Category : HR Transformation

Introduction to HR Transformation — Chapter 1

With the onset of the digital age, it is more important than ever to leverage digitisation in business processes. Hr transformation is one such vertical that needs to be prioritised. Not only for growth and seamless functioning but also for appealing to the millennials who are the latest workforce driving the growth story of multinationals all over the world. While paperless offices are gradually becoming the norm, it is equally important to develop and modernise the HR practices for well-tailored millennial-friendly policy implementations.

HR professionals have moved from industrial relations where they negotiate the terms and conditions of work to personnel specialists who have expertise in HR practices like recruiting, compensation, training, and organizational development to business partners who deliver value to business success.

When HR professionals help business leaders deliver value to investors, customers, and communities, HR, in turn, creates value. This chapter is a series of many such topics that talk about HR Transformation and how it affects businesses.

Introduction to HR Transformation
1.1. Perspective
1.2. Common Pitfalls
Definition of HR Transformation
A Model for Transforming HR
Conclusion

1. Introduction to HR Transformation

The growth of any entity, be it an individual or an organisation, is directly depended on how it responds to change. As the old adage goes, change is the only thing that is constant; similarly, people who mould themselves to changing circumstances, survive the toughest of storms. The HR landscape is a tricky one to navigate. With increasing globalisation, HR practices have to be constantly reviewed and upgraded to traverse the rough waters. No more is HR just about hiring and payment, today, HR is the window through which customers and potential employees (the backbones of every organisation), view the company itself. We have websites dedicated to scooping out the best and worst HR policies all over the internet, hence more urgent is the need for HR transformation to meander through the 21st-century Human Resources hurricane.

HR departments should respond to increased expectations given constantly changing and challenging business conditions. Here, the executives described the business challenges they had faced and how they had transformed the way they work.

Source:- https://www.nggconsult.com/hr-transformation/

Thoughtful and innovative HR executives who have helped their organizations and the HR profession make meaningful progress in contributing to the performance of their companies. Transformation theory draws from change literature found in sociology, psychology, anthropology, organizational development, systems theory, high-performing teams, and economics.

These disciplines teach ways to approach both large- scale and personal change. Theory without practice is conjecture and is usually irrelevant. Practice without theory is idiosyncratic and unsustainable.

1.1. Hr Transformation Perspective

Why do organisations need HR transformation?

A successful HR transformation increases the value human resources adds to the business. In businesses, promoting success may mean reducing costs, increasing market share, growing in global markets, or innovating new products or services.

In government agencies or nonprofit organizations, it may mean delivering services, achieving externally imposed goals, meeting constituent needs, or operating with reduced budgets.

The point is that HR professionals often focus internally on the function of HR rather than externally on what customers and investors need HR to deliver. An HR transformation should begin with a clear understanding of the business context because the setting in which you do business offers the rationale for the HR transformation you will do. Basic supply-demand logic asserts that if supply is high for any given product or service but demand is zero, then its value is zero.

Picture this: It’s your first day at work today and you have high hopes from the HR team about on-boarding. Instead, you spend your first day running from post to pillar trying to acclimatise to the new environs. HR transformation is just this; it doesn’t just bring you in, it hand-holds you through your first day at work and helps you warm up to your new surroundings.

Second scenario: You are in a meeting with your new boss and instead of the usual ‘how many workers are there’, you hear, ‘what is the output of xx number of workers?’ Instead of asking about what is cooking internally, your new manager is more interested to check for potential fires and dousing those.

In both these cases, we get a glimpse of HR transformation and how it’s really helpful in shaping the future of any business organisation. In one line, HR transformation is needed for the HR team to develop skills and capabilities to handle business growth!

1.2. Common Pitfalls

No transformation comes easy, there are always bumps on the road before transformation kicks in and starts shaping positive results. These are few of the common mistakes often made when starting an HR transformation:

