‘Best practice’ is failing HR in the digital age, says expert

digital age
Bianca Healey

By

written on April 19, 2017

HR is in danger of extinction, says Sylvia Vorhauser-Smith, senior vice president of research at talent management software company PageUp and speaker at the upcoming AHRI Adelaide State Conference.

Um, that’s sounds dire. Couldn’t you have waited until I’d finished my cereal before you told me that?

Well yes, agrees Vorhauser-Smith, but it’s a reality being faced by workers across the pay scale – from lawyers to truck drivers – as the workplace faces its biggest transformative change since the Industrial Revolution.

And while HR is uniquely-placed to transform itself, she says, the profession must act now.

In her newly released book Cliffhanger: HR on the Precipice in the Future of Work, Vorhauser-Smith draws on extensive research by PageUp to argue that HR “has reached a nexus point – it’s kind of a “do or die” scenario now for HR and a real wake up call.”

The book’s title may be dramatic – Vorhauser-Smith agrees it’s heavy on the ‘shock factor’ – but the fact of the matter is this conclusion simply reflects the data.

“HR has been grappling with these issues of transformation for the past decade now. And the talk just hasn’t materialised into action for HR to be a true business partner.”

Survival comes down to two things, she says. One is a shift in mindset and another is a shift in the pathways and skills we implement to make change happen.

A mindset shift: from “people person”, to people expert

HR managers need skills in finance, marketing and technology to move the levers that make an impact on business, says Vorhauser-Smith.

“It’s not good enough anymore to go into HR to say ‘I’m a people person, I really love people that’s why I joined HR.’ That’s not what business wants, that’s not what the workforce needs.”

It’s a statement reflective of PageUp’s findings when looking at how many organisations view HR.

“We still constantly hear ‘HR is not aligned with the business’; HR doesn’t add the business value that business managers expect’, ‘they’re not forward-thinking in terms of predictive workforce planning’,” she says.

“We’re still hearing that business just can’t rely on them to be able to match the human capital needs of the future with the business needs of the future.”

Best practice: a rule of thumb or an empty epithet?

Further to the need for HR to evolve beyond outdated perspectives, says Vorhauser-Smith, the “blind reliance” that we place on best practice processes is no longer supported in the digital age.

One chapter in Cliffhanger gives the example of performance management; an HR responsibility that has had its flaws exposed in the digital age. There’s still the expectation that the old best practice processes will solve the problem, she says, but to rely on them is “a nail in the coffin for HR”.

“When business people see HR rolling out the same formula: ‘here’s the best practice model for performance management that we’re going to use, or here’s the change management model’ their eyes just glaze over – they know it doesn’t work and they know it doesn’t have an organisational impact.”

Educational and learning need to equip HR to succeed in the digital age

Vorhauser-Smith suggests AHRI are well-placed to be leading this charge with their drive towards certification of the profession through the AHRI Practising Certification Program. This needs to be driven home in the education and government sectors, where the feedback she gets from HR practitioners is that “the education opportunities available to facilitate HR stepping up to that next level still aren’t there.”

“HR education has been built on an industrial model of HR that is essential so that “professionals know how to play the game,” but in her opinion should simply constitute “HR 101 – and it should be covered in the first semester.”

“The rest of it should be about what it takes to actually support organisations build their businesses through human capital in the future. The pace of change just doesn’t give us the luxury of doing things the way we’ve done them before.”

Cause for optimism

“I’m an optimist, I don’t think HR will disappear but it has to change,” says Transdev people and culture director Paul Birch, whose industry is facing imminent change with the rise of driverless cars in the public sector.

He believes HR’s role in business in the digital age is actually becoming more critical but “if we fail to deliver in the business, the simple fact is the business will find an alternative.”

Hear Sylvia Vorhauser-Smith and other AHRI experts speak at the upcoming AHRI Adelaide State Conference.

Registration closes on Thursday 27 May, CLICK HERE to book your spot.

Don’t miss out on more great content like this.

Comment

10 thoughts on “‘Best practice’ is failing HR in the digital age, says expert

  1. Hi Bianca,

    Great article and I endorse most of what Sylvia has to say. HR is indeed at the crossroads and needs to align their people management practices to business outcomes. The most challenging part of all this is to change the mindsets of the HR profession.

