Source | LinkedIn : By Ruud Rikhof
This article summarizes why the HR function needs a next stage of evolution. The approaches that we have developed and used over the last decades and no longer “fit for purpose” for a future that is going to be dramatically different. We will need to do a few things:
- Correct the mistakes in the HR models and approaches that are currently most prevalent
- Learn from the future (“not from the past”)
- Embrace technology in an unprecedented manner
HR Transformations, the concept of substantially similar and the power of the cloud
Over the past 20 years as industries have been impacted by massive change and many have seen the need to transform their HR function. Following Dave Ulrich’s highly acclaimed book “HR Champions” in the mid 90’s of the last century, and with the help of a few consulting firms, we have embarked on several waves of large-scale HR transformations. But what is the real business impact of all this effort. We know already for years that these projects tend to be ineffective and fall short in their goals complementing business transformation. Considering this, it is not surprising that CEB research tells us that 4 out of 5 companies are not satisfied with the outcome of their HR transformation efforts.
Why do so many companies embark on HR transformations? Many do it because they have an HR department that needs to keep up with changes in business strategy and their HR is known as inefficient and often even more ineffective. They begin with a benchmark which tends to make matters even worse as they are benchmarking against a “best in class” that also is inefficient and ineffective. A major driver for HR transformations was an attempt to streamline processes, execute faster, with fewer resources as a response to ever increasing pressure on HR headcount and most CHROs think about process alignment to deliver the same standard with a smaller HR team.
What would you do if you did not have an HR department and you were starting from scratch? What is a commodity, which activities give you a competitive edge? We believe that 80% of the activities in HR are substantially similar from company to company, not substantially different. So, if it is substantially similar, why would you need it “in house and customized” if you can also standardize and bundle this with other companies (and turn it into a business) or pass it on to someone else. Core HR processes need to be solid, not best-in-class, because they do not give a company a competitive edge. It is a simple and basic need that employees and line managers have.