The pace of change in today’s businesses is quick, but is HR transformation keeping up? Answering this question can spell success or failure for organisations, says Marc Havercroft, FAHRI, vice-president of HCM Cloud & Digital Strategy and Transformation at SAP.
My recent appointment to the AHRI Council and the growing momentum for HR certification raised some interesting questions in my mind about what, exactly, HR needs to be in a world that’s entering industry 4.0 and the ‘brave new world’ of digital.
My main concern is that as we are seeing the world of work change around us, is HR itself keeping pace?
Most new organisations enter the business world as ‘digital natives’, and they are much more comfortable with the agile thinking and adaptability this requires. But what about our good old blue chip companies? For more established organisations, does the onset of the digital era automatically mean they must rethink everything about HR, from structures to roles?
My answer is yes. I believe we are entering the era when all business will be ‘tech’ companies, from health to banking; this transformation is reshaping how every industry views itself – now and into the future.
The one critical differentiator for all companies will be people, and make no mistake because if HR practitioners are not grasping this now and looking at how they need to be different, then it’s time to do so or risk falling behind.
In my experience with leaders in our industry, successful HR transformation initiatives have six key pillars in common. They are:
Is your people strategy aligned to the organisation’s commercial goals? This seems like a simple one to answer, but you would be surprised how often these two facets don’t mirror each other.
What is your performance management methodology? My personal favourite is objectives and key results (OKRs), which is also what Google uses, but find a system that makes sense for you and your workforce.
What structures should your organisation have in place to optimise its workforce’s output? This means taking a look at your organisational structures and workflow to find kinks in the talent pipeline. Do you need to consider the use of on-demand solutions? Have you considered crowd sourcing to flesh out strategies?
For high-performers, can we maintain that level of performance? What risks do we have, and in turn what can we do better to support our talent? This will differ depending on the employee’s role. My top tip here is that there’s no such thing as a one-size-fits-all solution – everyone, from sales to IT, will have a different plan.
You need to approach this from the angle of future talent supply, but also look to double down on investment in already existing talent. I see it as ‘buy to build’: you need to invest in learning and development for existing employees that is geared towards building their capabilities with relevant content for your business.
With such a fluid workforce comes reward, yes, but also risk. Establish clear frameworks of trust. A top tip here is this is not ‘policed’, but needs to be part of the culture of the business, with particular focus on first-line management.
Another key observation has been the use of data-driven decisions for HR transformation. More than ever, HR is tasked with becoming the trusted source for workforce analytics. That comes down to simple facts such as how many employees are in your organisation (surprisingly hard for some people to answer), and grows outward from there.
When thinking about people analytics, I’m reminded of the film Money Ball. The first step needs to be figuring out what questions you need to answer. This will then give your efforts focus in a world inundated with big data and enable critical insights into the ongoing engagement of your talent.
From there, my final observation I want to share is to treat HR transformation as an infinite journey – always review, be on the front foot and stay a step ahead of the game. Don’t wait to get started, or it could be too late.