The global financial meltdown of 2008 triggered a crisis that affected not just the banking and financial system, but whole economies and countries. The crisis triggered unparalleled change across organizations. Many shut shop or sold divisions or went in for massive re-structuring to shed jobs and stay afloat. This also meant unprecedented change for HR which was in many cases tasked with leading this realignment and change along-with business. While in many organizations HR was successful in implementing this change, in many others it struggled to meet these objectives within a rapidly changing scenario. HR has evolved tremendously over the last two decades to respond to the changing demands of business. It has gone through restructuring, built centres of excellence and leveraged analytics to support faster and more accurate decision making. While a lot of ground has been covered, a lot remains and in this article I explore the context in which we exist today and how it affects our ability to adapt to and lead change.
Challenge Number 1: The Pace of Change
The last decade has seen businesses go through tremendous flux, impacting predictability of business cycles and requiring a change in strategy to address emerging situations. Forces such as pressure on the banking system, global manufacturing, rapid technological advancements, and a global delivery model have impacted business in many unseen ways. The systemic nature of complex, interlinked organizations has meant longer causal loops with long delays between cause and effect. HR systems have themselves become more complex which has affected their ability to rapidly respond to change. Multi layered organizations and systems have meant that there is a time lag between Corporate or Head Office decisions and their eventual implementation by Line HR.
Challenge Number 2: Complex HR Systems
HR systems have become more complex with multiple inter-linkages between sub systems e.g. a change in functional and behavioural competency frameworks → job descriptions → compensation → hiring → performance → career paths. This means that a change in one system, affects other systems making the pace of change complex, multi layered and slow. This takes time to implement across multiple geographies and sometimes by the time you get down to the last layer/level the business scenario has changed again! Maybe there is scope to make our HR systems leaner to respond more quickly to change. Does HR see opportunities to prune down its HR Models and Systems and still support and drive business performance? Is there an opportunity to re-imagine HR and challenge ourselves in the way we have been doing things?
Challenge Number 3: Leadership
Rapid change has required us to demonstrate leadership, which could be defined as an ability to take decisions amidst ambiguity. Effective leaders are able to take decisions that balance the short team with the long term. They do effective scenario planning and balance the long term risks of decisions; is there a need to do more scenario planning as HR? Do we need forums where HR comes together as one team to discuss debate and challenge each other on emerging scenario? Can this provide us the forum we need to experiment with our thinking and come up with ideas and formats that respond more quickly to change?
Challenge Number 4: Talent
The HR function itself has gone through tremendous change in the last two decades. HR structures have changed creating sub functions or creating centres of excellence (COE’s). However the speed of change has meant that there isn’t enough talent available in the market to lead these COE’s/functions. HR has created enough platforms for its people to acquire new knowledge and skills, but this seems inadequate and there’s still a talent gap in the market. This talent gap needs to be addressed by the fraternity to deliver faster and accurate solutions to business.
HR has successfully supported business through tremendous flux, but has its task clearly cut out. It needs to make its systems leaner and nimble and needs to invest in capability building. It needs to invest in scenario planning to develop both, its talent and its HR systems for the future. A close interaction between HR, Consulting Organizations and Educational Institutions will help us prepare the talent for the future.