19)                Centralized talent management — a centralized, integrated, data-driven, technology supported and demand-driven approach to talent management has proven to be superior to a decentralized one.

20)                The capabilities of the talent-management staff must change — all of the actions described above cannot be accomplished with the current skill sets in most HR departments. Instead, all new talent-management hires must have some experience in the business itself and in consulting with clients. New hires must also have business acumen and knowledge in the financial, data, and technology areas.

 C) TM must minimalize these traditional approaches

In addition to the above positive principles that must be added, in order to maximize its effectiveness, talent management must stop doing many current “low-value-add” things. It should stop inventing new HR buzzwords, stop following HR fads, and stop acting like an overhead function, where it emphasizes cutting costs over increasing revenue. HR should shift from trying just to be a business partner to setting a goal of achieving the status of business leader. And it should stop trying to merely align with strategic goals and instead to directly impact those goals.

Talent management must also stop worrying about getting “a seat at the table” and instead strive to become a proactive leader on the executive team that others listen to and follow. And finally talent management must realize that technology can often now replace employees, so it needs to consider software, hardware and robotic substitutes before it automatically hires, trains, developed, or transfers employees.

Final Thoughts

Because of constant change in the business world, whenever you are trying to predict the future of HR, anticipate radical changes in it. But there might be no need to wait because there is already an area called the Silicon Valley where talent management currently operates in a radically different way. And it is this author’s contention that our principles of talent management already reflect the way that every firm will manage its talent in the future. And that means by simply studying and matching the way that Silicon Valley firms currently operate, any firm can produce the equivalent results to firms like Apple, Google, or Facebook. The path is clear and the only restriction that I have encountered … is a lack of courage.


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HR Transformation
The HR Department of 2020: 6 Bold Predictions

The human resources department is doomed. There is no viable future for the HR function, and HR professionals will inevitably be replaced by software. At least that’s what some are saying.

They’re wrong.

Without a doubt, software is changing how HR functions. But rather than spell the end of the human resources function, the nine experts I interviewed predict these changes will provide growth opportunities for HR professionals. This article lays out what will change and why, as well as how HR professionals can prepare.

Prediction 1: In-house HR will downsize and outsourcing will increase.

This prediction may seem somewhat, well, predictable. But the reasons our experts give for the change might surprise you.

Industry analyst Brian Sommer, the founder of TechVentive, claims a shift to smaller HR departments will be caused by new technologies and increased employee participation in HR processes. As he claims, “Many businesses are going to get a lot of capability done by better technology, more self-service and the employee doing a lot on their own.” For instance, employees will increasingly input their own data into self-service systems.

In addition, many transaction-heavy HR jobs will be outsourced entirely to HR agencies or specialists. Dr. Janice Presser, CEO of The Gabriel Institute, goes so far as to say, “Entry-level HR jobs, as they currently exist, will all but disappear as transactional tasks are consigned to outsourced services.”

Elizabeth Brashears, the director of Human Capital Consulting at TriNet HR, as well as Scot Marcotte, Barry Hall and Steve Coco of Buck Consultants, believe benefits administration will be particularly impacted as a result of increasing regulations and a globalized workforce. Brashears says, “As regulations surrounding employment, and particularly benefits, become more and more complex, I believe that companies will turn to field experts to help navigate through the landscape.”

Elaborating on this point, the experts at Buck Consultants say, “With employees taking on increasing responsibility for their benefits, we’ll see not only the administration of benefit programs but the entire benefits department become outsourced. Service firms will offer ‘benefit-in-a-box’ models that will offer cost-effective, bundled health and welfare, wellness and retirement plans to organizations.”

Nonetheless, the internal HR function will survive. As Chip Luman, the COO of HireVue, explains, “Given the ongoing regulatory environment, the need to pay, provide benefits, manage employee relations issues, and process information will go on.”

Prediction 2: Strategic thinking will become in-house HR’s new core competence.

The leaner version of HR that remains will need to reposition itself as a strategic partner within the business. In fact, the trend toward smaller, more strategy-focused HR departments was predicted 11 years ago in SHRM’s 2002 report, The Future of the HR Profession.

