Next Generation HR to Drive Business Value
SHANGHAI, Aug. 13 /PRNewswire-Asia/ -- Hewitt recently released the 2009 HR Monthly Watch report. Based on the responses from 220 participant organizations, the June report reveals that the overall situation is turning better.
By the end of June, actual salary increase was 5.8% for 2009, slightly higher than last month. The prevalence of canceling working hour control kept increasing in the past half of the year. More than 86% of participants have no plan to control working hours across China in June. Though implementing mandatory annual leave was still the most prevalent practice among all measures taken, its percentage kept dropping, around 5.5% in June.
Human resources has been at the proverbial crossroads - between demonstrating strategic value and providing traditional HR services - for far too long. As our business environment is becoming more volatile and complex in the cycle of recession and recovery, Hewitt research shows the need for leadership on talent and organizational issues is greater than ever. Business and HR leaders alike are asking, “What’s next for HR?”
Next Generation HR should focus on the outcomes that function can deliver rather than what the function does. It shifts focus away from siloed functional solutions to holistic human capital solutions that matter most for the business. It requires that function adopt an external focus around the business strategy, its customers and investors. Simply put, HR must learn to think more like business: Where are we in terms of survival and thriving? Where are we heading over the next three to five years? What do customers and investors expect from the business? What are the talent and organizational requirements needed to achieve those objectives? How do we best manage our resources to improve financial performance?
Amid these challenges, we are seeing breakthroughs in leading HR organizations. They are moving beyond providing the value of HR to improving the value of the business. They obsessively manage their talent to ensure they can execute on their business strategy, they focus on alignment between customer and investor value propositions and capabilities that exist in the organization. And they pay careful attention to how to harnesses the knowledge
and creativity of the workforce. They are placing their bets on four key areas:
-- Human Capital R&D: Take the lead in advancing data-mining and
predictive modeling of human capital processes, not retrospective
visiting, to identify new business insights.
-- Talent Engine: Redefine and expand focus in the area by managing a
seamless “human capital supply chain”, not deep siloed functions, to
ensure the organization has a ready supply of key capabilities.
-- High Performance: Take accountability for driving, not facilitating,
business performance at the organizational, team and individual level.
-- Organizational Steward: Assume a new role in building a sense of
community, trust, integrity and even spiritual meaning of the
organization.
To improve the odds of winning in key areas, progressive HR leaders are redirecting their current focus away from functional initiatives (i.e., benefits, compensation, staffing, and training) to more integrated strategies designed to solve specific business problems (i.e., improving talent supply, increasing workforce performance, or ensuring that the business has the capacities it needs to deliver on its strategy). It all began with cross-functional teams working together on critical initiatives. But, in many cases, HR needs to go further. This means breaking down traditional HR silos and creating teams that are not only charged with studying the challenges facing them, but are held accountable for delivering business solutions. What’s more, they are partnering closely with business leaders to develop solutions that solve specific business needs, thereby delivering greater value.
Business leaders are not only expecting, but demanding that HR focus on critical value-creating processes that drive key business outcomes. These outcomes are similar across most organizations. However, the emphasis or importance of these outcomes may vary greatly, depending on business maturing, goals and objectives. In a high growth industry, talent supply may take high priority. In a mature business looking to maintain market share while reducing operating expenses, improving workforce performance may be deemed most important. In any event, everything HR does must tie directly back to the outcomes it is determined to drive.
By building up value-creating processes, four crucial lessons emerge: 1) the importance of breakdown functional barriers; 2) assigning process owners with accountability for delivering outcomes; 3) incorporating customer preferences into product and service offerings, and 4) measuring the outcomes that HR delivers clearly, the current HR foundations like capacity, technology and governance may not be ready for this forward thinking concept, however some organizations are kicking off one or two projects and converting project deliverables into the new management model.
The Next Generation HR presents an enormous opportunity for the functions to finally achieve real breakthroughs in many of the areas in has struggled with for years. It shatters the image of a fragmented, siloed HR function, instead promoting a system-thinking approach with a collective sense of outcomes. Most importantly, Next Generation HR helps those in the field understand how their contributions are aligned with what the business needs and with what the business demands from them.
About HR Monthly Watch
To track the impact of the economic crisis on businesses in China, Hewitt has launched HR Monthly Watch, a comprehensive study of how companies are, from an HR perspective, managing their business in the downturn. The study captures data points and insight around sales growth, working hours, compensation, benefits, training, performance, and a host of other factors. HR Monthly Watch provides up-to-date insights on dynamic market trends, and serves as a timely reference to guide decision-making.
The information in this report represents the views and opinions of 220 companies collected in June 2009.
About Hewitt Associates
Hewitt Associates (NYSE: HEW) provides leading organizations around the world with expert human resources consulting and outsourcing solutions to help them anticipate and solve their most complex benefits, talent, and related financial challenges. Hewitt consults with companies to design and implement a wide range of human resources, retirement, investment management, health management, compensation, and talent management strategies. As a leading outsourcing provider, Hewitt administers health care, retirement, payroll, and other HR programs to millions of employees, their families, and retirees. With a history of exceptional client service since 1940, Hewitt has offices in 33 countries and employs approximately 23,000 associates who are helping make the world a better place to work.
For more information please visit http://www.hewitt.com
