Redesigning the Next Generation Human Resources Function: Large businesses in every industry are finding that traditional and process-oriented approaches to human resources are no longer up to the task of dealing with the needs of the modern workforce. The few innovative brands that are taking steps towards adopting integrated HR services and solutions are gaining a competitive edge over their less flexible competitors. At the same time, organizations that hesitate to undergo HR transformation find their functions becoming increasingly outdated in a critical and rapidly changing environment.
Understanding the Needs Behind Next Generation Human Resources Function
Just as the Industrial Revolution upended numerous industries in its heyday, the cloud-integrated, infrastructure-centric environment the big businesses find themselves in today threatens traditional business processes. Human Resources is no exception to this rule. Executives all over the world are seeing their expectations go unmet when it comes to managing human capital. Hence the need for next generation HR functions that:
- Allow HR business partners to become involved in corporate strategy.
- Offer integrated software tools for talent management on a large scale.
- Align talent to strategic objectives in an efficient way.
- Organize new data for ease of access and insights
Let’s take a look at the implications of each of these needs in a modern HR environment.
Using Next Generation Human Resources Function as a Corporate Strategy Element
It should come as no surprise that CEOs of large enterprises value human capital immensely—any organization is only as good as the people who make it up. In the modern business landscape, then, there is little logic in leaving HR out of corporate strategy considerations.
An organizational framework that includes HR at the executive decision-making level is just one of the drivers that can produce a robust HR transformation. A study by CEB shows that the vast majority of human resources officers expect this level of engagement from their business partners, yet less than twenty percent feel like it is happening.
The same study states that organizations with improved strategic competency in human resources can benefit from a much wider range of business partner services. The improved dynamic and reduction of workflow barriers can translate to hundreds of millions of dollars in additional revenue for the average Fortune 500 company.
Next generation HR officers are empowered to determine how particular strategic value can be created through human capital. From there, the question is “how can HR drive this strategic value?” through its design principles and operating model.
It is not uncommon for top executives to make the mistake of thinking that next generation HR transformation is the same as next generation HR software. This could not be further than the truth. Only turning HR transformation into a matter of software acquisition rarely produces desirable results.
The key to reducing workflow barriers and making the most of the latest technology available is in information sharing. Like many other business processes, HR now has access to enormous quantities of data. Under traditional approaches, this can lead to “information overload.” Well-designed HR software can help mitigate this problem, but cannot solve it without being integrated with other business processes at the same time.
Organizations that take a coordinated approach to HR formalize processes for inter-departmental collaboration between HR officers and their non-HR peers. This collaborative process re-engineering allows integrated solutions to be developed and passed down through the workflow through compatible business processes.
Talent-Objective Alignment: Avoiding Mismanagement
One of the significant benefits to a formalized inter-departmental process is that formalized processes can be automated to some degree. This is where individual systems and software solutions beyond the scope of this article come into play. While we aren’t going to cover every possible integrated HR software solution on the market, we can form a generalization based on their common goal, which is aligning talent to strategic objectives.
An organization that gives human resources a role in developing strategic goals and puts integrated tools into place can flexibly maintain its human capital per those objectives. Next generation HR officers are empowered to determine how specific strategic values can be created through human capital. From there, the question is “how can HR drive this strategic value?” through its design principles and operating model.
By maintaining a goal-oriented position instead of the traditional process-oriented one, talent mismanagement is effectively null.
Using Data to Transform the HR Experience
Human resources can do much more than simply “hire the right people” to meet strategic objectives. One of the ways this can occur is through effective data management and communication.
For example, if part of an organization’s strategic objective is product leadership, human resources can enable this by encouraging cross-boundary collaboration for product development teams. At the same time, the number of vertical and horizontal connections between departments in the organization can be increased while talent management gives special preference to entrepreneurs and innovators.
This differentiated next generation HR approach is radically progressive when compared to the 20th century way of doing business. Processes that were once tried-and-true are becoming increasingly obsolete as the benefits of new organizational integration become apparent.