NEEDED HR TRANSFORMATION- FOR BETTER BOTTOMLINE

HR Transformation

The definition of HR transformation has evolved out of a number of perceived and real pressures on the HR function. The function is expected to support the business, provide the right direction for the people management strategy, and then execute the strategy. It also has to demonstrate an improvement in value, yet at the same time carry out cost-heavy administration. In response to these challenges, the transformation process that many companies have embarked on involves examining the HR strategy and how it supports the business strategy, and then changing the HR operating model to achieve optimum delivery. An international study across diverse industry verticals has revealed a remarkable consistency in the key drivers to HR transformation across the globe. The main driver was the need to align HR delivery with the organization’s business strategy. Second was the desire to transform both the perception and reality of HR as a high-cost, low-value function to a low-cost, high-value business partner. Through the transformation process, HR begins to move away from administration and towards a more value-added strategic role. The objective is to align the function with the organization’s goals, making it a strategic contributor that’s responsive to today’s dynamic business climate. Despite these good intentions, a recent CFO Research Services report suggests that while some progress has been made, nearly 60 percent of finance executives still view HR as more of a cost center than a strategic partner. HR is still primarily an administrative and compliance based function with almost 50 percent of its time being spent in these areas. Less than 15 percent of its time is spent on strategic, value-based interventions.

Aligning HR competencies with Strategic Necessities

Although four out of five HR functions globally have embarked on some form of transformation, they are yet to be credited with driving business outcomes. Global research shows that although HR function has strong competence in professional knowledge, team, interpersonal and leadership skills, it lacks competence in financial management, data management and technology. In short, it lacks the skills that are required to deliver the business credibility that HR transformation is seeking to address. Indeed, the skills of the HR function are seen as one of the major barriers to effective HR transformation. Together with inappropriate skills, the inability of the function to use technology effectively has often meant that significant business investments have been under-utilized. The function has also observed a general lack of business commitment for HR transformation both in terms of the need for HR to play a more strategic role and the confidence in its capacity to do so. In short, the function has neither the skills nor the infrastructure to deliver effective transformation and the business leadership is not always convinced of the need. To achieve stellar success HR function must attend to its business model needs and ensure that it is integrated with the business strategy more ‘tightly’. When properly aligned, each dimension of its roles flow predictably from one to another. More importantly, each dimension plays a critical role in formulating a comprehensive strategy – and, by extension, in maximizing business performance and bottom-line benefits.

-Anshumali Saxena www.soilindia.net