If you look at the balance sheets of
top 1000 companies worldwide, the tangible assets have dropped in S&P market value from 68% in 1985 to an average of 13% today.
What does this tell us? The tangible assets no longer represent the thing to
focus and do not necessarily translate to competitive advantage.
HR started evolving from a time sheet
and salary disbursement activity to a move evolved comprehensive learning based
function. Like any other function, HR too has transformed to applying
analytics. In the process, most of the traditional areas have either gone to
the fringe of the HR circle or moved away to other parts of the organizations.
Here is a quick summary of all those, considered once the core of HR, being
moved out:- Recruitment, especially the fresher / campus hiring
- Induction of employees
- Training, Learning and Development
- Regular hygiene activities – Time sheet, salary, leave etc.
- Benefits management
Does it make you wonder what the HR
function is responsible for? Try speaking to any senior HR person and ask them about
it. If they start to unleash a large mouthful with long-winded sentences, read on:
A very
fascinating finding of Gallup’s research on the employee experience reveals
that organizations rarely meet people's basic needs at any
stage of the employee life cycle. < 15% of the employees feel fully engaged
with the organization! This may appear counter-intuitive with the high number
of HR executives and CHRO walking around, holding various meetings, birthday parties, festivals and town halls. In fact, this clearly demonstrates
the quantum of people in HR function may not translate to looking after the
“competitive advantage” of the enterprises!
The converse could also be true. It is possible that the CEO or other functional leaders remember HR when people
are not productive or the attrition % has shot up or an important person quits.
A pity indeed! Instead of holding HR accountable for attrition, try doing the
reverse. Ask HR to analyse why people stay in the organization for whatever duration they stay! If you have a few minutes, try reading Sandy Gordon - an eminent sports psychologist who transformed many sporting units, especially Australian cricket, into a fighting machine. He advocates replication of those factors or winning conditions that are essential for victory. Instead of whipping up the people for losses by doing endless root cause analyses, find out under what conditions people have flourished and tranformed their capabilities into a competitive advantage! In short, analyse the wins and the success factor more than the failures!
As
leaders, what need to change?
Start
with the belief that HR has the same set of metrics as the overall organization
whether it is profit or growth or a combination of them. Shed the mentality of
HR that it is possible for HR to succeed when the rest of the organization
bleeds. It is true that there are unique metrics / KPIs that describe the
outcome of HR. But they are eventually linked to the organization’s goal.
Like
other ingredients that go into delivering the final product or service, treat
HR as another important one. The “HR” cannot be applied on top of other
functions or can be called last minute to do some cosmetic arrangement. That’s
a sure-fire way to fail fast! HR is as integral as marketing or production.
The one
thing that matters is the employee engagement / experience. All other metrics
that tom-tom the success of HR are mostly irrelevant from a medium to long term
perspective. Consider this. In a given month, ramping up 500 people with
specific skill sets could be a KPI. Meeting this number is a must so long as
this is in line with part of the annual plan. But meeting this is only a part
of the HR journey. For example, if the employees are not engaged that manifest in multiple ways, HR should be worried! If, out of the 500 who joined the organization, only 40% are engaged and productive, HR must stand shoulder-to-shoulder with business to ask WHY. HR should be enabled to invest in
suitable data collection mechanisms across the organization / industry and
arrive at meaningful insights for employee engagement and experience.
Sometimes, HR has more data than what is required or unable to make use of it.
In
today’s world, HR is not confined to one person or a group of persons sitting
in a particular corner. To the employee, his or her touchpoint with the manager
acts as the HR interface. The employee sees the reporting manager as part of
company’s HR. To that extent, these people can be the best friends of HR. If an
employee is happy or otherwise, it is most likely that the managers would be
the ones to notice it first. Make the HR accountable for employee experience
not for setting up a medical facility within the premises. Congratulate HR if
year after year your employees keep adding more and more value to your
customers and thereby to your shareholders. Reward HR if your employees
regularly update skills, learn proactively and contribute more deeply to
customers making their tenure an enriched one.
References:
https://research-repository.uwa.edu.au/en/persons/sandy-gordon