 |
 |
 |
 |
 |
|
 |
|
 |
|
 |
|
 |
|
 |
|
 |
|
|
Hewitt Quarterly
Asia Pacific
is made possible through the combined skills and experience
of Hewitt consultants from across the Asia-Pacific region.
For further information please
contact:
Hewitt Associates
2601-05 Shell Tower
Times Square
Causeway Bay
Hong Kong
Tel: (852) 2877-8600
Fax: (852) 2877-2701
editor-hqap@hewitt.com
|
|
 |
|
| As the business environment grows more global and complex, the need for vision and leadership on people and organizational issues is greater than ever. The pressure is mounting, and all eyes are on HR to see what happens next. |
|
|
 |
 |
In an age of outsourcing where every function of business is open to scrutiny in terms of value, cost and efficiency,
the case for maintaining and developing human resources in-house needs to be made afresh.
There are no tablets of stone that say HR talent, HR departments or HR functions must remain in one particular framework
for all time. What is needed is a radical assessment of what we mean by HR and what we want it to be and to do. Only by
setting clear criteria is there a chance of developing the Next Generation HR to make it relevant and valuable to business
in the 21st century and beyond.
To lose HR as a distinct business practice and to attempt to split its functions into separate outsourced activities would be to risk losing a body of knowledge on organizational strategy and development that has been built up over a century. Protecting this body of knowledge and professional ethics isn't self-interest; it's common sense.
|
It can only happen, though, if a convincing case for HR can be made and sustained among the people who ultimately pay the bills.
Issues for clients
Despite improving functional excellence, HR costs are increasing six percent each year and HR sometimes struggles to
demonstrate its value to business.
It's also clear that in some organizations, the integration of HR services across departments - known
as the shared services structure - is not living up to its potential, with a particular breakdown in the effectiveness of HR's role as a true 'business partner'.
HR in some organizations has become isolated from core activities so that it appears to be a 'Cinderella' function with
little accountability. HR can then become vulnerable to attack from voices within the very organization it is designed to develop and support.
This is often due to a tendency of HR in some organizations to be passive and to focus on administrative functions rather than being a creative part of the business and putting itself at the heart of the drive to add extra value for stakeholders. HR's role is complex, though, because as well as being a team player, it does sometimes have to stand back within the organization and consider the ethical and compliance issues at stake in a business decision, and be prepared to be robust if it feels ethical or legal boundaries are at risk of being crossed.
Vision for the future
As the business environment grows more global and complex, the need for vision and leadership on people and organizational issues is greater than ever. The pressure is mounting, and all eyes are on HR to see what happens next. Will the function become a purely strategic business partner as transactional work is outsourced? Will it serve indefinitely as an administrative back office? Or will it evolve into a patchwork of various specialties ranging from coaching to payroll administration to compliance training?
|
 |
While there is no magic bullet, Hewitt believes HR's survival and success will depend on the following four 'bold bets':
- serving as the research and development function for human capital
- delivering a steady supply of needed talent
- driving organizational performance
- building integrity and trust in the workplace.
In terms of the talent issue, the tide of history may be flowing in HR's direction.
Demographic challenges
According to the United States' Bureau of Labor Statistics, organizations in the US will face a major worker shortage by the year 2010, when job openings are expected to outnumber working age Americans by 10 million. This shortage is expected to be especially acute when it comes to highly skilled workers in the 35 to 44 year-old 'key leader' age range. As if that weren't alarming enough, we're on the brink of a serious dearth in the number of highly educated workers. In the last 20 years, the increase in the share of workers with a post-high school education was 19 percent. In the next 20 years, it is projected to grow merely four percent. The workforce of the future is projected to be highly diverse as well. In 2000, 27.8 per cent of workers were Hispanic, African-American or Asian. By 2025, that number will be nearly 40 per cent.
Success in today's labor market requires organizations to manage a diverse and changing portfolio of employment relationships effectively, while simultaneously ensuring that they retain and develop critical contributors and potential future leaders.
