Firstly, thanks to all of you who contributed to the lively debate following the recent post "Will the HR function have a seat at the corporate table in 2008?". I was merely highlighting some interesting thoughts from the Inflexion blog, and didn't expect such feverish input from so many of you! (And before I continue, I promise this will be my final rendition using the corny phrase "seat at the table"). Anyway, I have been under pressure from several people to put forward my opinion in this topic, so here we go:
HR used to be merely "personnel" and looked after the administrative activities related to basic employee needs. It wasn't until the '80s when the wider berth of "Human Resources" was developed where HR would be activity involved in all issues people within a firm, and not just the basic admin, i.e. recruiting, organizational design and development, corporate culture, compensation, career planning and counseling etc. The challenge of HR leaders was to get taken seriously at board level and prove their worth to the business. Not an easy task where you are not directly related to revenues and there are always more "critical" issues to be discussed before people strategy. The HR struggle had begun.
Then came the onset of HR suites like Peoplesoft, whereby it became vogue for HR executives to apply metrics to their organizations to help base management decisions. Where else in the company was there a more comprehensive view of staff profiles, compensation, attrition-rates and performance than in the HRIS? Hence, where finance departments could show the board how to budget and forecast the business to aid decisions, HR could (in theory) link employee performance with the business. Part of the problem has been that HR (unlike finance, for example) hasn't done a good enough job of embracing technology to demonstrate real value metrics to the business. It has been stuck in the weeds of blocking and tackling, and not focused enough in areas that get real board attention.
And then the wave of HR outsourcing hit after 9/11. All this achieved was a very public dissection of the "strategic value of HR" as several high-profile companies grabbed at reasons to move out as many HR people as they could into service providers, or out of the firm altogether. It has taken a few years for HRO to iron out its issues, but it had the impact of alienating many HR leaders within firms, and driving them further away from the corporate table. However, I am convinced the HRO industry has now found its balance and the real HR issues are back at the forefront of many organizations' agendas.
My view is centered largely on the skillset of the HR professional today - it's too focused on the legal issues, compliance, managing the basics... and not enough on delving into corporate data to provide real input into driving a talent strategy into the organization. Moreover, we need more "business managers" in HR - people who understand the real business issues, and how to help their firm hire, manage and retain key talent. HR is the most important function in today's organizations, but it has simply not been developing in the right manner. Hence, my thoughts are around HR helping to instill world class HR principles and practices into today's managers. I once managed a team of 14 senior people and it was one of the toughest challenges of my life. I needed support, advice - and a venting outlet - to help me do this effectively. The success of my whole business function centered on my ability to be a good manager. This is where HR, in my opinion, comes into play. It is there to support today's managers, who are under ever-increasing pressure, to get the best out of their people. I have seen so many positive examples of where this works in firms... and, unfortunately, some less successful examples.
Will it get there in 2008? Professor Dave Ulrich, with whom I have enjoyed discussing these issues on several occasions, outlines excellently the roles HR departments must fulfill to deliver value. His mantra is simple: HR must play a role in implementing state-of-the-art strategies that are tailored to the needs of the business... an "operational executor role". In a world of rampant change, where firms are constantly globalizing, restructuring, outsourcing, divesting and acquiring, the need for the operational executor has never been so intense. It is my belief that we will see the roots of this happening in 2008 - otherwise businesses will struggle to survive and change in these complex times.
My interest has been piqued by the recent announcement of Sunlife of Canada outsourcing its UK customer services operation to TCS's Diligenta subsidiary in a $200m deal. This comes hot on the heels of some financial services captive buy-outs in India. The financial services sector has long been the problem child of the BPO industry, with operational executives extremely reluctant to relinquish control over business processes - especially finance and accounting. As I have said on record several times, it will only take a few big deals to hit and many others will follow in a domino effect. Bottom-line, the large BPO providers have capacity and are willing to invest in clients to gain an edge in this market. Most of the near-term deals will more likely be captive acquisitions like the two mentioned above, but this is the clear strategy some of the providers are following to build out a global delivery infrastructure. (Hey - I managed to avoid saying lift n' shift).
Recent Comments