There has never been a more important time for HR to claim its seat at the ‘top table’, but to do that it must first address its purpose, focus, and processes.
You can love them, hate them, but not avoid them!!! HR as a role has been the target of many memes and jokes but they are the most integral part of any company’s functions. HR has moved on from its role as a support system to the role of holding an organization together, now.
Lavanya Iyengar speaks to Nigel Penny, Founder, and Managing Director, NSP Strategy Facilitation Ltd, to understand the changing facets of the HR role. Mr. Penny is a global consultant with over 40 years of experience in dealing with strategy and people issues across 35 + countries. An ex-partner in KPMG and ex-Vice President of Balanced Scorecard Collaborative, he works with organizations to ask the ‘hard questions and help them build future-ready organizational management processes.
Your role as a consultant has made you privy to the inner working of many organizations. From your vast expertise, what is the change you are envisaging in the HR role now?
Nigel Penny: Human Resources functions worldwide need to step back and take a fundamental look at their future role in their respective enterprises. This needs to involve their purpose, focus, and processes.
During the pandemic, we saw huge shifts in employee working practices. But the challenges now facing HR go far beyond just institutionalizing home/office working flexibility. The challenge pivots around whether organizations can deliver the required human resources to support changing organizational strategies. This embraces both whether we can recruit and retain the numbers required and whether those employees will have the necessary skills and engagement levels to be effective in delivering on organizational requirements.
The future potential volatility in the workforce is well illustrated by a chart from a recent McKinsey survey:
The above chart makes for stark reading.
Overall, up to 40% of your workforce may be considering a job move within the next 3-6 months.
So, what are you doing to respond??????
HR has numerous challenges to be faced and the foremost amongst them is recruitment. They are under vast pressure to fulfill many roles and functions with a quick TAT. What are the questions which need to be asked before they fill the number requirements for the future workforce?
Nigel Penny: Many HR functions are still not properly aligned with their organization’s strategic planning process. You need to fully understand what is planned in the strategy, to prepare a proper workforce plan. The Human Resource team should align itself with the strategic planning department to understand future growth. HR needs to understand the process, and how to cascade the organizational strategy to each functional business area to establish a detailed set of future workforce numbers and skills.
The most important next question is: How will you equip your recruitment team to secure the ‘right’ people?
Nigel Penny: Responding to recruitment requests from individual functions within your organization on an ad-hoc basis is not planning! Do you need to define your philosophy between external recruitment and internal development? The answer to this question shapes so many aspects of human resource management within the organization. If there is a bias towards recruitment from the market, have you factored in availability at the right time and the potential impact on workforce costs? If it’s more about internal development, then is your training department properly aligned with future workforce skill needs? None of this happens by chance, and the lack of properly articulated policies and integrated human resource processes will not only fail to deliver on the human resource requirement but will result in wasted spending.
That being true, what are the steps to be taken to retain organizational knowledge?
Nigel Penny: High levels of turnover may see significant organizational knowledge lost. You need to identify the critical value of creating roles within your organization and put processes in place to develop and retain key talent in those roles. Your current employee performance management framework should be integrated with a broader-based talent development program. Too often, we still find employee performance management frameworks that are driven by retrospective scoring frameworks whose prime focus is to facilitate annual bonus calculations. Not only are these inefficient and universally disliked by managers and employees, but they fail as motivators and there is no evidence that performance improvement results.
As an expert who has worked on the balanced scorecard team, Can you give your view on what is the clear step to be taken by HR in bridging this knowledge gap?
Nigel Penny: Clearly, we need to revisit our HR processes in many organizations. We need to move to a fully integrated set of processes that conform to a common logic for workforce development. Fragmented HR processes that do not talk to each other, and do not talk effectively to organizational strategy planning will not deliver. There has never been a more important time for HR to claim its seat at the ‘top table’, but to do that it must first address its purpose, focus, and processes. There is no cookie-cutter solution but failing to act now will undermine an organization’s success in a future filled with challenges and change.
