Roundtable: Building the Case for HR Transformation
As many organizations struggle to cut costs, streamline processes and improve efficiency to survive the current economic climate; the bar has certainly been raised for HR leaders to deliver optimum services, and in some cases, drive positivity into disillusioned workforces. But how often is HR invited to the table when tough management decisions are being called? To discover what benefits HR Transformation may bring to an organization, it is important to anticipate the returns - both quantitative and qualitive before embarking on that journey. The following roundtable session explored HR Transformation at the 13th Annual Shared Services Week in Orlando. Attending were:
Craig F. Warren
Director, Global HR Business Services
Rochelle A. Hood
FSS Process Improvement Manager
Mary Beth Drake
VP, HR Shared Services
The McGraw-Hill Companies
Melissa D. Lytell, Director
HR Shared Services
US Dept.of State
Manager of Human Resources
Nissan North America
Dep Assistant Secretary
US Dept of State
VP Global Shared Services
Scott Manning: I’ve got seven questions. The first one is: what is HR transformation? The next one is: what are the key drivers on HR transformation? Third, what is the best way to get HR a seat at the table? Four, there are two primary strategies in HR transformation that people use or a combination of the two. One is buy, and one’s bill and I want to talk about what route you suggest people take in HR transformation respectively. Five, what are the key causes of HR transformation failures? Six is what do you expect the core returns to be - both quantitative and qualitative? And finally: what impact does the economy have on HR transformation? So let’s start with what is HR transformation? I see people talk about shared services and HR transformation all the time. It means different things to different people. I’d like to hear from you guys what is HR transformation?
Steve Klingbeil: I think there are two definitions – HR transformation versus HR shared services - and I see them as two things completely differently. HR transformation is something done internally to improve the ability of the human resources group to work more effectively with management teams, creating greater value, bringing more timely information, becoming a better business partner. Oftentimes we talk about people not having a seat at the table, like you mentioned; I think too often these people folks in human resources may or may not understand the business as well as they could. They are busy doing the function of HR; they are not busy becoming part of the management team and understanding what they need to make better and better decisions. So how do you go about creating specific measures that your management structure would like to see reported out of human resources? Very often I hear "what we do can’t be measured, " and that’s just not true. In fact I think its really, really important that human resources take a step back and say "if we can’t measure what we are doing, maybe we shouldn’t be doing it, because it may not hold significant value for the company".
Dwain Stevens: I would describe HR transformation as being HR changing in order to help the business grow by its people initiatives. That would encompass common benefits across all the processes, programmes, policies like really understanding the business, aligning everything human resources does to help grow that business.
Mary Beth Drake: To reiterate what Dwain was saying, we need to take a look at the services HR provides to focus on driving talent. I think it really is about feeding a talent pipeline, with HR identifying the talent needs of the business and having a seat at the table. The link back to a shared services strategy is that by having a solid shares service delivery model, it would enable your HR business partners to focus more on talent development and have shared services focus in on administrative and client solution services. Traditionally, HR generalists were everything in HR to the businesses; now we need to really differentiate that there are different aspects of HR - and how to transform that, market that to our business customers and also add the best value in the most effective way.
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Craig Warren: One thing I’d like to add is that I think there are two levels. One of them is HR transformation as the HR organisation reinventing itself into whatever the business needs, and that needs to be driven by the senior leadership’s direction and what they want HR to be. I think the other aspect of HR transformation though is a piece of transforming the perception of HR, and the value that HR adds to an organisation, because where HR as a function often falls short is where the business does not really know what our full potential is, and the value we can bring - so what they are asking us to do is not representative of the true value we can add. At times we often stop at the point of what they are asking us to do is what we are going to deliver (and there are challenges even in that, you know, aligning etc). A bigger opportunity for HR transformation is to educate and enlighten the business leadership around the true value of HR - which is really about the business - and getting them to that point so you can have a different level of dialogue around what the expectations of the business are of HR.
John Hanson: I’m not a HR practitioner, I’m a customer of HR; and I think as I listen it seems to be a discovery of the true purpose of HR in building a partnership - as you said, the true partnership and the true integration to the business and being part of it and not this thing that hands things out to it, you know, a giver and a taker from the business, a part of the business - so that is what I was looking for when I walked in on HR transformation.