More recently, an Economist Intelligence Unit report stressed the need for C-suite executives to partner with HR to drive growth. In support of that, over half the experts I interviewed mentioned that HR needs to increase its strategic value to the business–or else. Dr. Presser says, “This includes the ability to make accurate projections based on understanding the goals of the business and using metrics that describe more than lagging indicators, such as how long it takes to fill a job or the per-employee training spend.”

This strategy role cannot be outsourced. As Dr. Presser says, “Strategic planning requires in-house expertise.”

In fact, Brashears predicts the trend toward a more strategic HR function may even drive the creation of new job titles. As she explains, “HR Professionals will likely transition into HR Business Professionals who not only understand HR implications but also business operations and strategy.”

Prediction 3: The pendulum will swing back to the specialist.

Janine Truitt, Chief Innovations Officer of Talent Think Innovations, observes a cyclical shift in the HR field. As she explains, “Every decade or so we fluctuate back and forth from the paradigm of the independent contributor/specialist to the generalist practitioner. We were in a ‘generalist’ mode and now I think the pendulum may be swinging back toward the specialist.”

Luman puts it more bluntly: “HR generalists as we know them will disappear.”

Brashears agrees, noting that “There will be more specialized roles. I believe this to be the case as the employment landscape becomes more complex with changing regulations around employment law and benefit compliance with the Affordable Care Act.”

Prediction 4: HR will increasingly utilize analytics and big data to augment its value to the firm.

In-house HR professionals will need to embrace analytics and “big data”–now often included in talent management software suites–to become strategic leaders in their companies. Gyutae Park, head of Human Resources at Money Crashers Personal Finance, predicts that:

“In the coming decade, the career trajectory of HR professionals will be determined more so than ever by the analysis of data and metrics. Although HR already uses some metrics such as turnover ratios and employee engagement levels, you can expect to see new metrics tracked and used in HR, such as the average timeframe for staff to be ready for promotion, or percentage of top candidates to be hired within the organization.”


New hires might be needed in the HR department to accommodate the increased use of analytics. As Dr. Presser explains, “The current trends in big data will provide new ways for HR to prove its value, so we can expect HR departments to want to add people who can analyze and make projections using these tools, and people who can drive positive change using the information derived from the analysis.”

Prediction 5: Managing a remote workforce will be the new norm.

Recent moves by companies like Yahoo and Best Buy to end their remote work programs are the exception, not the new normal. Without a doubt, HR will increasingly have to tackle the challenge of managing a remote workforce. Luman points out that companies will need “to leverage employees where and when they are most productive and impactful”–even if that means they’re halfway around the world.

But remote management isn’t a skill you can pick up on the fly. Dr. Presser cautions that, “The trend toward remote workers is a growing challenge to managers who are not effective in managing people at a distance.”

Automation and a different set of expectations will be part of the solution. Wim de Smet, CEO of Exaserv, predicts that “New technologies will be used to analyze the work production instead of the working time. Results will become more important and business will expect HR to be producing more result-driven performance analysis.”

Prediction 6: HR will need to become more like Marketing.

Sommer says that “recruiting is going to become more like marketing.” Specifically, he advocates that recruiters “identify specific micro-segments of either job seekers or job holders that you want to target to bring into your firm, just like a marketing firm would.”

The experts at Buck Consultants cast an even wider net. They claim the need for HR to think like marketers will expand beyond recruiting. “HR will evolve the ‘internal marketing’ role to include social marketing coordination and brand ownership, that is, outside talent ‘buying’ into the brand–the company–to potentially work in the organization,” they say.

Preparing for 2020

What can current HR professionals begin doing now to prepare for these predicted changes? The experts all endorse one tactic: keep learning. Risk-taking and networking will help, too.

“Get ahead of the curve,” advises Dr. Presser, “Realize that many of today’s ‘best practices’ evolved under very different business conditions, and may well become obsolete within this decade. Learn everything you can about your industry, your competitors, and pending legislation that affects your business operations. Most of all, define yourself as a businessperson and act accordingly.”

Truitt advises pursuing additional training or formal education. As she observes:

“One difference that we will see clearly in the next decade is that people will not be able to merely fall into HR. Long ago, when HR was ‘Personnel,’ the profession was largely made up of individuals that happened upon the profession. With many colleges and universities offering HR coursework and degrees at the bachelor’s and master’s level…it seems that the future HR practitioner will likely have to be formally educated in this discipline to be gainfully employed in HR.”