  2. Two points to make:
    1. There are many forecasts being made about a multitude of occupations that will become redundant due to technology. It is unlikely that all of these occupations will be affected as predicted, or at the speed being predicted. Whether HR is affected remains to be seen.
    2. We are an increasingly bureaucratic society, wrapped in red tape. This is unlikely to diminish. HR is not immune to this. Industrial Relations law is incredibly onerous and complex. Hence, the transactional nature of HR will never go away because businesses require trained HR/IT persons to navigate them through those difficult waters.

  3. It’s a time of increasing change, increasing uncertainty and there is a lot written around the increase in stress and anxiety people experience in our modern age.

    In these time HR should become more important but your right we have to change the way we do things. Too often HR is at risk of not working with the business but thinking we know best.

  4. I hope the old HR function of administrative work practices dies, where the HR office is located at the bottom of the building next to the car park. If HR professional don’t realise that their job is more than screening resumes and sending happy birthday notices or giving themselves inflated titles like Acquisition Managers, Diversity Managers but are not part of leadership decisions, then let the function die.
    HR has to be working along side executives, managers and workers to create a better, more effective and happy workplace, as we manage people not paper or technology

  5. Seriously? Been reading attention seeking headlines like this for last 20 years! As long as any function remains relevant to the work they produce & consistently adds value, they will always be relevant.

  6. Thanks Bianca for the article and to all those already providing insightful commentary.

    In case the impression created here is that the future of HR is skewed toward ‘dire’, please let me me add, our research also indicates that never has the importance of human capital to organisational innovation and performance been greater, and therefore, the criticality and potential of HR’s impact been higher.

    This sets the foundation for the debate about HR’s future relevance to tip strongly in favour of the affirmative. The call to action for HR points to (1) the need for 21stC HR intelligences: digital, cultural and business intelligence; and (2) the elevated urgency required to obtain them.

    1. Thanks Sylvia for taking the time to speak with HRM the other day and thank you to everyone who has contributed to the discussion so far.

      These additional points are important to note; I think this offers a really good starting point for a follow-up article about the importance of HR to future organisational innovation and performance.

  7. There is nothing new in any of this – since the term “human resource” was first coined back in the 1980’s, there has been a continuous dialogue about how HR has to get more business-focused. Then of course, a decade ago, the term “HR Business Partner” was introduced, apparently to make it more obvious to HR people that that was what they were supposed to be doing. More recently, we are seeing the words change to “People and Culture”which I like better but the question is “has anything really changed in what HR does and what impact it has on business outcomes?” What HR does and how it operates is largely a function of the management culture of an organisation and, given that the management culture in most Australian organisations is primarily about risk minimisation and cost control, how can HR be about anything but compliance and transaction processing? What is needed is a culture of leadership that transcends management process and engages people to motivate them to deliver high performance outcomes. That is the real challenge for our profession – to take good management practice to great leadership and become more effective at building and managing relationships not just minimising risk and administering process.

  8. Hi. I read all the comments with interest and all of you touch on a slightly different point. I don’t believe that HR will become redundant. As per your previous comments HR is not just about administration functions but we are the People and Culture guardians. The HR professionals realise that we need to be involved in business decision making, strategic planning etc but not all the executive management do realise how much HR can contribute and make a difference. There are organisations that are going with the progress and do realise HR is a business partner, they revamp their expectations of HR inline with the new/modern approach and they do become very successful. On the flip side you have a lot of stubborn, old old-fashioned and know it all CEOs who do not want the change (talking about change management…) and prefer to run things the old fashioned way. Quite often purposely keeping HR in the dark about major decisions or ignoring HR by not asking their input. These are the companies that will fail. It’s up to us to leave the organisations that don’t show much respect to HR functions and go elsewhere. This could be one way we could force the new approach onto the organisations.

  9. I’m not an HR professional, but a (semi retired) CEO of over 3 decades. Human Capital is the creator of value in an enterprise, yet it has been relegated to 3rd place behind IT and Finance. That is partly the fault of CEO’s, but also the CHRO. There’s a great article in the 2017 Harvard Biz Review must reads discussing how the CHRO can become a pivotal creator of value in the future. Using some enterprise productivity tools we have acquired and a think outside the box approach that is what our team is doing. Looking for HR professionals who want to push the boundaries if that’s you. I am at linkedin.com/in/ian-jones-a936a411

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