Melissa Lytell: Over the last several years it seems that HR was more like technicians earlier on, but it seems like there are all these issues in the world that are happening around it and employees need to have more of a consultant-type role, and they see HR as different right now. Before it was like any secretary or assistant could become a HR specialist. There are different skills that are needed now in the HR arena, and so the transformations are technically needed but we’re having a hard time trying to find people that actually want to do HR work. You were talking about it earlier: you have to like people and want to deal with their issues and help them.
Scott Manning: Assuming that one of the reasons to transform is to be more strategic, provide more benefit to the business, let’s talk about what are the other key drivers for someone to transform HR.
Dwain Stevens: I haven’t always been in HR, but been involved with HR from a technical end. For me the key driver has always been: what does the business need to be successful? Structure follows strategy: that includes HR. "Structure" could be HR organisational structure or sales structure or compensation structure or benefits structure or your talent management process. What does the business need to do in order to find people, get people, retain people, pay people? So whatever people-related initiative is out there or how it touches people, it needs to align with the business goals. Every business is different: I worked at a company with four different types of markets and the sales structure needed to be different for each different type of market. That’s just as an example that one of the key drivers is to help the company to sell more stuff and make money.
Linda Tagliatela: I come from state department. People are what carry out foreign policy and what we find is that HR is very important in being able to make sure we hire the right people, put them in the right places, give them the right tools and skills to do their job and to optimise the use of the individuals who work for the department. We become a key player in that when they set the direction the policy is moving in, we have to make sure we have the resources to move, we’re prepared to carry out the function it is that they have to do.
Craig Warren: I think it is unfortunate that cost is often a driver of these transformations. It’s unfortunate because people can take a short-sighted view of the value the HR function can add and when they are making decisions that are right from a financial view for the short term you may have cut yourself off at the knees for the long term. With the significant consultative aspects of HR, there is a significant amount of cost tied up in each programme, your medical, health benefits programmes, and when it comes to cost-cutting time, that often can drive the transformation because you’ve got this huge amount of expense and there isn’t really a full understanding of what the drivers of that expense are and that sometimes leads HR to a difficult place relative to transformation
Scott Manning: Should cost be a part?
Melissa Lytell: It has to be for savings. When we developed our business case, it really was a part of it. Our main goal was increasing our customer satisfaction because that was really an area that we were not doing so well in; but at the same time there had to be cost savings if we were going to take such a major HR transformation and this new model that we were transitioning to.
Rochelle Hood: I am also unique in the sense that I am a customer of HR and also a partner because I am a product manager so we work on core initiatives together. The other view of how cost is a driver is because - and several folk alluded to this - HR still has the image, if you will, of being a necessary evil and so when people start looking at overheads, it’s the first area to go in cost-reduction initiatives. If you haven’t proven your value proposition or your haven’t marketed yourself appropriately, they will say "why would I not want to first look at this group as my first thing to cut because it is a non-revenue generating part of the organisation?" That alone - the possibility of being the first person to be viewed as a overhead - could be a driver of HR transformation, so that you are not first on the list and people do value you as one of the partners and say "I can’t transform my business without this partner to drive me to that without having the necessary recruiting and talent management and those types of things."
Craig Warren: I think there is a risk with a focus on cost. The thing is, if you look at things like the more consultative business-partner activities the benefit the company receives from those isn’t within the cost of the HR function. So if we bring investment in talent management of the future leadership that is going to allow you to grow your revenue or expand you in the markets, the benefits of that will not be seen in the HR function. I think there is a risk to cost being the factor because the nature of HR is very different. For some of the shared services transactional work the cost focus may be appropriate to get efficiency out of your process, but for some of the less transactional activities that type of focus will be detrimental. HR people aren’t often able to articulate that "this is where the cost is going to attack us here and this is how investing in developing your programme here or process can allow you to grow or generate this much more revenue" to get the people on board quicker; I don’t think they are effective enough in making those connections.
Scott Manning: It’s very hard for people to tie HR and what they do to increasing diversity and business strategies.
Dwain Stevens: My question is, is it harder or do we make it hard? Historically HR did not quantify what they do because if we have a very high turnover rate in different departments there is a quantitative measure that you can say "here is my recruiting cost, here are the turnover rates, here is the time to train them." All that is a cost to the business and it impacts their productivity and what they are able to do. That is why I go back to HR has got to support the business with its programmes and processes in order to grow profits or reduce costs.
