Success lies in choosing the right program, developing robust use case and garnering requisite stakeholder support
As management starts planning for 2012, instead of waiting for the business plan to be handed over to the HR department to append the manpower section, it is time to proactively get engaged in the conversation as the plan evolves. There are few potential entry points into the dialogue that can be exploited to be there!
Question the assumptions behind productivity gains and cost take-out programs: Enterprises will continue to focus on becoming more cost efficient in 2012, by targeting aggregate level savings from various cost heads such as procurement, process refinements and staff costs. Given the uncertainty and volatility of demand in the market place, expectations maybe to have a more linear relation between staff costs and scale of business, even when the business contracts. However, it is easier to gain scale efficiencies as business volumes go up than to take out costs as business contracts or stagnates. Also, with the last few years of belt tightening, easier options for cost take-outs may be hard to find. It is the responsibility of CHRO to ensure that unrealistic assumptions around staff cost maneuverability are not made at this stage.
Articulate people level dependencies as prerequisites for effective business program roll-outs: Various business unit programs are often conceived assuming the people enablement will be taken care of by the HR department, which is a legitimate view, provided HR is informed and cost of providing the program related additional interventions are accounted for. CHROs need to seek details about the programs envisaged by other departments early-on, conduct impact analysis and seek wherewithal to deliver their part of the deal. This is crucial, since examining aggregate impact of multiple programs on employees help HR point out any conflicting expectations from the employees across programs, besides warning against any change overload. HR can help in prioritizing and sequencing employee level interventions across the programs for effective roll-out and execution efficiency.
Gain specific commitment to proposed employee mix changes: Given the uncertainty in demand, management is likely to support any proposal that brings in labor cost flexibility. Changes in employee mix (by hiring more part-time workers, contract employees, retirees, low skilled workers, etc.) will require the business unit head’s support in managing resistance from managers within their units who are used to working with permanent employees with certain skill levels. This is the time to break aggregate level commitments to specific business unit levels so that execution does not encounter reluctance in the form of “this is too critical and can we have an exception, this time!”
Capitalize on uncertain business environment to push for most compelling HR function’s transformational initiatives: Businesses are looking for greater operational flexibility, more variable cost structure, directed investments and speedier benefits realization from transformational initiatives to sustain in the prevailing complex and uncertain environment. Organization redesign for tighter strategy-structure alignment supported by effective performance management system, HR service delivery transformation (moving towards shared service set-ups), HR process standardization and application portfolio rationalization, workforce strategy and optimization are some of the transformational programs that are likely to get management support. Success lies in choosing the right program, developing robust use case (including potential cost of not doing anything) and garnering requisite stakeholder support.
Of course, HR effectiveness in engaging in business plan exercise depends on how informed it is about business, how evidence based and data driven the arguments are and how much credibility HR has built with fellow stakeholders over the years.
The environment demands HR contribution in business planning more than ever before. Are we ready? What are you doing differently this year as part of business plan exercise? Do share.
Tushar Khosla leads Organization and People Service area within IBM Global Delivery, assisting global clients manage their workforce, leadership & change management challenges arising from complex business and operational transformations. Tushar’s current areas of interest include strategy-focused organistion design, creative leadership, social business and virtual teaming. The opinions on this blog are his own and does not represent IBM. You can read more by Tushar Khosla - http://www.sustaining-relevance.com, SUSTAINING RELEVANCE
Reflections from the world of management consulting by Tushar Khosla