Transforming HR into a Business Partner

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Transforming HR into a Business Partner

• ITU Regional Workshop on Strategic HR
  ManagementCairo 13-17 April 2008

Lecture 1
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Presentation Outline

• Market analysis and its impact on HR
• Business plan Structure-HR considerations
• Case study
• Transformation Statistics
• The Transformation Wave
• The Changing Role of HR
• The Business Partner Role
• Key Roles of HR as a Business Partner
• Conclusion

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National Advantage in HR
Firm Strategy Structure and Rivalry
Chance
Domestic Demand Conditions
Factor Conditions
Related and Supporting Industries
Government
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HR issues

• Competition in the labour market
• Rivalry between competitors
• Demographics (customers)
• Age structure, lifelong employment?
• Rokkies, who will be accepted?
• Staff from related industries
• Domestic-versus regional global demand

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Industry CompetitionThe Five ForcesPressure
determine prices, cost, investments ,Hr capital
etc.
Threat of new Entrants
Rivalry among Existing Competititors
Bargaining Power of Suppliers
Bargaining Power of Buyers
Threat of Substitute Products
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New Entrants-Incumbent

• Offer better salary-promotion- trend
• New technology-support (capacity building)
• High responsibility deliver-promotion
• Competence gap
• Outsourcing of training-to whom
• The role of education systems

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Generic Strategies and impact on HR strategies
Competitive Advantage
Lower Cost Differentiation
Broad Target Narrow Target
Cost Leadership
Differentiation
Competitive Scope
Focused Differentiation
Cost Focus
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Statistics of HR Transformation

• 50 of organisations are in the middle of
  transforming their HR functions
• 12 completed their HR transformations in the
  past year
• Another 10 intend to begin the process in the
  next year.
• (Global HR Transformation Study, 2006, Mercer
  Human Resource Consulting)

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HR Transformation

• Process of Recreating the HR function so as to
  enhance HR contribution to the business
• It involves a shift from the internal operations
  (transactional, inward) activities to a more
  market perspective related performance.
• Over the years role has been evolving, but within
  its HR (Personnel) box. Current transformation is
  breaking outside the box
• Now HR transformation deals with issues of
  Organisational Renewal, Change Management,
  Business Success, Business intellegence, Culture,
  Behavioral Change.

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Transformation Wave

• 5-10 years ago focused on improving technology
  and service delivery, technology shift gives new
  aspects
• Competition, Time to market, Intranet,
  Restructuring/Rightsizing, Outsourcing
• This was the role of HR as a Consultant. Role did
  not transform the HR function into a business
  partner
• Now HR is being called up to deliver

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Transformation Wave

• HR Business Partnering model often started off
  as a Cost Saving initiative, responding to a
  Business Directive. This was the Driving force of
  the model in the 90s.
• Led to the introduction of IT Driven HR Services,
  Self- service forms processes etc.
• What started as a Cost Reduction/Competition
  Program ended up as a Revitalisation of the
  whole HR Activity
• Now HR is the driving the vision-strategy targets
• Closer follow up related to market changes

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Changing Role of HR
HR ROLE/CONTRIBUTION
BUSINESSPARTNER
CONSULTANT
TRANSACTIONAL
LOW VALUE
HIGH VALUE
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Changing Role of HR
TRANSACTIONAL Inform Police Control
Reactive
CONSULTANT Advise Solutions Inward Reactive
BUSINESS PARTNER Integrate
Strategy Outward Proactive
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Transactional example of HR

• Delivering a Service to a client or end user.
• Recruit an Engineer
• Investigate a discipline Case
• Book Training for the participants to the Cairo
  Workshop
• Provide Consulting
• Plus all the other Record keeping Functions

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CONSULTANT

• Provide HR to a Business Unit in order to solve a
  specific problem.
• Define competence requirements
• Giving advice in dealing with specific issues
  eg. How to stop a Competitor from poaching your
  staff How to create a Customer Care Culture.

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PARTNER

• Working with the top Management Team as a
  partner in
• Participating in defining Business Strategy.
• Actively live up to Vision and mission statement
• Influencing change in Strategy in view of the
  organizations Talent Base, or ability to build
  one in the short Term.
• Develop capacity building
• Implementing the HR component of the Business
  Strategy.

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Strategist and Steward

• Deloitte Report (2007) on the Evolving Role of
  the Chief Human Resources Officer (CHRO).
• Todays CHRO is a leader who not only manages the
  HR function, but also collaborates with the CEO
  and Board of Directors on a range of Strategic
  issues.
• They play a role in building and shaping not
  just staffing- enterprise Strategy.