Mary Beth Drake: One of the key drivers is there has been a convergence of talent issues over the last several years. I mean, we have gone from a model where people would stay at a company for several years and succession planning, while it was necessary, was not a real business driver. It was not something that people were really worried about because there was a talent pool. Now succession planning, the baby boomers, new generations coming in, there are a lot of differences that are starting to emerge that are forcing us, as HR, to really to start to define how we get this talent, how we retain. What are our drivers? And I think retention is one - of talent, not just retention of people but of talent. The other driver I see is the need for a solid employee value proposition including good benefits, work/life programs, 401(k), etc. It was even more challenging for us then to sell that employee-value proposition and to retain people. So HR people need to think differently: they need to think about not just how we attract talent, but how to retain it
Steve Klingbeil: I think when we start talking about costs as a driver; I think awareness needs to shift as a human resources practitioner away from human resources as kind of looking at ourselves. I think that we have to become more sales-orientated in our approach to our customers. What’s driving, what worries my business partner? What are their pressures? How does that translate to those talent or human capital issues or whatever? No matter how important we think something is, or maybe is going to be in the future or has been in the past, if the business does not see value in it, it’s just irrelevant to them and there is no amount of telling them that is going to get it. I think if we drop back to simple blocking tactics and doing the things that they think about us first for and doing those so well, that they can’t imagine doing it without us, then you build the credibility and the opportunity to come back and say, as Craig was saying so well earlier, we need to start thinking about taking this to the next level - and now you have an audience that will listen because you have proven yourself.
Scott Manning: So let’s talk a little bit about getting into those tactics. If HR wants a seat at the table, to be part of formulating and achieving the company’s strategy what are some of the key tactics that they, HR, need to take in order to be both valued by the business and have a seat at the table?
Dwain Stevens: Steve said it very well: you have to do the blocking tactics very, very well, that’ll open the doors - and HR has to understand the business. For example if in a manufacturing company scrap is up and they came to HR saying "hey, scrap’s up, why is that? Is it a training issue, is it a person issue, a recruiting issue, a talent issue? " HR has to understand that. We use a training programme - train the trainer, OJT, structural OJT process - and reduce scrap 50% saving time and money. That’s how you get a seat at the table, slowly but surely.
Steve Klingbeil: And to piggyback on you, if we are really close to the business and we hear them discussing a scrap issue, we should immediately begin to think how we can help solve that.
Rochelle Hood: I think another great way - and I think this is a missed opportunity - for HR to sit at the table is, you hold one of the biggest powers that there is if you look at the company’s P&L, one of the biggest expenses companies have is benefits and when they think about each year how that is going to impact the overall company and it affects every area of the business, that consultant role that you referred to, how are we looking at that? What are we specifically doing to drive that differently: how do we use that as a differentiating factor when doing recruiting, tying that back to the metrics that says how has that been a driver to get the right talent who is really contributing to the company rather than being just another line item on the expense report? I was thinking of this when partnering with HR on a project recently, and it relates to terminations process; and there is significant cash-flow opportunities that we talked about in terms of the appropriate timing with people get paid and companies get legal recovery of assets, and that just grows - and its just another area that I wanted to touch on as another driver is risk management. HR doesn’t necessarily see themselves as being in the seat of risk management but if you are looking at the ethics list and you are looking at things like Enron situations, you have one of the biggest drivers to sit at that table when you are talking about corporate risk management - especially with ethics issues and now unfortunately with fraud, in this economic time.
Craig Warren: I think it is correct and I think there needs to be a philosophical shift in how HR perceives itself. It’s not a matter of are you at the table. We are at the table. It’s a matter of are we going to get fed and are we going to influence what is on the menu? And a lot of HR people have the dialogue "oh we are trying to get to the table"; well you are already at the table and you don’t act like you are at the table. Say "I’m at the table and this is what needs to be on the menu, this is what I need to get fed" I think its part of the shift. A lot of people argue "I’m trying to get to the table, I’m trying to get the voice". Well, you are already there. Almost every HR function has a leader that is an SVP or an EVP that is a member of the senior leadership team and the question is, what do other people want on the menu? How are you influencing that, how are you influencing what your needs are? Are you just saying " well I am defining myself like this and I’m sitting at the big kids’ table but I really perceive myself as being at the kids table and I’m going to act like that" - as opposed to saying "no, I deserve to be here. Let me partner with you and get the respect that is due to me." A lot of times I think there is a psychological piece to that which we need to overcome.
