The second of the PeopleStrong Roundtable series on ‘HR Transformation’ saw HR and business leaders discuss the roadmap for human resources as a function in the increasingly complex work environment. The question is whether or not HR demonstrates a clear contribution to business productivity. The growing appreciation of the value of a company’s assets is steering HR to move towards metrics and measures to gauge its contribution to business. The first PeopleStrong Roundtable series, published in People Matters’ May issue of 2011, established the essence of HR transformation and business drivers.

This new series takes it a step further and brings together views from the business fraternity on what HR needs to do ‘more of’ and ‘less of’ in this new context. People Matters brings to you the excerpts.

For over a decade, human resource professionals have more often than not talked about HR transformation, the need to contribute to business value and move away from focusing on transactional HR activities. HR outsourcing emerged from this aspect of transformation and helped many organizations to decrease their administrative and transactional burden. While HR has embraced this transformation, the question now is about how efficiently this change can contribute to business. In this context, Pramod Bhasin, Non-Executive Vice Chairman and former President & CEO of Genpact, emphasized the need for HR to revisit its role and brought attention to the pertinent questions that must be answered to ensure that HR is on the right track on its journey – What HR needs to do for business, how well defined are its responsibilities and what changes does HR need to make?

The new responsibility

It is an accepted fact that HR plays a significant role in contributing to and facilitating the achievement of the strategic business objectives of a company. Businesses expect HR to build organizational capability, build a dynamic and meritocratic culture as well as instill a sense of ownership and accountability in all the employees. To take on its new responsibility, HR has to redefine its priorities in order to make time and bandwidth for the same. As Bhasin explains, “Much like in Genpact, while thinking of any process or business, the discussion has been about effectiveness versus efficiency. The HR function today must look at its role in the same light.” As a strategic business contributor, the function is moving towards questioning how HR can be more relevant to business.
To build organizational capability, HR needs to invest time in coaching and enabling people to upgrade their capabilities, keeping in mind the present and future business requirements. Along with that, HR must also become ‘champions of change’ and create a culture that will allow it to be agile to meet the changing market dynamics. Rajiv Burman, Sr. Director & CPO, Max New York Life Insurance explains HR’s new responsibility and says, “HR’s role is to link change to the strategic needs of the organization and minimize employee dissatisfaction and resistance to change. This will play a crucial role in how business will excel in the dynamic environment.” So, if HR is conscious that its role in the larger business context is evolving, it must identify how its investment in terms of time and effort will make an impact.

What’s in?

In view of its growing contribution to business, HR needs to identify its core competencies and at the same time, get rid of a few peripheral functions.

Focus on productivity: In order to gain respect from business leaders, it is important that HR lays emphasis on demonstrating productivity and value. For this, HR needs to put in place appropriate metrics to measure its contribution to the business agenda. Muninder Anand, Director Client Development, Mercer Consulting says, “It is essential to define who sets and judges the effectiveness of HR. Measures for HR effectiveness are important to align HR to the strategic objective of the company. For example, there is a science behind high attrition in Gen Y employees, which is important to measure in order to address the same. Random engagement activities cannot be the answer.”

Leadership development & coaching: HR will have to concentrate more on leadership building and be able to identify the leaders in the pipeline at any given point in time. HR’s role in the new talent strategy is not limited to recruiting and engaging people, but also in investing in nurturing leaders. This will help strengthen the leadership pipeline that is ever ready to fuel business growth. While previously HR was more focused on leadership development initiatives, it did not result in HR being able to identify the ready-leaders who could be on standby for a critical business requirement. Elizabeth Nanda, Chief of HR & Training, Fabindia, explains, “HR needs to be focused on helping employees design their own career paths in the organization and equip them with the tools and knowledge to be able to do so.”

