Seven Irresistible Forces | Context

While thinking about the new world of HR, it is important to recognise that there are a number of external forces that will shape the future.

In the first edition of this book we listed, what we termed, seven irresistible forces. In 2005 this was a bold claim. Some years on now we have revisited this list to test whether they have, in fact, been irresistible. We can confidently state that they are as relevant now as they were then. In many ways these forces have been strengthened. So, as part of the envisioning process, these forces form an important part of the context within which the new world of HR is envisioned.

These seven irresistible forces are as follows:

1. Technology will play an increasing role in the way HR delivers value.
2. HR processes will continue to standardise around technology.
3. The HR administrative backbone will increasingly be delivered by centres of expertise (whether in-house shared service centres or outsourced service centres).
4. The shape of the in-house HR function will continue to change and HR staffing levels will continue to decline, with the headcount profile shifting from administrative/advisory roles to higher value decision support/specialist/strategic roles.
5. The delivery of HR management in organisations will continue to disperse across each of the delivery channels.
6. The need for HR professionals to bring a unique value proposition to internal clients will increase as line managers become more confident with self-service tools and seize opportunities for genuine choice in sourcing professional HR support.
7. The outsourcing and/or offshoring of transactional, administrative, advisory and specialist HR activity will continue to increase.

Context | What Is HR's Value Proposition?

Terms such as 'value adding' and 'value creating' are much used in organisations and have become by-words that articulate what HR transformation is seeking to achieve. 'We want to move from transactional to "value adding" HR' is a typical, and justifiable, aspiration for HR transformation. It suggests that even though HR professionals are currently delivering worthwhile work in organisations there is still something missing: a contribution to key business challenges that is not being made currently; contributions that will make colleagues sit up, pay attention and find valuable.

Ask a line manager or business leader what they value from HR and you are likely to get a divergence of opinion. Paying people on time is valued; accurate employee informationis valued; support to managers who are handling difficult disciplinary, sickness or grievance cases is valued; slick people processes are valued; efficient restructuring is valued. We should not delude ourselves that these activities are somehow worthless. They are not. HR adds value through these activities.

But there is still something missing. What about the people issues we are not engaged in, but could be? What about working the data so that we bring real insights to business colleagues?

This kind of 'value add' is what an Economist Intelligence Unit/Deloitte report in 2007 (Aligned at the Top) called 'the big challenge' and their research drew an interesting distinction: 'When senior business executives talk about HR, they focus on administrative activities such as rewards and benefits, performance evaluation and HR operating efficiency. When those same executives talk about people issues (our emphasis), they focus on talent management, workforce productivity and leadership development and, in many cases the HR function isn't even mentioned'.

A KPMG report — HR: Architect or Artisan? (2008) reported the following insight from the CEO of a major high street retailer: 'When the marketing director comes to the executive board meetings he presents data on our consumers, and we are given enormous insight about their buying habits, their aspirations, their concerns and their hopes. We have clear demographic data, and we can predict with real accuracy how patterns will evolve. But when HR presents information about our employees it is less precise, less concise, less insightful and less predictive'.

These CEO insights cannot be dismissed and they set out challenges of relevance and data insight the function must respond to.

We propose to unpick what is meant by value creation referring to recent research and then examine HR practitioner perspectives. We will outline how some HRfunctions are responding to this desire to extend the range of value adding contributions and finally highlight a number of challenges that remain if HR is to create value through people.