Melissa Lytell: Just to piggyback on what you are saying, I see a lot of HR specialists that see themselves as paper processors: they are not really there to sit down and say to you "how can I get you what you want?" That has been a real challenge for us at the State Department, changing that mentality so that you are not a road block - because most people in HR are seen as roadblocks stopping managers from getting what they want.
Mary Beth Drake: I completely agree that you need to be at the table. You can’t wait for permission. But one of the things that drives this is culture- and I come from a diverse organization where there are three different segments, ranging from a very traditional culture to a more cutting edge wall street culture. The culture of some of the more traditional businesses may be that they see their generalists as their go-to people to handle employee issues and HR activities, while your more cutting edge cultures are looking for more strategic partners to drive workforce planning and organization structures. There are a number of ways, despite what culture you operate in that can get you a "seat at the table". More senior levels implement global talent councils at the leadership level. HR should position themselves to be the driver and facilitator at those discussions. But even at the lower levels within the business, the most effective method of getting a voice is through "workforce planning". If you know about what positions are open or if you know what the business issues are then start coming to the table with some recommended workforce planning suggestions on how you can drive talent solutions. And you start to close that gap in dialogue - and that’s when you will be more credible at that table.
Steve Klingbeil: Having data, having hard numbers, coming to the table prepared, coming to the table proactively with information on those issues or the current economic environment, that we are thinking ahead, that we are not asking and we are not taking orders, we are contributing to the future actions of the organization – and you can only do that with hard information, logical information. I will dare venture to say that an awful lot of people in our businesses view HR folks as the social butterflies of the organization. That can be a very positive and a very negative thing. Positive in that if you are using that network of people that you have developed because you said you like people to get that hard information and bring it to the business that gives you a position of strength. If you just use it anecdotally, it has zero value most of the time to your business.
Scott Manning: If we think about HR in the most leading businesses, with a business partner in the field, transactions centralized, handled through a service center, centers of expertise in recruiting of staffing, total rewards and think about that there are two primary strategies that achieve that model. One would be doing it yourself; the other would be going through a business process outsourcing approach and really buying that. Talk to me about thoughts and experiences on those applications – what works and what doesn’t work?
Linda Tagliatela: From a government standpoint, a state standpoint, we run three personnel systems: foreign service, civil service and we also have locally engaged staff. Basically the personnel policy and programmer is specific to an individual country so we basically run over 200 individual personnel systems abroad. We have found because of the differences in the three systems, because of the uniqueness of what we do and how we do it, it is cost-effective for us to do it internally as opposed to outsource it. We have gone to looking at, if you do transactional things, are there things we can outsource? At the moment we are doing them and as we mature as a shared service system, we’ll be able to outsource them for some things but I think initially it has to be controlled in the confines of the dept so that we understand all the pieces, we understand how it comes together and from there we can develop the most optimal system - and then reassess what can be outsourced. I think it is very difficult to start with the outsourcing.
John Hanson: I think regardless of where you come down on that decision bill vs buy, I think you’ve got to make sure that the transaction processing work does not take over your organization; you’ve got to be able to separate that aspect of your work from your partnership aspect. Sometimes on the buy - and the companies I have been part of have gone that route - it lets you focus again on the core, the things you really need to be connected to, and be the partner that you want to be. If that helps you get the focus, it’s great but I think the important thing is maintaining that split.
Craig Warren: Well we’ve got both. We’ve got a significant business process outsourcing deal with Hewitt Associates in the US and then outside of the US a lot of the things that are done with Hewitt in the US are done either internally or with another supplier. And one of the challenges we found is the ability of a global provider to have the scale to do that. So in the US we have around 9,000 employees so there is a scale for a BPO deal there. Outside of the US, we really don’t have the critical mass for that; we have a couple more thousand in each of the regions so the critical mass for outsourcing isn’t even there so because of that we are at a place where a hybrid model makes sense from a cost and an efficiency perspective. It makes sense to outsource where we’ve got the scale; we’ve gotten a lot of benefits out of that and its worked very well in the US. Outside of that we’ve had to create more capabilities either with single providers on a process by process basis or done it ourselves.