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The Deloitte Frameworkfor The Roles of the CHRO

• 1. Workforce Strategist
• 2. Organisational and Performance Conductor
• 3. HR Service Delivery Owner
• 4. Compliance and Governance Regulator

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Discuss priorities

• What priorities in you county ?
• Depending on situation
• Process job design
• Define future workforce size-competence
• Capacity building
• Define redundancy

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1. WORKFORCE STRATEGIST

• Crafting workforce Strategies with an eye on
  global trends
• Conscious of the Challenge of Attraction and
  Nurturing Capacity building
• Next Generation Perspective including technology
  shift
• Understanding of the Needs of Todays Workforce

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2. Organisational and Performance Conductor

• Making choices among options of maximizing
  performance of workforce
• CHRO must be a Rewards Program Structuring the
  job design, a change Master

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3. HR Service Delivery Owner

• Still Delivering HR Admin and operations in a
  Cost Effective way.
• A mix of Self Service operations, use of Vendors
  (outsource) and integrating these into one whole.

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4. Compliance and Governance Regulator

• Work directly with the Board on HR Issues
  relating to Risk Mgt, Business intelligence,
  Ethics, Integrity
• Assist Board with Member Selection, Executive
  Compensation, Succession Planning, etc.
• Interpretation of regulatory issues

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Strategist and Coach

• Help CEO leverage global talent trends as viable
  opportunities (fast changes).
• They lead the change towards new working methods
  with more individual responsibility.
• They identify the kind of culture the company
  should have, then define that culture, and
  supports the environment that emerges.

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What is HR as a business partner??

• Must manage people (Talent Management)
• Identify skills required within people in the
  organisation (Competency Profiling)
• Develop and supply quality executives (Leadership
  Development)

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What is HR as a business partner??

• Motivate and retain key players (Human Capital)
  so that they perform at their best
• Maintaining and improving companys image and
  being an attractive employer Exemplify
• Be involved at the sharp end of the business,
  (time to market etc)

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Understanding the business

• Being concerned with the bottom line and impact
  of any decision on profitability.
• The business environment (SWOT, competitor moves,
  market share, etc.)
• Understanding customers, customer profiles
  (segments) and their needs. Why ?

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Four Key Roles of HR as a Business Partner

• HR as Capacity building force
• HR as Change Manager (Opportunities-Steering)
• HR as Relationship Builder
• HR maintaining Human Capital

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HR as Capacity builder

• Participate in formulation of list of
  organisational and individual competencies linked
  to the corporate goals or strategies and support
  systems
• Develop access to information and has key role
  in information dissemination (analyze shifts in
  market and draw conclusions on HR need
• Identifying, nurturing, developing and untapping
  human talent.

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HR as Knowledge Facilitator

• This assumes HR is involved in the formulation of
  the Organisations Vision, Mission and Business
  Strategy
• Must be part of the Management to advise on what
  is possible given the stock of talent and
  capacities available in the oganisation
• Propose Strategies that best attracts and retains
  the talent that will deliver on the Business
  Objectives.

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HR as Relationship builder

• Both internal and external customers (follow
  market demand
• Supply Chain Management (in telecoms this is
  important for maintenance of brand image and
  brand integrity
• Branding ? is a powerful tool for promoting
  Culture. A growing school of thought is that
  Branding is as much an HR responsibility as it is
  a PR function because of its power to attract and
  retain employees.
• Managing diversity

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HR as Relationship Builder Managing Diversity

• Many organisations now operating in different
  cultural environments and markets and different
  owners requirements
• MTN is in Africa, the Middle East. Vodafone is in
  UK, Europe, South Africa, Kenya. France Telecom
  has just won the bid for Telkom Kenya, and will
  bring their own management styles and culture.

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HR as Human Capacity builder

• Career Management
• Facilitate progression of staff based on their
  competencies, desires and contribution to
  organisational goals
• Capcity Building (job design) in anticipation of
  future needs

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So What is Strategic Human Resources Mnagement??

• It is about getting the Human Resources FUNCTION
  INTEGRATED within the Business.
• It is about INVOLVEMENT in the Business Strategy
  Formulation Process.
• It is about being listened to and heard, because
  Human Capital is the only Sustainable source of
  Competitive Advantage at the Disposal of the
  Organisation.

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So What is Strategic Human Resources managing??

• But it is up to the HR Function to rise to this
  Challenge.
• In fact, it is up to the HR professionals to rise
  to the new challenge of the HR function.
• After all, this is what we have been asking for.

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CONCLUSION

• As Human Capital Related Issues Continue to
  Challenge on Organisations overall Strategy, The
  Human Resources manager must become a familiar
  face in the Management Team and a potent force in
  the boardroom.

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CONCLUSION

• Findings however reveal a troubling gulf between
  the needs of the business and the ability of HR
  to respond.
• This is forcing companies to rethink their
  approach to the recruitment, training and
  development of HR