In particular, HR professionals should dig deep into one HR specialty. And, given their increasing importance, training should include data analysis and business strategy components.

Additionally, Lynda Zugec, Founder and Chairman of The Workforce Consultants, advocates welcoming failure as a learning tool. As she says, “In the changing HR landscape of today, failure is embraced because it means that you were brave enough to ‘give it a shot’ and also that you now have more information regarding what works and what doesn’t work than before. Eventually, if you keep exploring different avenues, you are bound to succeed.”

Finally, Luman encourages HR professionals to develop their own personal brand–to find their voice and be active. As he says, “Network inside and outside of your field. Blog, communicate, read and help others achieve success. If you are not outside of your comfort zone, you are stagnating.”


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HR Transformation
Dave Ulrich: Build HR on relationships, not roles

There has been much debate about Dave Ulrich’s HR model, which has widely been adopted by organisations around the world and aims to enable HR teams to think strategically about their organisation’s human resources as a value-add to their business – and build a talent strategy accordingly.

An academic at Ross School of Business at the University of Michigan, Ulrich has been ranked the #1 Management Educator & Guru by BusinessWeek and selected by Fast Company as one of the 10 most innovative and creative leaders.

Today, debates still continue about how to organise HR departments. Should HR work be centralised (functionally driven across an enterprise), decentralised (uniquely applied to each business), or some combination (shared services)?

Do you think that HR is at different stages of evolution depending on where in the globe an organisation is based?

There are many HR practices that vary by geography, industry, size of company and competitive strategy. Sometimes legislation or regulation shapes how organisations treat people. But there are some universal HR principles that pervade all organisations and settings:

1. HR should be measured by the value it creates more than the activities it does
2. HR delivers value in talent, leadership and capability (culture)
3. HR’s value is increased when it offers integrated solutions of HR practices, rather than isolated or event-driven practices
4. HR is owned by line managers, with HR professionals being architects and anthropologists.

How do you think that HR departments are viewed specifically in the region?

Our research on global HR competencies shows that there are some unique HR challenges in the Gulf States region, including localisation of talent (versus over-reliance on expats), becoming less dependent on a single industry or product (eg: oil) and competing in global, not regional markets.

 We found in our research that Middle East HR professionals tend to score lower in the six domains of HR competence, need to have a balance of HR competencies to be seen as effective, and that they have more impact on business results when they offer integrated solutions. 

 

How does this compare with the global position of HR?

Looking at the 12 key foci of an HR department, overall we found that “has clear roles and responsibilities for each of the groups within HR (eg: service centres, centres of expertise, embedded HR)” ranks as among the best done but least impactful on business. On the other hand, “connects HR activities to external stakeholder expectations (eg: customers, investors)” and “tracks and measures the impact of HR” were the two activities with highest business impact and least well done.

Why do you think this is? Do you believe that HR teams lack the skills necessary for these value-adding activities or are perhaps short of confidence?

These findings suggest that a head of HR should make sure that his department focuses on creating value for external stakeholders such as customers. This outside-in HR focus is newer for many HR departments, so it differentiates the good from the bad ones. Many HR departments emphasise success as measured by things that happen inside the company (eg: cost per hire per employee) less than whether the employee hired has the skills that build customer confidence and revenue from key customers. We like to study and find future, not past, HR skills. These outside-in skills define the future.

So how might this play out in Middle Eastern culture?

Some HR leaders are constantly rearranging the boxes on an organisation chart to help the HR department be more effective. This is like assuming a family will get along better by buying new furniture or adding a new room to the house. Physical adjustments may be necessary, but relationships matter most. In the Middle East region, relationships seem to be at the heart of organisational governance. For HR, this means putting people into the function who have strong reputations and abilities to forge good relationships. Then, those in HR should work to highlight relationships as part of their stewardship. 

For families to function better, they need to learn to belong, to focus on relationships more than roles. For HR operating models to deliver more value, once the basic roles are satisfied (eg: matching HR structure to business strategy and structure), maybe we should focus more on relationships than roles. 

For the HR operating model to deliver real value, HR roles matter. Families need houses with rooms that reflect their lifestyle. But relationships matter even more. A nice house will not ensure a well-functioning family, nor will an elegant organisation chart guarantee an effective HR operating model. 

Roles matter, but they matter less than relationships. Maybe it is time for our discussions of the HR operating model to focus more on relationships than roles. 

