Monday, 23 August 2010


The effects of the relatively recent downturn are bit by bit weakening, consumers are regaining confidence, and the number of organisations which are re-emerging from the crisis is creeping up.

After a period of recession, savvy companies which have been barely able to resist and stay in doing business as usual, try to immediately apply the lessons learned.

Some organisations, in particular, are used spend to excess during flourishing economic periods and do not putting anything aside when the sun is shining. The first lesson is then: minimise costs, whilst trying to maximise productivity and results, which could apparently, but only apparently, sound as a contradiction in terms.

As a matter of fact, business leaders are now becoming the more and more demanding and calling for increased effectiveness and efficiency from their management and structures.

HR is no exception, on the contrary, HR is one of those functions, arguably the function, from which business leaders are now expecting more.

Amongst the main priorities, business leaders are now expected that HR will be able to effectively contribute to:

- Growing the bottom line of their organisations,

- Determine the correct need for talent and the kind of skills those talents should have and bring to their organisation,

- Recruit, retain and develop the best candidates (it would really make no sense being able to recruit talents and being, then, unable to retain them) and performers.

It is just thanks to these best performers that some organisations have been able to emerge from the recession in good form and maintain their competitive edge, especially in comparison with those companies which, although able to survive the downturn, have remained considerably damaged.

We all know that HR has a crucial role in the activities described above, and to effectively carry out its job and mission HR needs to transform and connect, or in some cases reconnect, with the overall business, in particular supporting and sustaining the organisation in its key areas: vision, brand, financial and employees’ performance.

Although it is widely recognised the influence HR exerts internally, it is, instead, completely neglected the powerful importance that the function could exercise externally.

The recruiting team of each organisation constitutes, for instance, the first contact point for candidates and potential employees; it represents the organisation and to some extent “describes” the organisation itself. Potential employees form their first image and idea about an organisation on the basis of the first contacts they make with this team.

Needless to say, a smart, brilliant team, able to creatively personify the brand and contribute to the development of the employer branding image, will be able to attract top-level candidates.

To succeed in their mission the organisation’s team of recruitment professionals should be able to resort, smartly use and exploit all the latest cutting edge possibilities offered by technology. Either in job fairs, and in social networking websites, and in the press, organisations’ recruiters should be able to effectively use these tools making the job recruitment process an experience, or rather, a positive, enjoyable and amazing experience.

In order to accomplish this job with integrity, HR messages, recruitment policies and those characteristics for which the organisation would like to be known, necessarily need to be aligned. The attainment of such an alignment will permit the organisation to attract not just talented people, but also those people who share the same organisation’s values and ethos.

There really is plenty of work that could be done externally, but also internally HR has till lot to do.

The first thing to do internally is to mend the HR image of being a merely administrative and compliance function. To achieve this aim HR need to gain trust at all levels, from newcomers to senior business leaders. It goes without saying that extra care needs to be paid to HR “fundamentals”: you could not really blame a colleague for not trusting the HR function if he never gets the right salary.

Trying hard to help individuals to promptly find the right answers and, most of all, the right solutions to their problems, could help HR to break out of its compliance role. Taking the role of employee advocate, struggling to help, adapt, arrange and find bespoke solutions, are the most suitable ways to achieve the final objective. Being sensitive to employees need will be surely appreciated by staff, which will start very likely to see the HR Function from a completely different perspective.

But HR could also do much more in order to improve the image of the organisation both internally and externally, such as fostering: leadership development activities, diversity initiatives, health and wellbeing programmes and community service, just to name a few activities.

But HR cannot really go on its way; HRM Strategy and overall business strategy necessarily need to be aligned, in the light of integrity. Attaining this alignment is of paramount importance for the organisation achieving competitive edge.

In many organisations HR does not enjoy yet the status to sit at the “strategy table”, which actually hamper organisations to have a full insight and knowledge of the skills required to manage and keep pace with the constantly changing strategies. According to the PriceWaterhouseCooper’s 13th Annual Global CEO Survey, in fact, 79% of CEOs are rethinking the way they manage change within their organisation, recognising the importance to align HRM strategies with the overall business strategy.

