Issue link: http://www.e-digitaleditions.com/i/94708
Captains of Industry achieving entry into a new area of business? This is what an HR director should be doing." Unfortunately, she adds, "They're a very rare breed, indeed. You need to kiss a frog before you can find someone with the capabilities to deliver." Spink blames this difficulty on the still-fresh evolution of HR. "If you roll back 10 years, companies were taking HR out of the functional tasks and putting them into the business units to become HR/ business partners, but at the time they just didn't have the skills," she explains. "You can't take someone who has been trained entirely in terms of a particular function and then expect them to develop by osmosis. Now we're in the second cycle of this, getting HR into the strategic position, one step ahead of where they were as business partners. Many are still used to being policemen of the services, rather than managers of information to run the business." Getting There Slowly On the bright side, more companies now perceive the HR function as increasingly strategic, according to the PwC/Saratoga 2012/2013 US Human Capital Effectiveness Report. "As the HR function grows more global and strategic, it must add not only people with new and more advanced skill sets, but also technology to enable the transformation," the report states. Despite the relatively slow economic recovery, the report's authors note that per-employee investment in HR increased nearly 8 per cent, from $1,495 in 2010 to $1,610 in 2011. "We expect this increased investment in the HR function to continue in the foreseeable future as HR moves up the maturity scale," the report states. "A higher- functioning HR organisation requires more investment, but is expected to deliver a greater long-term return." What will it take to reach this long-term goal of HR as a transformational engine of the business? The experts believe that the standardisation of HR processes need to become looser, while the measurements of outcomes need to tighten. The big push toward process standardisation five years ago was focused on creating consistency and eliminating non-value added variations, Goldstein notes, and in response many HRO providers created standard global processes accommodating local variances like regulatory requirements. "Deploying standard processes did achieve the desired short-terms goals, such as a reduction in variation, an increase in operational efficiency and a reduction in cost per transaction," she explains. "The shortcomings were that the standard processes may not have reflected the way that consumers wanted to access services, and the specific requirements they had." As a result, Goldstein says the pendulum that once swung far to the right around standardisation is now moving in the other direction—in effect, loosening. "Where it makes sense, we now see variations around location, level in the organisation, and workforce segment," she says. Spink has a similar perspective. "There was this huge rush for standardisation and the one-to-many model, but I just didn't buy it," she says. "A business needs to be focussed on transformational change and efficiency—to understand the many things they need to do differently for a reason and the catalysts of that. The one- to-many model or standardised processes run into different terms, conditions, regulations, and legislation in different districts, which is then complicated by acquisitions and mergers in different parts of the world. It's an ill-fated quest." Spink doesn't dispute that there are benefits to streamlining, "but a single global policy for recruitment or maternity leave is not real for everyone," she says. "There are reasons to do it this way or that way, and the goal should be to understand the variation. Standards by countries and divisions make sense, but by location and department not necessarily." In short, standards will remain bespoke for the time being. As Foster says, "We have a better sense of good practices and bad practices, but we still have a long way to go. It's just natural for organisations to slip into non-standardisation when confronted with chaos." Better metrics, on the other hand, will help HR walk the walk to the boardroom. The experts weighed in on a variety of efficiency measurements, including administrative time, accuracy, and cost per transaction and/or per employee, but as Janssen points out, "We are all still in the process of inventing how best to measure the effectiveness of HR processes." Goldstein has another view. "As we've grown and matured as an industry we've realised that efficiency measures mean nothing if they don't accomplish the intended business objective," she says. "Therefore, metrics must be gated around a parameter that says it must first meet a business objective. For instance, hiring someone in record time and for a low cost means nothing if the new hire doesn't meet the broader business objective of obtaining a specific skill." It is this skill, of course, where the rubber meets the road—human capital squarely aligned with strategy. FALL 2012 | www.hroglobal.com [13]