When we reviewed the results of the European HR Realities survey, conducted in partnership with HRN Europe last year, some of the results really stood out, and none more so than HR’s inability to “wow” the C-Suite.
Less than 10% believed their most influential stakeholders were extremely satisfied by any of their HR Services. Moreover, when it comes to the most transformational part of the HR agenda – Talentmanagement – no one believed their C-Suite was extremely satisfied with any what they do at all.
Now you could try to argue whether we really need to deliver such high-levels of satisfaction for HR services with the Board. Do HR need to excel in what they do? Isn’t doing an okay job enough?
Clearly, the problem is that being okay 50% of the time isn’t a great story of success to take to the Boardroom. Especially when, at best, you are only excelling less than 10% of the time. Looking at it through the lens of the rest of the business, you’d hardly imagine a Customer Services Director surviving very long, if their services were achieving a response of “not or somewhat satisfying” half of the time…
Unfortunately, for HR, that’s where our survey respondents ranked Board level perception of all of their HR services.
Based on that perception, HR’s desire to become a Strategic Business Partner is, at best, nothing more than a pipe dream. At worst, it’s an impending catastrophe – especially, if we are to believe that strong talent pipelines, exceptional employer brand and employee engagement are critical to future business success.
Perhaps, it is no coincidence that the Boston Consulting Group had ‘Managing Talent’ ranked as the high-risk area for HR in their Future of HR in Europe Report 2015. Identified as the most critical HR capability, Managing Talent was placed firmly in the red zone, with the very highest importance, but the very lowest capability.
So, how are HR going to turn the boat around?
From the responses to our survey there are two strong forces HR are looking to harness.
Changing HR Technology
The first is HR Technology – 4 out of 5 of the factors believed to be critical to HR’s future success involved technology.
(1) Quality Analytics,
(2) Quality HR Systems,
(3) Strategic Influencing,
(4) Next Gen Technology and
(5) Business Systems Integration
Given the importance of having compelling data and intelligence at hand to influence the C-Suite, it is not surprising that HR Analytics rated at number 1. Although, given the competition for Analytics professionals in the IT market place overall, and the ability of many HR systems to provide high quality analytics – this may yet be harder to deliver than we may think. A survey released by the Data Warehousing Institute last year highlighted a clear shortage of available expertise. Worryingly – HR is bottom of the pile when it came to the business priorities for applying analytics expertise. Even if you get a system to provide quality analytics, you may be dependent on your supplier to harness the insights it provides.
The second focus for turning the boat highlighted by our survey centred on changing HR operations – primarily by increasing HR’s business alignment through reorganisation, introducing new and enhanced processes, and by upskilling HR teams.
The question is how much of a dependency there is between the changes to HR operations and HR technology? Will one happen without the other, or are they inextricably linked?
Our survey provides some interesting insights, which start to paint the picture.
HR systems in Europe are fragmented and there are low levels of consistency in HR platforms. Less than 20% have very standardised systems. One of the obvious flipsides is that 80% do not have very standardised systems – 67% have only partially standardised HR systems and 14% have completely non-standardised HR systems.
Given the strong bias to Federated HR organisations in Europe highlighted in the survey, that diversity of HR systems may not be so surprising. It is, however, potentially, a massive catalyst for change. Especially as the survey highlights that HR increasingly sees consistency of HR processes as one of the top priorities (4th in our survey).
When this is added to the desires we highlighted earlier, for analytics and service quality, it is difficult to see how much longer the inconsistency around HR platforms will last. Given the survey also highlights that up to 50% will be changing HR systems within the next 3 years, there will be a strong movement to consolidate platforms drive consistency and reduce cost. Moreover, changing systems are very likely to be the trigger for HR reorganisation, rather than the other way round.
The issue is whether new consolidated HR solutions will really deliver the Holy Grail of HR being a serious Strategic Business Partner? Can technology and HR reorganisation raise C-Suite level perception of what it does? Based on our survey, HR certainly seems to think it will.
Ultimately, though, HR is going to have some real “moments of truth” over the next few years. As the lens for choosing platforms shifts from core IT, transactional HR and stability over to agility, innovation, speed delivery, exceptional execution, intelligence in the machine, the quality of user experience, outsource partnering and proactive service models – where HR places its bets on HR Tech is becoming more critical than ever…. If HR wants to WOW the C-Suite with what it offers, and make the dream of being a Strategic Business Partner, a reality – it will need to choose its enabling technology very carefully indeed. Because if we believe the power of HR’s Transformational agenda, the game is not just about HR’s transactional efficiency. It’s about organisational success through its people. Which means the stakes around getting that HR systems choice, right or wrong, are potentially much bigger than they have ever been…
Interested in finding out more about the results of our survey?
- Growing importance of SaaS
- Critical realities for HR strategy & operations…
…are a just few of the topics we have uncovered for you.