Enable capability building: HR should ensure the right mix of talent for current and future needs of the business, and both acquisition & retention of talent should be on HR’s radar. Developing a decision matrix to identify the right talent, to manning critical positions, developing a simple yet robust process for enhancing individual & organizational capability, and running it with precision will be the key differentiator for an organization. HR has to bring in the right mix of science and art in decision making and for this, HR professionals need to spend time in understanding and creating such matrices.
Assessing the talent development needs and developing training programs to prepare for the organization’s anticipated needs, remain HR’s key mandate. However, certain operational execution of training and development may be outsourced.

Knowledge retention: The role of HR is to create an environment of knowledge sharing through a culture that encourages and facilitates the process of getting the right information to the right people at the right time. Further, in creating the ‘ultimate employee experience’, HR will have to play a critical role in communicating all tacit knowledge about the organization, which will evolve the right engagement of employees. Pankaj Bansal, Co-Founder & CEO, People Strong articulates, “HR should create a knowledge warehouse consisting of the best learning practices. This will minimize the effect of attrition in an organization, since it is an integral aspect that every organization needs to cope with.”

Leveraging technology: HR should actively work towards leveraging technologies which can reduce costs, enhance speed and accuracy of execution, and support self-service for better satisfaction. They need to be inquisitive enough to find out what these technologies are and how they can be leveraged. There is no merit in spending time on transactional activities which can be better outsourced. Payroll processing, maintenance of establishment, simple compliances and routine activities, which do not require human interaction, are better handled by such experts outside the organization through a technical internal interface. Social media as a platform can be leveraged by HR to extensively connect, engage and communicate.

Connect and engagement: Employee engagement being a key focus area, HR can do so by creating platforms to engage the workforce in such a way that they remain connected – employees with employees/management/customers/social causes. A performance oriented culture, and a method to attract talent and retain them needs to be built. Employer brand building through the use of the social networking platform is yet another key focus area for HR.

Business planning: HR necessarily needs to be involved in business planning, formulating business strategy and driving strategic goals. It must take lead in planning for challenges by understanding workforce trends, identifying potential resource opportunities and gaps and developing effective initiatives. HR must focus its time and resources on strategic imperatives and outsource administrative responsibilities. Anand explains HR’s business role as, “With new talent challenges emerging from rapidly changing workforce demographics, the HR function can play a critical role in addressing future talent challenges by helping organizations improve its future capabilities without a dip in productivity or morale. HR must help organizations understand the talent market’s changing requirements in order to make the employer more attractive to top talent.”

What’s out?

HR has to move away from its power-centric mindset and be open to the use of technology to bring in more transparency in operations. As P. Dwarakanath, Director – Group, Human Capital of Max India says, “HR needs to come out of the mindset issue that managing payroll will give them power.” HR will also have to take note that one size will not fit all. By using self service and flexible offerings, there is an opportunity for HR to meet diverse needs of a multi-generational workforce, which needs to be customized so as to meet the requirement of its employee base. In this backdrop, HR will have to prioritize and do away with certain activities which will derive the same value even when outsourced or automated.
Transactional HR: HR processes which are transactional in nature like payroll processing, maintenance of establishment, simple compliances and routine activities which do not require human interaction, are better handled by experts outside the organization and can be done efficiently through automation and hence can be easily outsourced. There is no merit in spending time on transactional activities which can be better managed by experts who can handle it for multiple organizations, thus aggregating it for cost benefits.

On-ground activities: HR should not be involved in on-ground activities like events and celebrations. Such activities are better managed by a third party or the internal communication/marketing team of the organization and it is best if HR can keep off from such activities.

HR audits/process mapping: The mapping of processes and audits should be done by a third party and not by the HR. This will help in giving the organization a broader picture rather than a biased view.

HR can play a crucial role in transforming the business landscape if it makes the right investments in terms of both time and money, and become conscious about measuring the impact of these investments. However, organizations must note that the relevance of HR transformation will depend on the maturity stage of the company itself. The decision of what is core and what is not core for the HR function will need to be taken within that context. The onus of the decision of what HR should do more or less of, lies with HR alone and requires the team to reflect on what efforts will eventually maximize the impact of HR’s contribution on business.¬¬