New Study: The Top 10 Best Practices of High-Impact HR Organizations
Few magazine articles have had such a monumental impact on an entire profession the way that Fast Company’s “Why We Hate HR” did on the world of Human Resources after it was published back in 2005.
Not only was it discussed, debated, and argued about about ad infinitum(and still is, some would say), but it articulated the notion that strategic, high-value HR executives should have a “seat at the table” with an organization’s other high level leaders, but, that this was simply a pipe dream for many in HR.
Many think that the “seat at the table” debate has been debated to death, but it is back in a new research study by Bersin & Associates of The Top Best Practices for the High-Impact HR Organization. In the Executive Summary (and you can get a copy here), Bersin principal analyst Stacey Harris references the article and writes:
Though controversial and full of assertions that were hard to face, the article summed up important frustrations that were common among HR professionals at the time. Many were forced to acknowledge its validity, to pause and to wonder, “Okay. But where does HR go from here?”
In the years since, HR leaders have fought an uphill battle to change the profession. Today, smart companies do have a place at the table for HR. The challenge for HR now is in living up to the high expectations that come with the seat – expectations of high impact. It is not easy…
With this new report, we tie together past research in the areas of talent and learning, and brand new research on the strategic elements of HR we have found that hold the greatest challenges for the function today.”
HR organizations lack the skills to succeed
The bottom line to the new Bersin research is pretty simple: it shows that many HR organizations still lack the skills they need to succeed in 2011. The study, which included surveys and interviews with more than 720 global organizations, found that overall spending levels, organization structure, and team size have far less impact on business performance than the skills of the HR professionals themselves.
“This research clearly shows that the days of bloated HR organizations focused on administrative tasks are over,” said Josh Bersin, chief executive officer and president of Bersin & Associates. “Lean, technology-enabled, well-trained HR teams are able to take advantage of modern talent practices and partner with business leaders to drive impact.”
The research also makes the case that the decades-old “HR generalist” model is no longer effective unless the HR generalists are highly trained and connected to senior business leaders. That sounds like a contradiction to me, but the study also points out that the key HR competencies that drive results today are familiarity with integrated talent management, understanding of workforce planning, and comfort with social networking and HR technology.
Top 10 HR Best Practices
What I found most compelling in the survey was the list of the Top 10 HR Best Practices that produced the highest impact ratings out of all of the 140 HR practices and features that Bersin evaluated. See if you agree that this is a list that makes a lot of sense:
- Structured governance and business case development (HR impact opportunity — 39%). From Bersin:“Building a business case requires a clear understanding of the business or businesses that HR serves, as well as working relationships with all business leaders. HR can achieve both by involving business leaders in the planning processes and governance. This involvement also helps to ensure business alignment and, as a result of that alignment, business buy-in and support.”
- Developing advanced workforce planning capabilities (HR impact opportunity — 28%). From Bersin: “High-impact HR organizations incorporate sophisticated forecasting and workforce analytics into their processes. This enables them to translate company-wide talent, business data and external workforce segment data into workable insights that they can use and share with business leaders.”
- Implementing the “right” HR philosophies (HR impact opportunity — 27%). From Bersin: “High-impact HR organizations tend to commit themselves to creating work environments that enable employees to thrive both as individuals and as contributors to business success. They strive to create positive employee environments, and clearly communicate these expectations in the HR philosophy and mission. The most effective philosophies focus on fostering innovation and collaboration, or creating the best place to work, while the least effective philosophies focus narrowly on efficiency or cost-cutting efforts.”
- Reducing administrative work for HR business partners (HR impact opportunity — 25%). From Bersin: “Many HR functions have a role that is a liaison between the HR function and business leaders. The specifics of this role vary widely. High-impact HR organizations use it to advise senior business leaders, focusing on decision support, workforce planning, leadership development and executive coaching. By enlisting the right person, HR can improve its credibility across the enterprise, improve working relationships with business leaders, cultivate mutual understanding and gain influence. When this role is implemented poorly, with more focus on administrative duties and taking orders, our research found that it can actually reduce an HR function’s ability to work effectively and efficiently.”
- Implementing flexible HR organization design (HR impact opportunity — 20%). From Bersin: “High-impact HR organizations are flexible and agile. Like earthquake- proof buildings, they are structured to allow adaptive movement if the ground shifts. No overall HR structural model (centralized, decentralized or a combination of the two) in itself emerged as a predictor of HR success. But certain structural features do lend themselves to areas of excellence. One feature that we found to be universally valuable was flexibility. Fancy organization charts and designs are fine – provided that you also have a culture which recognizes the need to adapt structurally when business needs and challenges change, as well as an HR staff that is capable of making those changes.”
- Improving employee-facing HR systems (HR impact opportunity — 19%). From Bersin: “The most significant contributions to the overall effectiveness of an HR function come from community-building and self-service elements. Knowledge-sharing portals, web-based recruitment tools and management dashboards let various HR stakeholders and clients find what they need when they need it. HR functions with user-friendly client systems are regarded as twice as effective and efficient as functions that do not invest in this advantage.”
- Measuring both HR operational and business metrics (HR impact opportunity — 19%). From Bersin: “Measurement strategies in high-impact HR organizations have evolved to ensure efficiency, effectiveness and business alignment. Such strategies incorporate both operational measures by which to manage the HR function and strategic people measures to support crucial business decisions.”
- Developing internal HR skills (HR impact opportunity — 13%). From Bersin: “As they focus on programs to develop employees company-wide, HR organizations often neglect the development of their own team members. This is a mistake. The world of HR solutions is constantly changing. High-impact HR organizations must invest the time and money needed to ensure team members’ competence grows in such disciplines as change management and relationship management. Efforts must also focus on developing team members’ business acumen, industry knowledge and command of current best practices in all areas of talent management, as well as the use of social networking tools and other HR technology.”
- Improving line manager capabilities (HR impact opportunity — 10%). From Bersin: “A common pitfall for many HR functions is the attempt to meet the needs of every stakeholder directly, thereby spreading limited HR resources very thinly. High-impact HR functions have prioritized the focus of their HR resources on building the capabilities of their line managers. This decision allows them to work in partnership with their line managers, versus trying to work around line managers who may be incompetent or ill-prepared.
- Outsourcing HR services strategically (HR impact opportunity — 10%). From Bersin: “High-impact HR organizations use outsourcing to enable their internal teams to focus on things that cannot be outsourced, such as building business relationships and developing custom solutions for business managers. These organizations outsource areas that can be improved through economies of scale, or which require global coordination and expertise. What an organization outsources often depends on its level of maturity.”
Seat at the table = high expectations
The research study comes out of Bersin & Associates’ new HR Practice, which was recently launched, the company says, to “address long-standing requests from HR professionals to help them build their skills, and prioritize and align their HR strategies with the business to deliver the greatest return.”
“The challenge for HR professionals today is living up to the high expectations that come with a seat at the table — expectations to drive business results through people and culture,” said Bersin’s Harris. “Our new HR Practice and this particular body of research reveal the keys to driving impact. We are also addressing long-standing requests by our Bersin & Associates members to help them prioritize and align their HR strategies with the business to deliver the greatest return.”
I’m not sure how the HR Practice will go for Bersin, but if it performs like other parts of the Bersin organization, it should give all the other HR consultants a good run for their money.
In fact, just this list of the Top 10 best HR Practices is a great start because it clearly gets to the heart of what HR needs to be doing to add value to an organization. And if you have spent much time around HR, you know that just about everyone needs to focus a lot more on that.
John Hollon is Vice President for Editorial of john, and follow him on Twitter at http://twitter.com/johnhollon