Melissa Lytell: Another area where the government is going - and the state dept isn’t participating at this point is – are any of you familiar with the Office of Personnel Management’s human resources line of business study that they have been doing over the last five years. Basically they are setting up five HR line of businesses and they are looking at outsourcing them or having other government agencies and the private sector outsource their functions to these five human resources lines of business – this includes treasury, DOD, Interior, and some of the payroll functions they are trying to consolidate. The government is trying to come along at a little bit of a slower pace than maybe some of our colleagues that we have been talking with this week but at least they are seeing the value in looking at that.
Scott Manning: If you had to narrow it down to a couple of critical elements that cause failures in transformations, what would they be?
Linda Tagliatela: Lack of good change management, the cultural change.
Dwain Stevens: I’d say execution. You can theorize and plan all day but if you can’t execute then you will fail in whatever credibility you were trying to get.
Mary Beth Drake: Don’t mean to state the obvious but lack of leadership buy-in. Senior management has got to be driving this otherwise it is not going to work.
Craig Warren: A lack of focus on the generalist roles and an under-focus on the transactional piece when going through the transformation. There is a lot of methodology out there for that but the more consultative stuff: getting the core competencies right, doing the people, having a longer-term plan to see whether they can make the fit or not.
Scott Manning: I think that is an excellent point, not only is what I see is defining that business partner role and providing the business with the tools and techniques to do that role but also making sure you get the right people and the right skill sets in that role. I think that is one of the critical elements.
Rochelle Hood: In addition to the leadership buy-in, it’s the business unit buy-in and their connection to seeing value in what you are doing. Everyone has experience going through a new evaluation system - we’ve got to do this, people are asking " what is in it for me?" How is that good efficiency when I am looking at layoffs and downsizing? And how that is connected to transformations is key to strategic alignment of the core objectives of the company.
Mary Beth Drake: The business unit buy-in is important but the message is probably the driver to the buy-in. We always try to sell and focus on how to make the business customer’s job easier or saving them costs but there is a real key message to HR transformation that has got nothing to do with either of those and that is driving business values or business results. It’s about HR getting better at defining that and marketing the message around that value.
Scott Manning: And demonstrating that.
Mary Beth Drake: Exactly.
Steve Klingbeil: Having the business recognize that it is a win so once you think that you are coming to the table it’s not like "wow, we really did good" and patting ourselves on the back. The challenge is for the business to go "this is working better for me. Now I don’t want to hire people. I don’t want to get involved in this process because they are already prescribing the fact that we are going to be out looking for people or taking corrective right size actions." Once you start to make it easy and the business is recognizing it is easy, you become invaluable but unless you have hard measures, unless you are focused only on the business and not on HR, you will fail.
Linda Tagliatela: I think it is important that you don’t go out and announce all of your successes because it really doesn’t matter. It’s somebody else saying "HR really did this well for us today" or "HR was a real success and now I feel more comfortable in giving them more things to do"; you telling people how successful you are is never going to work.
Scott Manning: In general people say that technology is an important aspect of HR transformation. What do you guys think about that?
Dwain Stevens: We just recently re-engineered, rolled out some technology and I’ve described it this way: that technology is a tool, its just a tool. If you don’t go through your process review, you can implement and have the wrong technology - so the best thing to do is basic process design: eliminate, simplify, standardize, proceduralize. And the last thing you would do is automate, that is the technology tool. So why automate a bad process, why automate something that adds no value? Once you do that and you do have good technology, that technology can transform your business, like we see if the HR service centre world - if 60% of the poised questions can be answered by themselves through the portal, then that’s great technology, it helps employees support the business and you are able to free up resources that do other things.
Melissa Lytell: I definitely agree with you - technology is a tool and you have to have all those things in place and reengineer your processes - but then when you have done all of that, make sure that you have not just done it in your HR unit but you have actively engaged all your customers because at the end of the day they are the ones that are using that tool. You are the implementer and if you don’t roll it out well and gain the buy-in and make them feel that you have taken our recommendations, it does not matter how great your technology is: it will go over like a piece of lead.
