“Change is the only constant in life”
All HR professionals are familiar with this adage, courtesy of Greek philosopher Heraclitus. HR functions are often the first to hear of planned changes in business. Mergers and acquisitions, restructures, new hires, planned exits, entering new markets and relocations form a key part of our day to day existence.
Whilst always being an important factor in the HR function, we believe that the level of external change has reached unprecedented levels over the last 5 years.
The role of HR is to help business achieve goals of profitability, growth and change through the effective management and engagement of employees. The challenge is to continue to do so in an ever evolving world.
The current HR debate is less about is HR adding value but how does HR add value. In this paper, we explore some of the factors influencing businesses and how HR should be responding to these.
What are the causes of unprecedented levels of change?
A multi-generational workforce – For the first time in history, 5 generations are working together. Traditionalists, Baby Boomers, X, Y & Z are all working together but each generation has different expectations, goals and values (Futureboard Generational Differences).
Competition – With globalisation and the internet, there is an opportunity for business to operate globally at lower cost than before. However, this also means there is increased competition from new players emerging into every industry.
Technology – Technology has disrupted many areas of business; the way we recruit, market, manage finances, share information, and speak to one another across the world have all changed. For the most part, technological advancements have meant increased productivity in the workplace. However, the sheer volume of information we are processing means increased complexity, (every minute we send 1.2 million emails, see big data facts) presenting us with difficult choices to make about prioritisation, systems, analysis, governance etc. all of which influence employee policies.
Customers – Easy access to information such as price comparison sites, social media, and customer review sites like Trip Advisor mean that all companies are working harder to gain and retain customers.
Work /Home Life –The office/home distinction is becoming increasingly blurred as people in knowledge based roles fit their lives around the demands of work and home.
Economic Fluctuations – The UK has experienced a level of renewed economic recovery and confidence. However, other parts of the Eurozone are still very much in a state of crisis and it is increasingly difficult for anyone to predict how economies will perform in the near future.
Sustainability – The global economic downturn of the last 4/5 years has led to increasing regulation and scrutiny and a shift to business embracing the virtues of sustainability. This is no longer a subject associated with ‘green’ issues, but a wider strategic approach to corporate citizenship. See Unilever’s Sustainable Living Plan as an example.
Pace of Change – The pace of change is speeding up. Globalisation and digitisation are the key driving forces of this. Countries industrialising now are doing so much faster than in the past, partly because they can learn from other developed countries. The Chinese economy has grown by an average of 9.5% over recent decades and national income has been doubling every eight years, according to the OECD.
The complexity and pace of change is challenging for both public and private organisations, particularly for businesses established over 20 years ago. These organisations tend to be top down, western centric and often institutionalised; now they have to think about how to operate in a fast-moving, globalised, multi-polar and digital environment.
This dynamic business environment means HR needs to think and act differently. But as corporate functions are asked to ‘do more with less’, where does HR start? Here are some thoughts…
Hire Fresh Talent – The HR function is a keen advocate of talent programmes across business, but has a poor track record of hiring and developing fresh talent themselves. There are very few well respected HR graduate programmes in the market, despite some fantastic academic courses in HRM, occupational psychology and organisational behaviour. HR should be developing a business case for hiring the brightest graduates into the function and finding ways to develop their skills to suit the future of HR.
HR needs to be a multi-disciplinary function, so it should be looking beyond the typical generalist profiles when hiring externally. The profession needs to look at talent in marketing, communications, digital, consulting, change management, organisation design and commercial. It would be great to see more internal secondments to HR from the business, and vice versa. Furthermore, it needs to consider bringing in specialists on a project basis to support accelerated change.
Become More Strategic – Admittedly, the profession has shifted from being reactive to more proactive and aligned to the business. But it needs to go further. We found the recently used term ‘HR Anticipator’ by DDI and the Conference Board helpful. The ‘HR Anticipator’ being the HR person forecasting trends and anticipating how they may impact a business. This could be, for example, flagging talent gaps and developing strategies to fill those, before they damage the business.
As a Senior HR leader, this practically means taking time out of your day to look at the data, explore what is happening within the business but also in the world around you. It is imperative that as a leader you understand the pressures in the industry you are operating within. HR needs to confidently challenge the thinking of senior peers, using data and research to support their arguments. HR professionals will influence more effectively if they have a deeper understanding of other business functions and can more clearly link the benefits of HR initiatives beyond the stereo-typical justifications of improved retention, reduced recruitment costs and a more motivated workforce.
Be an employee sponsor – Lucy Adams, the ex HR Director of the BBC, recently spoke at an event that we ran on the subject of ‘Disruptive HR’. Lucy advocates that HR put the human back into human resources.
The economic downturn has meant that the function has been focused on restructure and redundancy; not helping the reputation of the profession. It’s important that HR plays a role in listening to employees and create a work environment in which people will be motivated, empowered and therefore engagement. Research conducted by Gallup, indicates that employee engagement affects the bottom line: the top 25% of their engagement database have higher productivity and profitability ratings.
Businesses, and HR, must acknowledge that they don’t get it right all of time and as a result should ask employees for feedback, in a real time way, ie move away from the annual appraisal and shift to continuous feedback. Remember Gen Z are growing up in an environment where they have learnt not to automatically trust politicians and CEOs. Therefore the need for transparency and open communications is greater than before.
Help to Create a Sense of Purpose – The rise of the social enterprise is proof that people are not solely driven by making profit. We also know from our own internal employee satisfaction surveys that discretionary effort comes from individuals that have a sense of purpose and belief in the company they work for. Certainly one of the commonly talked about Gen Y stereotypes is that they care about corporate social responsibility and want to feel like they are making a difference. Unilever and Google are businesses that speak to this motivation brilliantly in their employer branding; the former is “a difference made by you” and the latter is “do cool things that matter”.
Aaron Hurst, author of The Purpose Economy, has been researching this subject and mapped out a process for creating a sense of purpose within a business. His thinking is that purpose starts at an individual level but it is contagious, so it can build from an individual to group level and then evolve to community level over time.
In our experience, HR professionals are generally very values driven and have a natural affinity with this subject, therefore they are well placed to influence stakeholders, urging the board to think beyond CSR to thinking more broadly about how a business can create a positive impact and support individuals to achieve continued growth.
In Conclusion – To summarise, the world is facing complex and unpredictable levels of change, which is forcing organisations to rethink the way in which they operate. This change is at times incomprehensible, but we know it is here to stay and will only accelerate in pace.
The HR profession has evolved in a positive way in recent years but it needs to continue to develop in order to anticipate change. This means understanding business to a greater depth, consider ways of attracting and retaining the best talent to the profession, influence business strategy by using intellectual rigour and research, continue to listen to employees, but do so in a more continuous way and finally consider ways in which to engage your workforce by creating a greater sense of purpose beyond the stereotypical metrics of profit and loss.
Author: Katherine Travell, CEO, Futureboard HR