What is your advice to HR leaders in the GCC wary of transferring Western practices?

We look to the past to learn and to the future to create. Even in short histories, senior HR leaders in the Middle East can discern what is more or less likely to work. But they should be very attuned to what will be required to be effective in the future. When learning from other settings, be wary of: best systems, not best practices…any isolated best practice works within a system; adapt, don’t adopt, which means do not just do what someone else did, but learn from what they did and see how it adapts; and leapfrog…don’t do what someone else has done, but go to the next generation of that activity.

What are your top tips for HR leaders operating in this region to win the respect of the people they are leading and develop credibility within their businesses?

Firstly, concentrate less on HR and more on the business. This means starting every conversation with the requirements of the business, not on the activity of HR. In addition, define outcomes of HR in terms of talent, leadership and capability. Make sure you can discern the required talent, leadership and culture for any specific business challenge. Also, create innovative and integrated HR solutions that will deliver these outcomes. Build an HR department that has clear roles and positive relationships. Finally, make sure that HR professionals demonstrate the competencies that deliver business results. 


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Employee Engagement/Experience
Culture and engagement: The naked organization

Employee engagement and culture are now business issues, not just topics for HR to debate. And there’s no place for organizations to hide.

 

·       In an era of heightened corporate transparency, greater workforce mobility, and severe skills shortages, culture, engagement, and retention have emerged as top issues for business leaders. These issues are not simply an HR problem.

·      Culture and engagement is the most important issue companies face around the world. 87 percent of organizations cite culture and engagement as one of their top challenges, and 50 percent call the problem “very important.”

·      Organizations that create a culture defined by meaningful work, deep employee engagement, job and organizational fit, and strong leadership are outperforming their peers and will likely beat their competition in attracting top talent.

Today’s organizations live in the Glassdoor era. Every corporate decision is immediately publicly exposed and debated. Once-private issues are now posted online for every employee—and every potential employee—to read. An organization’s culture—which can be loosely defined as “the way things work around here”—is increasingly visible for all the world to see.

 

Given the harsh spotlight of this new transparency, an organization’s culture can become a key competitive advantage—or its Achilles’ heel. Culture and engagement are now business issues, not just topics for HR to debate. And there’s no place for organizations to hide.

This year, employee engagement and culture issues exploded onto the scene, rising to become the No. 1 challenge around the world in our study.1An overwhelming 87 percent of respondents believe the issue is “important,” with 50 percent citing the problem as “very important”—double the proportion in last year’s survey. Two-thirds (66 percent) of HR respondents reported that they are updating their engagement and retention strategies (figure 1). Along with decreasing readiness, our data also showed substantial capability gaps in engagement and culture across countries and regions (figure 2).

DUP1132_CultureEngagement_Figure1

DUP1132_CultureEngagementFigure2Research shows that in most companies, engagement is low. According to the Gallup polling firm, only 13 percent of the global workforce is “highly engaged.”2 Upwards of half the workforce would not recommend their employer to their peers.3

Despite this challenge, a substantial proportion of the respondents in this year’s survey (22 percent) report that their organizations have either a poor program to measure and improve engagement, or no program at all. Only 7 percent rate themselves excellent at measuring, driving, and improving engagement and retention (figure 3). And only 12 percent believe their organizations are excellent at effectively driving the desired culture.

DUP1132_CultureEngagement_Figure3

This is a new and systemic problem for organizations worldwide. Why has it become so acute?

·      Employees are now like customers; companies have to consider them volunteers, not just workers: As the job market has heated up and new technologies have exploded, power has shifted from the employer to the employee. Websites like Glassdoor, LinkedIn, Facebook, and others not only increase transparency about a company’s workplace; they make it far easier for employees to learn about new job opportunities and gain intelligence about company cultures.

·      Leaders lack an understanding of and models for culture: Culture is driven from the top down. Yet most executives cannot even define their organization’s culture, much less figure out how to disseminate it through the company.

·      The new world of work changes the way we engage people: The world of work is very different from and more complex than it was only a few years ago. Employees today work more hours and are nearly continuously connected to their jobs by pervasive mobile technologies. They work on demanding cross-functional teams that often bring new people together at a rapid rate. Flexibility, empowerment, development, and mobility all now play a big role in defining a company’s culture.