Mary Beth Drake: I smiled when you asked that question because we have gone through three years of HR transformation and all of it technology-based in terms of transformation, shared services and trying to drive the change in the business partner role - and this is a big debate in our company right now, its called the push vs pull. Can technology really drive HR transformation or do you need to put it there as a enabler kind of pull? I think the most important thing is that the technology implementation has to be done correctly, to Dwain’s point, but there is a component of competencies, there is a component of change and there is a component of communication. That all has to happen around the technology. If all those three happen around the technology properly then technology can drive the change. If not, it has to be an evolving or an ongoing process.
Scott Manning: How do you respond to those people that say that HR transformations and technology are shifting HR’s work to the internet?
Dwain Stevens: I got asked that question years ago: in the past they filled out a paper form so they were entering the data so instead of filling out a paper form, it now just goes straight into the system. Their job really has not changed, they are not doing HR’s work, and they are doing what they used to do in a more automated way. That’s what we communicated to them and when they connected the dots they realized we were right.
Mary Beth Drake: Except in the cultures where managers were supposed to be doing the paperwork but because the HR people were there, the HR people were. So the change management was not from manager paper to manager self-service, it was HR admin to manager self-service and that is what we went through in 80% of our company. And our message to them was more around better information, more transparent information through the technology because they did not have it on paper - but more importantly, and this is a harder message, but you are great managers of business, we now need to make you great managers of people - and it is managerial effectiveness training, its getting the right programs in place and also recruiting people with the expectation that you are not just going to be an editor, you’re a manager of people and that’s a huge shift but a necessary shift when you start talking about talent
Craig Warren: I think that is part of a broader shift in work where it is not just HR. You are experiencing the same thing in finance, IT and in other aspects of management, there is more work being shifted to the manager, so yes that may be true that you as a manager may be getting more work but it is a trade-off because some of it is easier and quicker than it was before. Quicker access to information is one of the benefits. It is shifting, perceptually, but as part of a broader shift and I think it’s an evolution in the role of the manager in terms of what do we really expect a manager to do. In the past, for better for worse, maybe some people management activities were really being done by the HR people aligned with the business and now it’s the business saying "well, we expect you as a manager to be understanding your people, understanding something of how to define a job, understanding about compensation and data" and there was not that expectation before. It’s part of a broader shift in business expectations of managers and it’s not something that’s unique to just HR.
Steve Klingbeil: Let me play Devil’s advocate for a moment. They are our customer. If they are unhappy with the process and they don’t have the expertise, there’s a lot we can say – all legitimate points - that your role is evolving; however if they don’t view that as optimizing of their time or if they view it as a less than valuable activity, its going to be an impossible sell because eventually they will have someone else doing it, they will circumvent the process. People are tricky that way. So I think we need to take a step back and if we had a customer that was paying us and they were telling us they were unhappy with it, we would take a much harder look. We might say "here is a better way to do it - or maybe we should be doing it". I think we need to take a step back whether we are in finance or whether we are in human resources when we are asking them to do something different. We can argue that sometimes it is in the best interest of the company and if we can gain consensus on that issue, we can go forward. However, if you don’t win the hearts and minds of these folks, your transformation will never occur. You will simply have your HR people doing it online for their customers and if that’s the circumvention, we need to be aware of it.
Linda Tagliatela: One of the things we have tried as we have moved forward is to have focus groups to engage managers and have them pilot things in different bureaus. If you get one person saying good things about what you are trying to do, you get more people to continue to buy in. It’s the principle that you show them the function and if there are things that they think need to be adjusted and you need to minor changes to the technology you are rolling out, you work with them so they are in partnership with you in developing whatever you are rolling out. You get better buy-in if you get them in early on in the process instead of just saying "OK we are going to roll this out today and everyone needs to be ready to implement". So we’ve have tried very hard, as best we can, so things don’t get rolled out in that regard; we do try to get some buy-in before we do it so people are excited to do it and talk about it and therefore there is greater buy-in throughout the building.
Craig Warren: Just to respond to Steve, I think there is a tension there though; I get that on a day-to-day basis because when the self-service process we were told to implement is put in, the CEO says go do it and you go do it. There is often a disconnect between the manager on the ground and senior leadership. The senior leader says this is what you need to do and the manager on the ground who you are interacting with everyday is saying "what is this? Why do you want to do this? It’s not working" So you give that feedback to management: "we’re hitting our cost-savings targets, we’ve got additional technology, its great – but we are getting a lot of noise because people aren’t really feeling the benefits of the self-service." And the response is "that’s OK, we’ve got that, you don’t need to worry about that." But there constantly is that gap in perception between the manager who has to deal with the process and the senior executive saying "I am not willing to make that investment for that, we’ll deal with the noise" but it often isn’t reconciled. I have been in two organizations with outsourcing or with a move to shared services and you wrestle with that - and after several years there is still a gap.