Action Before Rationale – Some companies begin an HR transformation by doing things in human resources such as implementing e-HR, restructuring the HR function, or designing new HR practices. These HR investments are then defined as transformational. HR transformation needs to be grounded in the context of business demands. Just like upgrading your device software doesn’t necessarily upgrade your skills, similarly, investing in HR practices without adhering to the business needs is not just downright foolish, but can also be suicidal in the long term.
HR in Isolation – When an HR strategy is drafted in isolation from the business strategy, both suffer as stand-alone documents that probably won’t be sustained. HR transformation needs to be aligned with business transformation. It needs to be done in a way that focuses on adding value to the business rather than simply optimizing HR as a function.
HR in Increments – Some companies design innovative talent management, performance management, or total rewards process and declare it an HR transformation. These piecemeal efforts are only part of an HR transformation. HR practices need to be integrated with each other around key business results if they are to have lasting value.
HR by Individual Fiat – Some companies invest in an HR transformation because of the whims of an individual leader or a desire for more personal or functional influence. These individually sponsored initiatives probably won’t be transformational. HR transformation needs to be connected to the overall success of the organization, not just an individual champion.
Placing the HR Structure Before Business Strategy – HR departments believe that reorganizing human resources is the essence of HR transformation. HR transformation can only be complete as it helps implement the business strategy and drives business results.
HR by Individual Fiat – Some companies invest in an HR transformation because of the whims of an individual leader or a desire for more personal or functional influence. These individually sponsored initiatives probably won’t be transformational. HR transformation needs to be connected to the overall success of the organization, not just an individual champion.
Placing the HR Structure before Business Strategy – HR departments believe that reorganizing human resources is the essence of HR transformation. HR transformation can only be complete when it helps implement the business strategy and drives business results.
Efficiency Equals Transformation – A leading consumer products company described self-service as its HR transformation. Efficiency improvements can and usually are key elements of transformation, but efficiency alone does not make for transformational change.
Suggestions Breed Confusion – People are the biggest asset of any company and whatever transformation HR goes through, it will be done by the same people for the same people; so unless and until all stakeholders are on board and the leadership is open to suggestions, no HR transformation can succeed anywhere in the world. The one who works on the problem and looks for a solution knows the go-to person when you’re looking for solutions. Hence, make sure that HR transformation is taking into consideration any and all suggestions from the employees.
Avoiding Step-by-Step Conversation – Communication is the key to the successful implementation of anything new in all organisations. It is simply human tendency to resist change, so unless and until you’ve made a clear presentation to your employees on what you want to achieve with HR transformation and how you’ve laid out the change process, your employees would always find it difficult to grasp the concept and fail to live up to what is expected of them.
Ignoring the Future Organisational Needs – HR transformation should be designed keeping in mind the future business needs, future business prospects and future business scales. Just a present scenario analysis would not be sufficient to tailor meaningful HR transformation. Since the subject itself is so dynamic, taking the future in consideration is a definite must to achieve the optimum result in the cost-benefit graph.
Outdated Material Usage – Would you love reading through redundant organisational copies, which are anyway splashed all over the internet already and which you’ve probably scanned through many a time before your interview? Probably not. Hence, the use of outdated onboarding materials is a big no-no for organisations looking to make a cut to the top millennial-friendly employers. Make an effort to put in place a dynamic process to update your materials in accordance to your business numbers, and you’d be amazed at how the new hires look all kicked up to do their best.
Skipping Discussing Numbers – Think your HR processes cannot be measured? Well, surprise! A quick jot here and a quick insert there, make for conversational charts and tables which talk to you about the importance of HR transformation in your organisation. Plus, it also helps to calculate the risk and the final outcome. So, the next time you think that HR is devoid of any mathematics, well, think again!
Lack of Proper Vendor Management – Every HR transformation involves a large part that is outsourced, hence managing the vendors is a definite must. While intelligent automation, with a particular focus on talent management and on-boarding, is all the rage in town today, you need to keep an eye on the vendors and instruct them as and when needed, with similar intelligent information.
No Proper Financial Planning – Any sort of HR transformation entails financial costs and not planning ahead can jeopardise the financial position of the organisation. Whether it be backfilling costs, implementation costs, training costs or integration costs, a general financial estimate is a must so as not to rock the boat later.
Inadequate Change Management – Being prepared for the future is an important step towards successful implementation of HR transformation, whereas the reverse is also true. Keeping in place proper change management will help the organisation navigate the turbulent waters of change and emerge victorious at the end. Studies show a buffer of 12-18 months is needed for any organisation to adapt to HR transformation, completely.
Insufficient Technological Support – The lack of importance given to HR technologies is one of the primary reasons why HR transformation isn’t smooth at times. Have a chat with your IT guy, walk up to vendors and go through case studies to choose the right software and automation which would serve your HR transformation ideally. The SAP implementation wave had experts being flown in from foreign countries for technological support and companies which made that investment, managed to thrive in this age of cutting-edge competition.