Overview
The bold bets mentioned are overlapping and reinforcing, providing a solid foundation for adding organizational value and expanding the influence of HR leaders. HR organizations that passively accept their fate as administrative service providers, allowing the forces of outsourcing and cost cutting to overwhelm them, will eventually become obsolete. The HR of the future will be a hybrid, as the function balances new demands with more familiar areas of expertise. On one hand, strong evidence and analytics - rather than gut instinct - will be necessary to determine future talent needs and organizational performance drivers. In contrast to this call for hard data, restoring trust and integrity in the workplace - more typical of HR's 'soft side'- will continue to be vitally important in today's post-Enron business world, with market research suggesting trust in business leadership is at the lowest point in decades. Without this trust and an engaged workforce, the organizational performance needed for sustained business growth will be impossible to achieve. Real, sustained change requires a clear vision for transforming HR, selling that vision to the business and HR staff, providing the necessary resources for implementation, giving strong attention to change management, and putting a plan in place to ensure that HR professionals have the skills needed to operate in the new environment.
Next Generation HR - the door to the future
For HR to maintain a business leadership role, Hewitt believes it will need to tackle and provide solutions for the following issues:
Talent Supply - workforce planning, sourcing, selection, employee introduction (known as onboarding) and first year performance
High Performance - High achievement goal setting, reviews and rewards, and skill development
Leadership and Key Talent - Succession planning, assessment, development, and executive and key talent rewards
Employment Relationship - Employment branding, benefits, engagement, and career development
HR Transformation - Based on the Next Generation HR model redesigning the HR organization and processes
HR Strategy and Measurement - Developing a HR strategy and plan and creating business outcome measures leveraging on data and analysis
Assessment - assessing how well the processes, practices and HR organization supports the desired business outcomes.
Next Generation HR involves maintaining leadership in thought on organizational development. It means providing organizational benefits that are clearly seen to outweigh HR costs, and, above all, it means adding value for stakeholders, but in a responsible way that protects the ethical and legal position of the organization.
If HR rises to these challenges, then the future of the Next Generation can be secured.
|
|
About Hewitt's Research
To determine where the HR profession is headed and what the HR professional of the future ought to be doing, Hewitt Associates conducted a comprehensive study on the future of HR - its capabilities, structure, strategies, and value proposition to the organization. We began with a detailed review of the literature on the history, development and future direction of the HR function. We then interviewed more than 50 respected academics and HR executives - people including management expert Peter Capelli, Dave Ulrich from the University of Michigan, Jeff Pfeffer from Stanford University, and Ed Lawler, Director of the Center for Effective Organizations at the University of Southern California. We also interviewed HR leaders including Dave Pace of Starbucks, Dennis Donovan of The Home Depot, Matt Schulyer at Capital One, and Randy MacDonald at IBM.
Seeking to identify key themes on the future of HR, we asked this distinguished group not only about the state of talent in the global market, but also about key challenges facing the function, what business leaders really need from HR, and the kinds of innovations they see in leading organizations. A number of big ideas emerged from these conversations, suggesting new trends in the evolution of the HR function.
What's more, our research provides a glimpse into the future by zeroing in on innovations being applied in leading-edge organizations today.
The final phase of this research included detailed case studies of leading organizations identified during the first phases of our research. These include The Home Depot, Capital One, IBM, Starbucks, Timberland, GenWorth Financial, Procter & Gamble, GE and Pepsi. We spent a day or more at each of these top companies, conducting site visits and talking to HR executives and business leaders. What they told us serve as examples of how real leading edge companies are rising to the challenge.
Next Generation HR model
From the research, Hewitt has developed what we call the Next Generation HR model.
Hewitt has successfully tested it with over 50 companies globally and has started projects in HR strategy and process improvement with organizations including MetLife, Southern Company, Intuit and Levi Strauss.
Next Generation HR is Hewitt's contribution to HR's evolution and provides leadership in thinking about this important topic.
Several companies have already implemented elements of the model in discrete areas such as the Talent Supply Chain and High Performance Workforce issues. Readers interested in more information on the Next Generation HR model can contact our Talent and Organization Consulting (TOC) team members in their local markets.
|
|
| |
|
|
