According to CEB research, the changing nature of work implies a lot of change for HR professionals. Heads of HR and their teams should take five steps in particular to help their firm make the most of the new work environment.
Attract and retain “enterprise contributors”: Data from surveys of HR and line managers show that the average company needs to improve employee performance by 27% just to hit the revenue and profitability targets set by senior managers. HR teams should look beyond conventional performance management based on improving individual performance and develop a cadre of “enterprise contributors”. These are employees who perform well individually and who accomplish tasks by working effectively with and through others.In fact, firms with enterprise contributors outperform their peers by 5% and 11% on year-over-year revenue and profit growth, respectively. Instead of trying to motivate employees to be enterprise contributors, HR should help their firms reconcile four paradoxes at the heart of performance management:
- Co-workers are asked to help each other, but they also compete for raises and promotions.
- Employees need autonomy, but they also require direction in prioritizing their activities.
- While collaboration tools can improve quality, they can slow execution.
- Employees value contributing, but being rewarded for it actually reduces their motivation.
Don’t make yourself appealing to all job candidates, just the good ones: The volume of people applying for jobs has risen by 33% in the past three years but the quality of applicants has not improved at all. In response, many firms launched employment branding campaigns to establish their company as “a great place to work,” and attract higher quality candidates.But this strategy – called “branding for appeal” – produces pools of applicants of whom only 28% could be classed as high quality. This is because firms just add yet more to the mass of accessible corporate information. And all these conflicting messages – some of which are false – means that 61% of applicants say they are more skeptical of what employers say about themselves than they were three years ago.Instead, HR teams should take a “branding for influence” approach to attract the best candidates. Those firms that brand for influence almost double the proportion of the applicant pool that can be classed as high quality.
Teach employees how to learn, not just what to learn: Given all of the above, firms must keep improving their learning and development activities. Most employees are now well aware that constant development is essential and think that the learning and development provided at their firm is sufficient: 84% say their “L&D solutions” are satisfying.But despite this, and the estimated $145 billion spent annually on training, fewer than half those investments result in tangible returns. In response to these poor figures, many firms provide more opportunities for development, across more channels, and advocate that employees take responsibility for their development. But it doesn’t work. Nearly three in four line managers report employees with high learning participation lack the right skills, and the extra learning activity creates a lot of waste. Every day, employees waste approximately 11% of their time on unproductive learning.
Make the HR team more valuable: Even though most senior executives are keen to stress how important their “people are to the business,” HR teams still struggle to provide the necessary support. Less than one-fifth of line managers rate HR as an effective partner.Many heads of HR have invested heavily in developing their HR teams to improve this sad statistic but most over invest in improving individuals and don’t do enough to change the organizational culture in which their teams must work. In particular, there are four organizational barriers that prevent HR business partners – those that support the line – from doing their jobs effectively. Remove these and firms can nearly double the number of effective HR business partners they employ.
Don’t mistake high-performing employees for high-potential employees: CEB data show that firms with stronger leaders enjoy twice the revenue and twice the profit growth. Yet a high-potential employee (HiPo) program, which is many firms’ main investment to develop their future leaders, is statistically more likely to fail than succeed. Data show that 50% of HR managers la ck confidence in their programs, and a staggering five in six HR managers are dissatisfied with the results.Despite evidence to the contrary, many firms still wrongly assume that a high performer is also a HiPo. In fact, only one-in-seven high performers are HiPos. The reason mistakes are so often made is that there is rarely an objective selection process in place; decisions are rarely backed by any science. Those involved in the HiPo selection process should assess employees based on their ability, aspiration, and engagement with the firm.
Where companies can start
- Design the HR organization to deliver solutions: For many businesses, it is time to redesign HR with a focus on consulting and service delivery, not just efficiency of administration. HR business partners must become trusted business advisors with the requisite skills to analyze, consult, and resolve critical business issues.
- Create business-integrated “networks of excellence.” Rather than locating HR specialists in central teams, embed them into the business—but coordinate them by building a strong network of expertise. Recruitment, development, employee relations, and coaching are all strategic programs that should be centrally coordinated but locally implemented. When specialists in these areas live and work close to the business, their impact is greatly enhanced.
- Make HR a talent and leadership magnet: How do people get HR jobs in your company? If they accidentally move into HR, this may be holding you back. Create rigorous assessments for top HR staff and rotate high performers from the business into HR to create a magnet for strong leaders.
- Invest in HR development and skills as if the business depended on it: HR professionals at all levels need continuous professional development. Create your own “HR university” and invest in professional development to make sure your HR team is constantly sharpening its own saw and developing the necessary skills to survive. Focus on capabilities such as business acumen, consulting and project management skills, organizational design and change, and HR analytical skills.