2. Definition of HR Transformation

A true HR transformation is an integrated, aligned, innovative, and business-focused approach to redefining how HR work is done within an organization so that it helps the organization deliver on promises made to customers, investors, and other stakeholders.

This work begins by being very clear about the rationale for doing the HR transformation. The rationale for HR transformation is too often from inside the company whereas the rationale should actually come from outside the company. The winds of change should be the harbinger of a new dawn; as the digital world takes over the traditional landscape, organisations need to be quick to adapt to change and adapt well. Yes, there’s always an uncertainty lurking in the future for HR transformation, but taking this uncertainty as an opportunity is the key to wading through the era of change. While the rules of future businesses are being rewritten at lightning speed, an accelerated push in HR transformation is the need of the hour.

3. A Model for Transforming HR

There is the four-phase model for HR transformation to ensure that HR drives business success and avoids the common pitfalls of such efforts.

Phase 1: Build a business case. (Why do transformation?) HR transformation begins with a clear rationale for why transformation matters. Is it to be in the game, keeping in sight the latest market trends? Is it needed to stay relevant to the digitally savvy population? Is it needed for a broader and all-inclusive role of HR in the organisational growth? Until and unless you have answered this ‘why’ to the satisfaction of all stakeholders, developing a solid business case is very difficult if not impossible.

Phase 2: Define the outcomes. (What are the outcomes of transformation?)This phase clarifies the expected outcomes from the transformation. What should happen because we invest in HR transformation? For sure, the team has a definite objective in mind before pitching for HR transformation, that very objective is the driving force behind HR transformation based on outcomes. For example, the organisation wants to increase the performance graph of the customer service executives. Then taking a back walk to how this can be done is the most crucial step to successful HR transformation.

Phase 3: Redesign HR. (How do we do HR transformation?) HR transformation requires a change in HR strategy around departments, practices, and people. It is a dual frontier, on the one hand, HR will have to initiate a dynamic change and on the other, hold up the company standards while simultaneously overhauling the whole system. In a nutshell, the ‘how’ of successful HR transformation isn’t just one simple question. It is an amalgamation of a number of questions starting right from the basics upwards. What is your company’s vision? Is the HR transformation in line with the broader picture and the vision of the founders? What is the HR role in the organisation? Is it just of a facilitator, a change agent or a business partner? What is the end product of the HR team? Is it just putting in place processes from hire to retire? Or does it entail diving into organisational improvement and business growth?

Phase 4: Engage line managers and others. (Who should be part of the HR transformation?) HR transformation requires that many people participate in defining and delivering the transformation.

Make it a point to remember that no one is immune to HR transformation, whether be it people who already have an answer to the ‘why’ or the clueless guys who excel at following orders. Guiding these souls towards the right direction is the single most crucial step of successful HR transformations.

These four phases sequentially, in reality, they occur concurrently. For example, while knowledge of business conditions has to frame HR transformation (phase 1), having the right HR transformation team (phase 4) is critical to initiating HR transformation. The formation of the HR transformation team is critical to the entire process.

4. The 4 Pillars of HR transformation

HR transformation to support organisational growth rests on 4 pillars, which are as follows:

Customers: It is not just the employer and employee anymore, the correct target group for the HR department includes the vendors and line customers as well. Practical and successful HR transformation would enable you to free resources from redundant work activities and push them towards performing more strategic jobs. After all, it is the customers who need to know what your organisation stands for and its values. Remember, a customer-centric organisation thrives, doesn’t just survive!

Technology: Leveraging the stakeholder relationship with the optimum use of technology is one of the important pillars of successful HR transformation.

Process: Rarely do HR teams reap the benefits of process redesign, all for the simple lack of knowledge transfer and training. Many a time, the lack of proper process frustrates the stakeholders resulting in negative HR transformation.

Structure: The choice of an organisational model completely in sync with the latest changes and upgrades in HR is the key to a successful transformation. Case in point being, companies now opt for Chief Growth Officer instead of Chief Marketing Officer, which is more in tune with the organisational aspirations of budding internet-based companies.

5. Conclusion

This chapter represents the goals of the HR Leadership and models of HR transformation. HR professionals should be aware of the principles of HR transformation. HR will add value to business success and help them reach their goals.

HR professionals who continually complain about lack of access to business leaders will never gain access. To fulfil their HR leadership role, they need to be active participants in the process of setting business strategy.