A lot of time is spent fretting over the role of human resources, both what it does today and what HR will be tomorrow.
I’ve always thought the role of HR was pretty simple — find great talent, hire great talent, nurture and grow great talent — but too many people (even a lot in HR themselves) don’t necessarily see HR as the go-to place when it comes to an organization’s talent.
That’s why this new study from The Conference Board and McKinsey & Company, titled the State of Human Capital 2012, is so important, because it lays out four (4) specific opportunities that human capital (HR) executives must seize if they are to effectively manage the global talent pool in an unpredictable business environment. They include:
- Look ahead: anticipate and plan for the human capital of tomorrow – “From the increased presence of the highly connected Millennial generation to the proliferation of the virtual office, tomorrow’s workplace will look very different from today’s.”
- Secure a steady, reliable pipeline for today’s skilled workers, and tomorrow’s leaders – “The war for talent continues, spurred by relatively high growth in emerging markets and the mismatch between worker skills and jobs in most regions of the world.”
- Develop strategies to re-energize your employees about what they do, and about what the organization stands for – “An engaged workforce can drive financial performance. Studies have shown that employees who are truly engaged are more likely to stay and contribute to the organization.”
- Ensure that the HR/HC function becomes more agile than the organization as a whole – “Organizational agility is an essential response to the volatility of today’s business environment. An MIT study shows that agile organizations grow revenue 37 percent faster and generate 30 percent higher profits than non-agile organizations.”
Why HR has struggled
“In today’s global marketplace, particularly in such a hostile and unpredictable business environment, it is imperative that human capital executives and departments place themselves at the heart of strategy development conversations,” said Rebecca L. Ray, Ph.D., Senior Vice President of Human Capital at The Conference Board, in a press release about the report. “Human Capital functions need to break out of their comfort zones, take risks and become a true business partner.”
Although I found the four opportunities that HR must seize interesting, the most intriguing part of the study to me were the listing of reasons why HR has had such limited progress in achieving the tangible results that it needs to deliver. See if you find any of these reasons oddly familiar:
- A lack of capability. From the report: “Human capital professionals are still unable to confidently and assertively solve business issues with line leaders and define the subsequent HC (human capital) implications.”
- A support function mindset. From the report: “Human capital staff continues to have a support-function mindset, a low tolerance for risk, and a limited sense of strategic ‘authorship.’ These attributes often result in relatively low status among executive peers, no budget for innovation, and a ‘zero defects’ mentality that means they rarely takes chances.
- An inability to relate the ROI or business impact of their function. From the report: “The difficulty many human capital professionals experience in talking the business language of ROI prevents them from gaining buy-in for innovation, no matter how much it is needed.”
“A real struggle to make a strategic difference”
“Right now, human capital departments are struggling to deal with a global talent shortage, adapt to a changing workforce, and develop new, flexible working models to meet the needs of tomorrow’s workers,” said Bryan Hancock, a Partner in McKinsey & Company’s Atlanta office, in the press release about the study.
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He added: “Human capital departments and executives are also facing a real struggle to make a strategic difference in their organizations. Only by partnering with other parts of the organization will they be able to address critical business issues with long-term, systemic impact on human capital.”
You can find a copy of the report here, and if nothing else, it is a sobering reminder of what you probably already know: HR needs to be a more business-oriented partner that is willing to take prudent risks and tackle the human capital needs that are going to be the key to driving our organizations ahead tomorrow.
But if you manage to get your hands on a copy of this report, be forewarned; it is a pointed and unvarnished detailing of the why HR doesn’t function right in most organizations, and what needs to be done to fix that and get things on the right track.
Don’t dig into it unless you want to be confronted by these uncomfortable truths — and, if you are finally ready to do something about them.