Challenges for HR

Challenges remain for HR to truly deliver value. Using the Ulrich and Brockbank criteria set out would be a good starting point to frame a discussion on HR value add. Similarly, engaging colleagues in HR and other parts of your organisation in thinking through the four drivers of value presented — identifying what HR does well/ could do better would also be an excellent starting point. Whichever you use, the important point is that you do something to understand what stakeholders in your organisation value about HR and to identify what HR can do to raise its contribution. So that is the first challenge: Ask your stakeholders what they value about HR.

In our discussions with senior practitioners we identified four other challenges:

Challenge 2: HR must understand the critical drivers of success in their organisation. How do HR professionals see their world? When we talk about our organisations do we see them through an HR lens or a business lens? An example given to us by one of our practitioners referred to a meeting they once attended when a senior group of HR business partners were each asked to present their business unit to their colleagues to build understanding of the whole business. Clearly this is a worthy objective! However, what was presented focused on headcount numbers, payroll costs, organisation charts, spans of control and turnover. There was no focus on strategic goals, critical business issues, change challenges, leadership capability/bench strength, etc. This is a good example of changing the way we think about what HR is and ensuring that we understand what makes our organisation successful.

Challenge 3: We need to change the way we engage with our stakeholders. So many HR professionals still struggle with the notion of peer or upward challenge. HR pulls its punches and this is not healthy nor will this approach help us add value. As Frances Allcock (BBC) put it: 'we need to bring a way of thinking and working that is future orientated, commercially focused and data driven so that we change the conversations we hold with business colleagues. We need to be prepared to challenge, bring fresh thinking to the table and be courageous. Rather than undermine relationships, this approach will build relationships as it is based on getting the best outcome for the business and we all want that'.

Challenge 4: HR needs to shape and not just implement the change agenda. As we enter a period of unprecedented economic change and uncertainty, the ability of organisations to change quickly and purposefully is even more critical. Knowledge sharing, collaboration, creativity/idea generation and capture are also significant challenges faced by many organisations. We know that most change efforts fail to deliver the anticipated benefits because organisations do not get the people side right. So there is much to play for. We also know from our review of recent research that equipping HR professionals so that they are skilled to play this role remains a challenge.

Challenge 5: We need to keep working at delivering transactional and process value. For those HR functions that have already delivered significant savings, the ongoing challenges are to:

• keep refining the cost base to realise further productivity gains;
• assure data integrity through quality controls;
• deliver information in a 'manager-friendly' way;
• provide timely and accurate advice — whether through on line or help desk support;
• deliver real data insights;
• produce stronger, data driven, business cases showing how proposals will impact organisational performance (including financial impact).

We believe that there is still much to be done in driving process value. As generation X becomes generation V (virtual) this personalisation of processes will become even more important. Process value will not just be the domain of the HR function either, it will also challenge managers to create the climate (on-boarding, recognition, freedom to perform, releasing people's skills and talents, etc.) for people to succeed.

How might you respond to these challenges? Here are some suggestions:

• Think of your organisation, the context it finds itself in, its overall goals and some of the dilemmas you may need to work through, for example, you may be asked to reduce headcount and raise levels of employee engagement. Then use the four value drivers to identify what areas are most likely to drive value in the short and medium term.
• Consider who you are driving value for. As the Lepak research suggests there are likely to be multiple stakeholders and you need to think what matters to each. If you do not know, think about how you might find out, for example, if you do not normally get exposed to what investors want talk to investor relations or colleagues who may know.
• Think about relevant measures of value. This is not about 'measurement frenzy'. Identify a small number of lag (measuring the past, e.g., profit per employee) or lead (setting goals to be reached in the future, e.g., to be recognised as one of the top 50 best places to work within 3 years) measures.
• Engage with relevant people in order to identify how to move work forward in this area and how to put in place an appropriate range of measures.