·      Employees’ motivations have changed: Today’s workers have a new focus on purpose, mission, and work-life integration.4  Research shows that a variety of complex factors contribute to strong employee engagement, including job design, management, work environment, development, and leadership.5 Today, more than twice as many employees are motivated by work passion than career ambition (12 percent vs. 5 percent), indicating a need for leadership to focus on making the work environment compelling and enjoyable for everyone.6

Culture and engagement is no longer an arcane topic owned by HR. It is now an imperative for every leader and every executive in the organization. Many studies now show that highly engaged companies can hire more easily, deliver stronger customer service, have the lowest voluntary turnover rates, and be more profitable over the long run.7

Google, a highly rated “best place to work” in many studies, focuses heavily on culture.8  The company regularly measures dozens of factors to understand what makes people productive and happy. This research has shaped Google’s workplace culture in myriad ways—from the company’s open workplace design to the provision of free gourmet food and on-site laundry services for employees.

Although culture and engagement play such a critical role in business performance, most organizations do a poor job of measuring their achievements or shortcomings. Historically, companies have relied on annual engagement surveys, often costing hundreds of thousands of dollars and taking months to deploy. And very few companies have a process or tools to measure culture and learn where it is strong, weak, or inconsistent. At a time when corporate cultures are being continuously debated, shaped, and redefined on social networks, the once-a-year survey is perilously obsolete.

While most leaders are measured on the basis of business results, organizations must begin holding leaders accountable for building a strong and enduring culture, listening to feedback, and engaging and retaining their teams.

Fortunately, new tools are emerging to provide organizations with real-time sentiment and employee feedback. A new breed of vendors offers pulse survey tools, employee sentiment management tools, culture assessment tools, and real-time employee monitoring tools to help leaders and supervisors rapidly assess when engagement is high and when problems are arising.9 These new tools make it possible for organizations to monitor employee sentiment with the same level of rigor and speed as they measure customer sentiment.10

Ultimately, the issues of culture and engagement are driven by leadership. Companies pushing aggressive growth plans, experiencing financial stress, or going through layoffs or mergers often see a radical shift in culture. While most leaders are measured on the basis of business results, organizations must begin holding leaders accountable for building a strong and enduring culture, listening to feedback, and engaging and retaining their teams.

HR should also understand the impact of performance management, work-life balance, and flexibility on engagement. While management practices once pushed companies toward a highly competitive performance management process, in 2015, many companies are finding that pressure and competition often lead to high turnover and ultimately poorer business results.

Lessons from the front lines

A series of events at one global financial services company not only fed a negative public perception of the company, but also generated a lack of trust internally. To turn the organization around, the company launched a five-year transformation program, a key component of which was to build a sustainable, values-driven culture across the organization.

This cultural transformation had three key distinguishing principles that were critical to the program’s success:

·      Leadership drives culture which in turn drives performance: Company leaders should drive the change and be highly accountable

·      Processes, policies, and systems should be congruent with the company’s new purpose and underpinning values

·      The results should be measurable and reported both internally and externally, providing a highly visible yardstick of progress

To jump-start the transformation, HR introduced a series of leadership and development programs to support employees in being willing and able to live the new values. There was an initial focus on informing, engaging, and empowering senior leaders and culture carriers to promote the company’s new values, equipping them with the necessary insight, knowledge, and tools to drive the change. All processes, policies, and systems were then aligned with the new culture, with performance management, talent management, recognition, and learning all transformed to reflect the new values and behaviors. The company also deployed a cultural assessment tool to understand and measure the conditions for successful transformation.

These activities had a strong and measurable business impact. The result: an improved public reputation; an aligned senior leadership group with culture at the top of their agenda; a growth in trust both internally and externally; and stronger employee engagement and commitment to the organization’s new culture and values.

Where companies can start

·      Engagement starts at the top: Make engagement a corporate priority, and modernize the process of measuring and evaluating engagement throughout the company. Benchmark the company, strive for external recognition as validation of efforts, and reinforce to leadership that the engagement and retention of people is their No. 1 job.

·      Measure in real time: Put in place real-time programs to evaluate and assess organizational culture, using models or tools to better understand where it is strong, where it is weak, and how it really feels to workers.

·      Make work meaningful: Focus on leadership, coaching, and performance management to help employees make their work meaningful. Reinforce the importance of a coaching and feedback culture, and teach leaders how to be authentic and transparent.

