Another year gone – Change for better or worse?

Another year is gone and the global HR community is still implementing HR Business Partnering, three pillar models and so on. I have not seen anything new and even the old discussion whether to focus talent management on the top X percent or regard everybody as talent is back.

On my research for this article I came across the excellent HC Trends report from Deloitte. I also did some research in regards to any more recent surveys around the actual effectiveness of HR Business Partnering but couldn't find anything new.

We know what's important and still struggle to deliver

The core of Deloitte's study is to look at the importance of strategic fields of HR and the readiness of companies to deliver on them.

HCtrends2015.jpg

The findings above are not surprising. It is rather terribly logical considering that companies in most developed countries depend on talent and their general human workforce as their most critical factor to success. Additionally, major developments in recent decades such as truly global employment markets resulting in significant brain drain, worsening demographics in western countries and the different career expectations and approaches of younger generations made the challenges even greater. So the key areas are:

  • Culture & Engagement
  • Leadership
  • Learning & Development
  • Re-inventing HR
  • Workforce capability

To simplify the main focus is on securing the best talent, developing, retaining and engaging them to gain maximum output and not forget to reshape HR to deliver on these. This is nothing new and this can be found in many other older studies and surveys. The aim of ‘new' HR models such as HR Business Partnering was – amongst others – to more efficiently deal with these challenges.

According to Deloitte's study, even though these critical areas have been in focus for many years, the skill gaps in these fields have widened and quite considerably so. Look closer at the very disappointing results in Learning & Development, Workforce Capability and Culture & Engagement.

One could provokingly read in these figures that the skill to hire, train and engage the right staff has worsened. As a result, one can clearly see the significant increase in vacant roles on all levels of seniority in Talent, L&D and OD/OE. Considering the huge investment in countless HR restructuring programmes in many corporates, one has to question where HR is heading to.

Does HR perform?

On a more positive note, 39 % of all HR professionals rated the HR offering as good or excellent which is up on preceding years. Interestingly though, just 28 % of their non-HR counterparts agree with that rating. The question remains why is that? Speaking with non-HR business leaders I always hear they judge the performance of HR on the following points:

  • Bottom line impact through:
    • Ability to recruit critical talent and all levels
    • Ability to develop and retain talent
    • Leadership development
    • Handling of social partners such as trade unions
  • Service level & speed of response in regards to day to day operational needs

If you refer to the earlier graph you will see that the biggest skill gap increase is in Learning & Development, followed by Workforce Capability and Culture & Engagement. From a business leader's perspective these are the most critical deliverables as they ensure the right workforce, with the right skills and the right motivation.

As the gaps between importance and readiness have widened significantly, there is no surprise that the HR professional's judgement of their profession and the judgment from non-HR professionals differ. From an HR leader's point of view this might be hard to realise considering major markets globally have started to improve and HR leaders will have found it easier to secure budgets to re-invest in their teams. One has to wonder whether the cuts after 2008 have been too deep and the re-investment to slow.

Comparing 2013, 2014 and 2015 leaves quite an impression as well. In the 2015 survey 39 % of HR professionals thought the HR offering is good or excellent, which is up from 24 % in 2013 and 35 % in 2014. This is quite a significant improvement.

The result is equally positive if you compare the that in 2013 37 % of HR professionals rated the HR offering as Underperforming or Getting by. This figure fell to 34 % in 2014 and 29 % in 2015. These relatively positive figures cannot hide the fact, that still 61 % of all HR professionals and 72% of all non-HR professionals rate the HR offering as adequate or worse.

I wonder whether this is the tragic answer to the question on how effective the implementation of HR Business Partnering has been in delivering the needed upskill in the profession. I am not saying the fault is necessarily in the model. The shortcomings lay in why and how companies implement three pillar models. Too often the change is mainly motivated by cost savings and efficiencies. You will further find that many businesses 're-train' the same staff into the new roles, which I would regard as impossible. A contact of mine once said, to be successful implementing a three pillar model you have to replace 1/3, re-train 1/3 and another third will thrive in the role from day 1.

So the picture remains mixed with some positive and some negative. Though one point is clearly than ever, the importance of HR. The discussed skill gaps are a challenge to overcome but proof equally the ever stronger need of excellent HR management.

What is your call on 2015? What is your opinion on the state of HR?

References:

Deloitte HC Trends 2015, 2014 and 2013 as of December 2015, http://www2.deloitte.com/us/en/pages/human-capital/articles/introduction-human-capital-trends.html