The lack of HR insights, amongst the other negative effects, would prevent business leaders to properly interpret the labour market trends and its likely developments, the educational trends and the impact of them on the organisation resourcing needs.

Of course is not just a matter of business leaders acquiring awareness of the HR function importance to the effective development of the organisation, HR Professionals inevitably need to prepare themselves to take the more strategic role they are called to cover. The risk being that otherwise they will further contribute to weaken trust and reliability on the function.

HR Professionals need to acquire an in depth knowledge of:

- The industry their organisation is operating in,

- The challenges each line of business and product is facing,

- The job positions existing in the different functions/sectors of the organisation,

- The most important core skills and competencies required to properly carry out each role within the organisation,

- The reasons for the company achieving competitive advantage in comparison to its competitors,

- The future likely demographic development and its impact on the local labour market and on the organisation.

Basically HR needs to show business leaders to be extremely competent and able to show its ability at strategic level, including finding and retaining the most suitable talents for the organisation (both in terms of skills and ethos), and to properly manage administrative tasks, achieving very good results whilst improving services and reducing costs.

Dave Ulrich has always claimed that “HR managers acting as specialists” is one of the ways HR can contribute to deliver organisational excellence. HR professionals knowledgeable in the way work is planned and performed can allow the organisation to reduce cost, maintaining quality standards, which is what business executives are actually expected to achieve.

But this is not possibly enough, in order to firmly conquer and keep its strategic role and being able to sit with merit at the “strategy table”; the HR function also needs to acquire a truly understanding of the company financial and business goals, what is now more simply called “business acumen”.

In order to achieve this objective many organisations have already developed a process of transformation of their HR function aimed to link HR investments and capabilities with overall business strategies. The final purpose is to bridge and create a genuinely integrated relationship between HR leadership and senior management.

Organisations are trying to achieve this objective in several ways, such as setting up rotations for HR leaders in other parts of the company and trying to persuade and encourage key business units’ leaders to take leadership roles in HR.

That will allow business leaders to gain a better, in depth understanding of HR and put them in the situation to better find out where HR fits in.

Earlier this year, many organisations, also because of the negative effects of the international crisis, have been cutting HR operations budgets, but an effective contribution of HR to the bottom line deserves much more than a belt-tightening policy.

Dramatically technology improvements have permitted software houses to come up with state-of-the-art products which can incredibly help HR managers and executives to take faster and more effective human capital decisions.

These cutting-edge technological tools help companies to reduce the time they devote to deliver administrative tasks in order to dedicate more time to more adding-value HR activities.

As the economy starts recovering, business leaders realise that they do not need HR to simply perform a high-level administrative activity, but they need to engage HR professionals and units as genuine, valuable, strategic partners. This HR engagement is of crucial importance in order to effectively and coherently implement the overall business strategies, getting the most out of the talent available within the organisation. Put it in a different way, business leaders need great and excellent HR performance. It is very likely that excellent organisations, rely on excellent HR Functions, or put it in a different way: it is difficult to think that excellent organisations do not rely on excellent HR Functions.

Of course business leaders need and like measure and gather evidence, very practically organisations effectiveness and success can just be proved through numbers. Corporate leaders need, in some way, to “quantify” what they get in return for their total investments in human capital.

HR departments are actually used to collect and provide metrics concerning their activities, such as the cost per hire, but HR, in his new capacity as a closer management partner should develop and provide fact-based metrics which should be able to give more and more detailed evidence and measurements of the company return on human capital.

Whilst measuring intangibles results like employee knowledge, corporate reputation and customer relationships is clearly more difficult than measure standard financial reporting, it can definitely helps to find out how an organisation creates value.

Finally, the HR transformation process is already underway, and all the organisations who have not yet started it off should hurry up. It is no longer time to talk, time to action is now, well after having accurately planned what and how to do things and move forwards.
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