·      Listen to the Millennials: Their desires, needs, and values will shape the organization’s culture over the next 10 years.

·      Simplify the work environment: Read our research in this report on the simplification of work to help reduce the burden of today’s 24/7 work environment.

Bottom line

The old adage “culture eats strategy for breakfast” applies to every organization today. Business and HR executives must understand that highly engaged companies attract the best talent, have the lowest voluntary turnover rates, and are more profitable over the long run.11 Companies should use 2015 as a time for change. By focusing on driving engagement through the right corporate culture, companies can improve execution, retention, and financial performance.

 

 


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HR Transformation
Five Traits Of The New CHRO

Last week I got to play DJ and spin some great examples of the new kind of HR leader. In a few days, along with some 15,000 others, I’ll hit Vegas for SHRM 2015. We’re not in the desert to debate whether the HR ecosystem is changing — we know the answer to that one. Nor are we there to learn to love new bells and whistles — as a field, looks like we’re adapting to that brave new world of awesome. The onus now: HR leadership 3.0. It’s time to learn how to lead in ways that embrace the changes, but don’t overlook the essence of what we are here to do.


Chief Human Resources Officers are trending, and they’re going to become more common. That also means our fearless leader may well be a face up in the clouds of the executive floor, so she, or he, had better have the goods to lead the rest of us. And yes, it means that as we climb our own career ladders, we can officially reach for the stars. What should we aspire to bring to the boardroom?


Here are 5 traits for the CHRO A-game:


1. Relevant

My friend Steve Browne cites relevance the key challenge HR faces. Without being woven throughout the business, the relevance of an HR leader is compromised. To be (and be perceived as) relevant, we need to know how to integrate ourselves into all facets of the organization. We need to represent HR has as a function that’s absolutely critical to the firm’s lifeblood, function and trajectory. The new CHRO has the skill to not only stay grounded in that reality, but to convey it so effectively, it’s transformed into a non-issue.


2. Well connected

Timely, given I’m about to head to a party with 15,000 colleagues, but a leader never neglects her outside network. That ring of peers around the planet we call Our Present Job is no tangent: that’s your go-to team, the talent and the culture that you bring to work with you every day. Your peer connections are those helpful voices perched on your shoulder, guiding you from the perspective of talent, not your company’s mission: both are critical facets of your own leadership. Particularly in a climate of continued disruption, your peers are your personal team, and we need their entire range of experience and skills for true 360º leadership and problem solving.


3. Into everything

Tentacles, people, tentacles: spread your arms and fingers as wide as they can possibly reach into every single facet of your organization, and then pull. The HR leader needs to be the hub that brings everyone into the same sandbox, from marketing to IT to operations to accounting to graphic design even down to the person who plans the meals at the company cafeteria. Connecting people is key, and it’s what we know how to do.


4. Verbal

One of our bright rising stars reminded me of this in the most perfect way: she said it. Clearly, enthusiastically, intelligently. No matter what the papers say, the future of HR is not an algorithm, it’s a human. We may wind up with a new branch of HR in the future that’s called RR, as in those of us who have the dubious privilege of staffing up the non-human workers. But for now, and I’d say, for a long, long time, HR is about human talent, human capital, human needs and human lives. Social media and remote conferencing and chats and all that, we will need to be able to actually speak, and engage with other people, face to face. We have to be able to talk. Do the face to face. And, even more important, we need to want to.


5. Disruptable

What does it mean to be a disruptable leader? You can play every position in the game, often at the same time, and embrace constant disruption. It’s a core requirement of the new CHRO: pitcher and catcher, shortstop and outfielder: a combination of appropriate long range and short term competencies. E.g.: the CHRO embraces our shiny tools not as methodologies, but tools, framed with intuition, foresight and creative thinking. The global and multigenerational world of work calls for a very different view of borders and structure: expandable and fluid rather than stacked and static. Finally, the CHRO has no problem taking a sudden, surprise innovation and leveraging its abilities and power. We are flexible, agile, and love change as much as we love people.


That last trait? It had better be a given. You love people. This is tricky universe we’re staffing up and engaging, with shortages and shortfalls and challenges. Some competencies will change, but some won’t: the core goals are the same. No matter the new nomenclature, semantics or infinite data, New Day or Old Guard, human is the bottom line.