Honing in on HR
Human Resources are an integral element in any organization. In fact, next to the business model, it is the core of the institution and adds credence to business functions. Yet, many companies focus too much on transactional activities and do not dedicate enough time to strategic planning.
Core HR functions include: recruitment, selection, compensation, training, development, performance management, HR strategy, knowledge management, workforce and succession planning. Although these are vital functions, many organizations’ HR personnel spend more time on billing and payroll functions as opposed to transformational (value-added) services.
"The real value of HR lies on the strategic end of the spectrum," says Neil Reichenberg, executive director, International Public Management Association (IPMA).
Reichenberg recommends that companies take advantage of the strategic planning value proposition to build best practices within their HR departments. Human Resources processes such as pay raises are easy to automate and benefit changes can be done through call centers, he notes: "There is no reason why HR employees should waste time that could be better utilized with training and development, on transactional functions."
When asked whether the transactional functions should be outsourced or integrated into a shared services model, Reichenberg responds that it would depend on who is providing the shared services and whether all the stakeholders are involved in the process. He says, for example, one payroll department may have different pay scales, and if you use one system for the entire organization, that could be problematic.
"You’ve got to make sure shared services or outsourcing makes sense. If you want to implement SS only to cut costs, it would not be a good idea to embark upon it."
Plus, the impact of turnover in shared services on payroll and billing functions would presumably make the process more proficient than the effect. If a company does not have the right people in place to take over the helm, it could be detrimental to the bottom line, says Reichenberg. Although finding a set of metrics across HR functions can be extremely difficult, companies should try to find a set of metrics that can deliver value.
"It’s always a struggle for HR to come up with meaningful metrics — measuring value-added outcomes, as well as out-puts."
He says also that communication is critical in building employee trust and fostering good relationships; therefore a planned approach should be taken to effectively gain employees’ cooperation and in turn, their understanding and appreciation of your organization and its programs – especially during times of change.
Reichenberg points out that retirees and impending retirees create a real challenge for organizations on how they develop future leaders, and the steps they need to take to retain people. He says IPMA’s research proves that not enough is being done in the areas of knowledge management, workforce and succession planning, and establishments need to beef up those areas to remain ahead of the curve.