HR Transformation:
Progress Made But the
Journey Continues
Neil Reichenberg
IPMA-HR Executive Director
If HR professionals want to keep their
jobs and increase their influence, they
must focus less on what they do – their
processes and systems and more on the
value they can deliver to the
organization.
• David Ulrich
Background
Why We Hate HR - 2005 Fast Company
article
“After close to 20 years of hopeful rhetoric about becoming
strategic partners with a seat at the table where the
business decisions that matter are made, most human
resources professionals aren’t nearly there. They have no
seat, and the table is locked inside a conference room to
which they have no key. HR people are, for most practical
purposes, neither strategic nor leaders.”
Background
“The discipline I believe so strongly in is
HR, and it’s the last discipline that gets
funded. Marketing, manufacturing – all
these things are important. But more
often than not, the head of HR does not
have a seat at the table. Big mistake.”
• Howard Schultz, Chairman, President, & CEO of
Starbucks
Background
Why Did We Ever Go Into HR?
2008 article in the Harvard Business Review by
two recent Harvard MBA’s who work in HR
“HR today sits smack-dab in the middle of the
most compelling competitive battleground in
business, where companies deploy and fight over
that most valuable of resources – workforce
talent.”
“The long held notion that HR would become a
truly strategic function is being realized.”
World Public Sector Report
2005 UN World Public Sector Report,
“Unlocking the Human Potential for Public
Sector Performance” called for a heightened
role for those working in human resources
Staff responsible for human resources “should
have real input into strategic decisions about staff
management as well as decisions on how to
achieve core objectives of government. This calls
for the upgrading of the status and influence of
human resource managers in organizational
structures and decision-making processes in the
public sector.”
State of HR
Most organizations recognize their employees as their most
important asset.
“The right talent is the fundamental building block when it
comes to creating an organization capable of innovating and
changing…”
Ed Lawler, Director, Center for Effective Organizations and
Professor, University of Southern California
HR is the only department that has the people of the
organization as its primary mission
The recession has resulted in a short-term focus on reducing
costs - this should not result in abandoning longer-term
workforce and succession planning efforts
How Are Organizations Treating
Their Most Important Asset?
Recent IPMA-HR survey showed agencies taking the
following actions to address budget issues:
Restricting travel – 66%
Hiring freeze – 62%
Pay freeze - 59%
Reduce overtime - 56%
Reduce training - 56%
Layoffs -33%
Change retirement plans - 21%
Employee Engagement
Why is it important?
Employee engagement is associated with a range
of positive outcomes at the individual and
organizational levels
Engaged employees perform better, are more
innovative and more likely to want to stay with
their employer
Main drivers of engagement are: meaningful work,
senior management communication style and
vision, supportive work environment, person-job
fit, and line management style
Employee Engagement
Watson Wyatt/WorldatWork survey found that due to
actions taken by employers during the recession,
employee engagement has declined
Employee engagement has dropped 9% since last year for
all employees & almost 25% for top performing employees
Top performing employees are 20% less likely to agree that
they understand the link between their goals and the
organization’s goals
Employee Engagement
Drop in employee engagement could have a
detrimental impact on productivity, quality &
customer service
As the economy recovers, there could be
retention problems for employers, especially
among top performers
Compared with last year, top performers are 26%
less likely to be satisfied with the opportunities for
advancement & 29% say promotion opportunity
would be a top reason for leaving
HR Transformation
Managing and developing the organizational talent is
of paramount importance
HR needs to shift focus to strategic activities that will
add the most value and ensure that organizations
have the right people, with the right skills in the right
positions, at the right time
HR needs to avoid falling into the trap of changing
names and delivery mechanisms that result in
providing the same HR services
HR Transformation
HR needs to continue to provide the basic
human resource services on which their
organizations depend
If these are not done well, HR department
will lose credibility & it will be more difficult to
move to a more strategic role
There has been a move towards shared
service centers that are established to handle
HR transactional work
HR Transformation
It is a challenge to find time to move to a
more strategic role, while continuing to
provide high quality HR transactional work
Human resource management is an
organizational responsibility and not just the
work of the HR department
HR professionals should be consultants to the line
managers and supervisors
HR needs to understand the business of the
departments within the organization
Changing Roles of HR Management
1–15
HR Transformation
Chartered Institute of Personnel & Development
(CIPD) in Great Britain study found HR plays multiple
roles in organizations
Recruit & retain key staff
Develop employee competencies
Improve the way in which people performance is managed
Maximize employee involvement/engagement
Improve employees’ focus on key business goals
HR Transformation
81% of CIPD survey respondents
reported the structure of the HR
function has changed
Top reason was the desire for the HR
function to become a more strategic
contributor
Need to improve services, increased
business focus, & cost reductions were
other reasons cited
HR Transformation
Compared to a similar survey three years earlier, HR
staff has cut by a quarter the amount of time they
spend on administration & almost doubled the
amount of time devoted to strategic matters
However, HR function is still mired in transactional
work
5% see HR administration as most important activity, yet
52% said it was most time consuming
Developing HR strategy most important activity cited by
64% of respondents, but only 28% say they spent the most
time on it
HR Transformation
IPMA-HR study found the key enablers of
transformation are:
Strong management support
Strong internal skills
Appropriate funding levels
Highly integrated IT systems
Shared services
HR Transformation
IPMA-HR study found the key barriers to
transformation are:
Lack of funds
Lack of management support
Poor IT systems
Lack of skills/capabilities
HR Transformation
IPMA-HR study found that organizations
are measuring transformation success
by:
Higher customer satisfaction (only 37%
conduct internal customer satisfaction
surveys)
Cost reductions
Higher retention
IPMA-HR Model
To assist HR professionals to transform the HR function, IPMAHR has established a competency model containing 20
competencies that serve as the foundation for HR professionals
as they execute their work inside four major roles:
HR Expert
Business Partner
Change Agent
Leadership
IPMA-HR has a training program, Developing Competencies for
HR Success designed to assist HR professionals with becoming
business partners, change agents, and leaders within their
organizations
IPMA-HR MODEL
Business
Partner
HR
Expert
Leadership
Change
Agent
Shaping Up: Evolving the HR Function for the
21st Century, conducted by Deloitte, the
authors concluded:
“HR is at a turning point. During these times of
rapidly changing economics, we believe HR is
faced with a stark choice. It can either evolve and
make a significant contribution, or be diminished
and dispersed into the business.”
Conclusion
HR is moving in the right direction, although more
needs to be accomplished
Organizations are at different stages of
transformation
HR profession needs to continue evolving & focusing
on important contributions it can make to the
organization
No simple answer nor is there a one-size-fits all
approach that will work across organizations
HR needs to develop better measures of its
effectiveness & impact
Additional Information
For additional information, please
contact:
Neil Reichenberg
Executive Director
IPMA-HR
nreichenberg@ipma-hr.org