Steve Klingbeil: I think, as a HR practitioner, that’s where we need to get a better measurement, because if we can come back to the manager on the ground we can say "how long does this take? It actually takes you 32 seconds to complete this form." That is all that it takes you. However if we go back and say "this takes 17 mins and you have to do it once a day, four days a week" then we can go back and initiate some questions that say "is this really a good use of an hour a week of our managers’ time?"
Scott Manning: Moving onto the economy: tell me how you think the economy is affecting the company’s ability to transform our HR function.
Dwain Stevens: There is some hesitancy in some companies, especially ours; we are in the automobile industry, and for us now it is all about cash flow so our focus has shifted instead of say for a 12-24 months’ ROI, now we have to see an immediate ROI. Sometimes it does take spending money to make money but the ROI has to be much quicker.
Steve Klingbeil: I think there are two questions there. One is a company’s ability to transform and the other is HR’s ability to transform. From an HR standpoint, I think there are a lot of things that we can attempt to do that deliver that immediate ROI and that is understanding our processes prior to making an investment in technology, prior to making a significant organizational change - but developing better processes, those better measures, understanding the measures we need to be understanding and talking to our customers. On the overall business side, it is much more difficult because those changes are usually larger and require financial investment almost always so I think the downturn hampers transformation much more so than has to from a HR transformation standpoint.
Mary Beth Drake: I have two responses to that. One, around the process is I think it more important than ever that we take this opportunity and when we are asked to reduce costs and look at the way we do processes – we’re a Lean Six Sigma shop - to really drill in, but not just say "OK can we do it with less cost and a little bit better?" but "how is that going to get us a step further to our HR transformation?" So recognizing the value –and not just looking at the end-to-end process, we are asking can we do it better and if so, where should those tasks sit? Should they be out with the business partners, or moved into shared services or an outsourced - and that is one of the outcomes that is expected by a senior leadership. The other way - and this is our business imperative - talent development and talent pipeline becomes more critical at a time of economic downturn because, one, as senior executives are scheduled to retire, we have to continue to drive talent and there are non-technology ways of addressing that like I mentioned before: developing global talent councils, even driving diversity in inclusion. There are things that you can do and get yourself to the table with, even during times like this that don’t have to be driven by streamlined processes or technology, they are more the program-driven things - and there are a lot of people that are really hurting right now. It’s almost a better opportunity, in my opinion, on those programs to get out there but it is about prioritizing on the right things to maintain focus.
John Hanson: I think it is an amazing opportunity especially if you are trying to change anything to get the buy in-that you need. Everybody knows stuff needs to change to fix the mess that we are in, the company, the country, whatever it is. Really there is very little explanation around changes these days that it is quicker to get buy-in for transformational activities. And I agree it’s a great opportunity to pick up technology and pick up people. Getting the cash for that is a little bit tough but there are a lot of opportunities that a lot of companies are going to figure out how to cash in on through this downturn we are going through.
Scott Manning: One final question. We talked a lot about the impacts in transforming HR around being more strategic, in cutting costs, improving service. Is there any impact, positive or negative that most people don’t expect or don’t plan for when they transform HR?
Dwain Stevens: Many people in HR grew up under the transactional-type mode, that is their mindset, so I think they underestimate what it really takes to transform a HR person from transactional administrator to a HR business partner. That’s a real struggle.
Craig Warren: When you get a business partner that is really is an embodiment of that business partner role, I think people underestimate how much value that can add to the business.
Melissa Lytell: We’ve also found that your clients and your customers may be so miserable with how your HR is being performed or your IT or procurement etc, but when you do start to transform, when you are able to show the business case and show that you want to make changes, then all of a sudden things were fine the way they were – "we like the way that we were doing things" but for years they complained about the service, the type of technician they had, the type of HR specialist. When you do make the change, it’s like all of a sudden "let’s stay exactly where we are, we don’t want to change" and that is one of things we are experiencing right now as we are going through our transition to the shared services model.
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