How HR Must Evolve

Today's business leaders are under increasing pressure to be both lean and competitive, which means that every function must have a fundamental understanding of how to help the organization be more successful in the market. With regard to human resources, this means that both the function and its professionals must think and act as performance advisors to the business.

i4cp surveyed hundreds of HR professionals this summer, followed-up with interviews of over 70 CHROs and other senior HR executives, and conducted several in-person breakfast meetings throughout the United States to further understand how high-performance organizations envision HR to evolve in the future. Seven key themes emerged from all of that activity, which serve as an outline for building a market-driven HR function and transitioning to a performance advisory role. The new i4cp report, The Future of HR: The Transition to Performance Advisor, now available exclusively to i4cp member organizations, explores each of those key themes; four of which are highlighted below.

Shift focus from relevance to business impact

Many HR leaders and professionals have struggled for years to establish HR’s relevancy in the view of senior leaders. But really, the question isn't about relevance of the function or gaining the now clichéd "seat at the table;" rather, the question should be: what impact has HR made on the business? Scott Sherman, CHRO at Allergan, says his approach begins with the key question: "What are the five things that will move the needle in generating revenue and customer satisfaction?"

Embrace the line manager's role in talent management

"Every people manager has a responsibility for hiring, developing, recognizing and retaining their talent," says J.C. Herrera, CHRO at McAfee. "They are the day-to-day person who each employee has interactions with, so they have to have the skill set to run through the HR stuff seamlessly."

Leaders of other high-performance organizations agree. In its recent study of Talent Management in the Trenches, i4cp discovered high correlations to market performance when talent management tools, processes and services are designed and developed in partnership between HR and line managers. When talent management activities are executed with a balance of responsibilities between HR and line managers, a high correlation with performance again emerged.

As Campbell Soup Company CHRO Bob Morrissey explains, "... we shifted our focus to manager quality, defining the role of the manager, giving them the confidence and competence to do it. That encourages them to take more responsibility, at the same time, taking some of the burden off HR."

Lead in global expansion

HR plays a pivotal role in ensuring success as organizations continue to expand globally. To ensure healthy and profitable growth, placing the right leaders in new markets is crucial. "Local is best" when it comes to determining who will lead in new markets, says Dan Henry, CHRO of Bright Horizons. Ultimately, though, using a mix of local leaders and expatriates is realistic, and the circumstances dictate the best approach. "We usually send expatriates only when there is not appropriate local talent," says Ben Dhaou, SVP of HR at SGS.

R must also lead the way when it comes to company culture. HR leaders understand more than most the delicate balance that organizations must strike when expanding into new locations and cultures. "One should never seek to impose a company culture at the expense of local considerations," suggests Hyatt CHRO Robb Webb. "It’s important to understand the culture of your company and carefully find a way for it to coexist with that of the community."

Determine the competencies HR business partners must have

With HR poised to move more decisively toward a functional structure that revolves around the business partner, the skills required of HR professionals are changing. Business and strategy capabilities account for more than half of the top competencies respondents say will be the most vital hallmarks of the future HR professional. HR business partners will "... need to understand how the business works and how the company makes money," says Sterling Bank’s EVP of HR Karla Gehlen.

Beyond business-specific skills, the need for certain qualitative competencies, such as self-awareness and self-confidence were also highlighted by i4cp's research. Dean Carter, CHRO at Sears Holdings, calls emotional intelligence an indispensible attribute for HR professionals. Pete Pesce, AT Kearney's CHRO, says that confidence is a must-have. And Tim Massa, VP of HR at Kroger, declares courage the number one competency for tomorrow's HR professionals.

From changes in the very structure of the function, to the elevation of analytics and the evolving role of the business partner, HR has much to look forward to as it transitions to greater strategic value creation in the coming five years.

Read more in The Future of HR: The Transition to Performance Advisor, and join the ongoing peer-driven conversations on these and other issues via i4cp’s research working groups. Topics include evidence-based HR, strategic workforce planning, employee engagement and performance management.