Issue link: http://www.e-digitaleditions.com/i/136276
Thought Leaders Going forward, the outsourcing providers say more emphasis needs to be placed on the development of efficiency measurements that do more than just quantify the cost-effectiveness of different HR services. have a board where there was no CFO or director of finance sitting on it," she explains. "It's unthinkable, yet why is it the case that so few HR directors are board directors?" She answered her own question: "Executive leaders and board directors tend to perceive HR as being all about administration, reporting on tasks like benefits and payroll with a backward looking view. This legacy has resulted in a set of people who have grown up with skills that are not strategic in nature. The solution is to hire individuals with strong leadership, commercial, operational and strategic skills to lead HR. They can then apply these skills to talent management, performance management and workforce logistics." The best HR leaders fit this mold, Spink says. "I've worked with some great HR leaders and what made them great was that they were astute business leaders first, chosen to specialise in HR rather than someone with a legacy HR background." Foster has a slightly different perspective. "If the role of the HR director is simply to represent the HR function, then he or she should not sit on the board," He says. "But, if the role is to represent human capital in the context of business issues, then there is a need for that person to be on the board." Obviously, HR outsourcing is a vital component in the hunt to align human capital with business strategy. By liberating HR from functional responsibilities, HR directors and staff can focus on the strategic value they can provide the organisation from a workforce standpoint. "We are not about just doing payroll cheaper," says Howard Nelson, global director, HR and learning solutions, at IBM. Towards this end, providers are seeking to standardise HR processes across divisions, departments and geographic locations, leveraging technology and reengineering workflows to cut costs and increase efficiency. "Many processes conducted by HR are most efficient and cost-effective if they can be standardised and performed on the basis of best practice approaches," says Foster. Not all processes should be standardised, however, he adds. For example, processes involving talent acquisition, performance management and succession management can provide a competitive advantage to an enterprise when these processes are better than its competitors—hence the benefits of a more customised process. "Fitting into a standard model is counterproductive for certain processes," he explains. Going forward, the outsourcing providers say more emphasis needs to be placed on the development of efficiency measurements that do more than just quantify the costeffectiveness of different HR services. Rather, such metrics must be linked to strategy execution. "Metrics must be gated around a parameter that says it first must meet a key business objective," Goldstein says. "Hiring someone in record time and at a low cost means nothing if the new hire doesn't meet the broader business objective." Spink agrees that metrics must address the execution and hoped-for completion of a project or other business initiatives. "Otherwise, you're just measuring the efficiency of the HR department again, which gets us back down in the mud with HR administration—the wrong place to be," she says. "The goal in measuring anything should be whether or not the business objective is being met from a human capital standpoint. Has talent been up to the task and if not how can we react nimbly to this realisation? "You can't maximise human capital assets without measuring their effectiveness," she adds. "And you can't manage what you don't measure." Russ Banham can be reached at www.russbanham.com SPRING 2013 | www.hroglobal.com [21]