Forward-thinking leaders of change or stuck-in-the-past resisters of change. Which phrase describes today’s human resources professionals? Serious HR practitioners aspire to the first description, but a new report warns that the profession is in need of an “extreme makeover” to ensure it can meet the engagement, leadership, development, and other challenges facing today’s workforce.
The Deloitte Global Human Capital Trends 2015 report assembles research that includes surveys and interviews with more than 3,300 business and HR leaders from 106 countries. The No. 1 challenge identified in this year’s report, released in March, is a lack of employee engagement, followed by leadership gaps, and a need to accelerate corporate learning. And to address those challenges, the report calls for a reinvention of HR.
“Both HR and business leaders, on average, rated HR’s performance as low; furthermore, business leaders rated HR’s performance 20 percent lower than did HR leaders, showing how important it is to accelerate HR’s ability to deliver value as the economy improves,” the report’s introduction states. “Perhaps because of these dim views of HR’s performance, we found an increasing trend of CEOs bringing in non-HR professionals to fill the role of CHRO” (chief human resources officer).
The report’s introduction concludes with some friendly counsel for HR professionals. “Our advice is simple: Jump into the fray with enthusiasm. Seize ownership of these challenges and show leadership in addressing them. Make 2015 a year of bold leadership in helping your organization thrive in this new world of work.”
Pressures and opportunities
The research says today’s business imperatives call for a new organizational model for HR and a “massive reskilling of HR professionals around the world.” Today’s business environment represents both pressures and opportunities for HR and sparks soul-searching questions for practitioners.
“Faced with these new pressures and opportunities, how do our respondents rate HR’s performance?” the report states. “Unfortunately, not very highly—and not significantly better than in past years, as evidenced by HR’s stagnating ‘grade point average’.”
The report says that research shows just 30 percent of business leaders believe that HR has “a reputation for sound business decisions; only 28 percent feel that HR is highly efficient; only 22 percent believe that HR is adapting to the changing needs of their workforce; and only 20 percent feel that HR can adequately plan for the company’s future talent needs.” Also, the Deloitte survey shows that just 11 percent of respondents feel that their organizations provide “excellent” development for HR.
“To put it bluntly, HR is not keeping up with the pace of change in business,” the report states. “Today, there is a yawning gap between what business leaders want and the capabilities of HR to deliver, as suggested by the capability gap our survey found across regions and in different countries.”
CEOs and other senior executives surveyed reported being concerned about talent in their organizations, and 80 percent named their company’s lack of HR skills as a significant issue affecting the talent situation.
Innovation is a key factor in the makeover organizations think is necessary for HR. The report notes that “traditional HR practices such as performance management and leadership and development are undergoing radical change, forcing HR to throw away the old playbook and deliver more innovative solutions.”
The way HR leaders are being chosen is another component of the HR makeover. The report notes that research shows that nearly 40 percent of new CHROs now come from the business side of the organization rather than the HR department.
“In this era of rapid business change, the role of the CHRO becomes radically different and more demanding than ever,” the report states. “Today’s CHRO must be innovative and business-savvy and be able to stand toe to toe with the CEO.”
What to do
Besides pointing to shortcomings, the report makes suggestions for how companies can launch an HR extreme makeover.
- Redesign HR with an eye toward consulting and service delivery. “HR business partners must become trusted business advisors with the requisite skills to analyze, consult, and resolve critical business issues,” the report says.
- Instead of locating HR specialists in central teams, the report authors suggest embedding them into the business. “Recruitment, development, employee relations, and coaching are all strategic programs that should be centrally coordinated but locally implemented,” the report states.
- Create an HR talent and leadership magnet, the report urges. If people are “accidentally” moving into HR, the organization may suffer. “Create rigorous assessments for top HR staff and rotate high performers from the business into HR to create a magnet for strong leaders.”
- Focus on professional development for HR. The report advises organizations to create HR universities and invest in professional development “to make sure your HR team is constantly sharpening its own saw and developing the necessary skills to survive.”
I would like to play devil’s advocate. I submit that the lack of progressive thinking on the part of corporate HR has more to do with the leadership of the corporation than it does with HR itself. In some organizations, HR becomes important only when someone needs something. Until then, they are the “poor second cousin” who is not given the resources or responsibility they need or want to be progressive and forward thinking. HR depts. are notoriously understaffed in comparison to sales, marketing, technology, development or other areas of a corporation because they don’t produce income that can be quantified. They are also constrained by many government regulations that these other areas don’t face.
HR=DA.
I will address this readership as a formally educated and rational thinking group of corporate leaning individuals.
Human Resources is a corporate version of a “Defense Attorney” for the sole interests of the employer.
Any reference to employee concerns is only a means to an end of limiting exposure to the corporate concern.
I am stating this as bluntly as I can in order to challenge any reader to support these statements or deny them with any examples they feel appropriate.
However, if those that defend the HR department as ever taking the employee side over corporate, I defy you to prove that you were formally admonished by a C-level executive or given any kind of incentive to do so.
HR “Extreme Makeover” Great Opportunity and great challenge. Time to stir it up a bit and to stand up against the status quo. As HR professionals we see from the inside what needs changed and many of us spend valuable time not accepting that processes become a routine, for instance Health Benefits and dealing with insurance companies that have taken on a Government mentality rather than being interested in fixing a broken process. It would be great to see progress move forward by not accepting “It is what it is” and become part of changing things by “Let’s try this.”
I wholeheartedly agree with C. Huddleston’s comments.
I agree with C. Huddleston 100%.