1.  “The Future of HR” from a shareholders’ perspective -  from Dr John Sullivan

What would HR look like if it were redesigned by shareholders? This is a really interesting perspective on the role of HR from Dr John Sullivan.

2.  The Future Of HRM Software: Embedded Intelligence - from Naomi Bloom, at the In Full Bloom blog

This provides some great insights into the future of HRM software from one of the most knowledgeable experts in the industry.

3. DIY for HRO – from Mark Stelzner, at Infexion Advisor

4.  10 Lessons Learned in the Quest to Become Strategic in HR- from Cathy Missildine Martin at the Profitability Through Human Capital Blog

Great learnings expressed clearly and without jargon.

5. The Holy Grail…Human Capital Development Aligned to Strategy - from J. Keith Dunbar at the DNA of Human Capital

6.  Lynda Tyler Cagni, ex Ermenegildo Zegno on HR 2.0 – from Jon Ingham's Strategic HCM Blog

This is a great case study providing useful insights.

7. HR Technology Trends for 2010  – from John Sumser on HR Examiner

8. Government sets up efficiency hit squad – and warns HR to prepare for a storm – from Rick at Flip Chart Fairy Tales

9. Could the Whitehall reshuffle lead to one massive government back office?  – from Inside Outsourcing at Computer Weekly

10.  Met chief: HR could be “priced out as an expensive overhead” – interview with Martin Tiplady, HR Review

1.  Two superb videos charting social change next generation social media -  from Andy Headworth, Sirona Says Blog

Social Media is important in transforming HR and people management. This article has two superb videos on next Generation Media, from an excellent blog. Andy always has a finger on the pulse of new developments in social media and recruitment.

2.  Interview with David Ulrich – from Sharlyn Lauby, HR Bartender

It is great to see Professor David Ulrich using social media with an online Q&A with Sharlyn at the HR Bartender blog. David is promoting his new book written with his wife, Wendy, called the “Why of Work”.

3. If you only had one source to find candidates – from Boolean Black Belt

The question is “if you were limited to only 1 method/specific source for identifying candidates to contact, engage and recruit, which would you choose, and why? “ Follow the link to find out the responses which say a lot about how social media is transforming People Management.

4.  Go Lean: Minimize customizations and reduce overall TCO in Oracle ERP implementation (Part 1) – from Infosys Oracle Blog

IT project implementations do not have a good record of delivering on time and to budget. Here are some good tips about minimising ERP customisations and reducing Total Cost of Ownership (TCO). This team are Oracle experts, but the lessons apply to other applications.  Also of interest, check out our Top 5 Reasons HR Projects Fail.

5. HRO Market update – from Linda Merritt, HRO Insights – Nelson Hall

6.  New SaaS/HRO service from Caliber Point – from Information Week

A new SaaS/HRO Service has been launched by the techies at Caliber Point. Rupublic is a multi-tenanted HR Platform, available as Software as a Service (SaaS), based on the latest Oracle HR Software, with a HR Outsourcing service. For some organisations this could be a dream solution – no technology maintenance overheads or systems administrators plus variable costing. Contact us if you want a more detailed view of the pros and cons of this new service.

7.   Top 50 HR Blogs to watch in 2010 – from Evan Carmichael
For those who have read the HR Transformer Blog and still want to read more interesting articles on HR and Talent, we add two links to recent Top HR Bloggers lists, put together by Fistful of Talent and Evan Carmichael – some good reads here including links to our favourite bloggers. Spot any HR Transformers?

8.  Managing Tomorrow Today – from Mary Ann Downey at i4cp

9.  10 career management tips in the age of job fear – from Lance Haun, Rehaul
Here are 10 Career Management Tips from Lance’s Rehaul blog, it’s always worth reflecting on where we are heading in any economic environment. This includes the intriguing advice "Don’t be a lurker or a slug"

10.  One FTE
And finally – we have to end on a funny one which brightened up our day, thanks to Laurie @PunkRockHR for this tip on Twitter. 1.00 FTE - a very dry look at corporate life, check out their Top 10.

April has been a bumper month for a good selection of HR Transformation related articles, from using 6 Sigma in recruitment, optimising your HR Shared Services, to how the iPad can help HR.
Here is a a leading question, 'Are Performance Management appraisals the Great Evil?'  Election fever is gripping the UK and the main political parties are locking horns in a final show down.  The last three articles here deal with UK Government policies including a comparison of the main parties manifestos on skills and training.

1.  6 Sigma Recruiting – from Jason Buss, The Talent Buzz

6-Sigma can work in HR when used in the right context, with the right skills. It works really well with higher volume for repeatable processes like recruitment. In the right hands, the results are dramatic and can pay for your Black Belt many times over.  This article also includes a useful slide deck.

2.  HR Shared Services Optimisation: Attaining the full potential of HR Shared Services – from Outsourcing World

This is a good post about how to get the most out of HR Shared Services. You have gone through the blood, sweat and tears of getting the model working, so what do you do next? Here are 10 excellent ideas and suggested initiatives. Find out more about “leaner, not meaner HR” and “HR orphans”.

3.  5 ways to torpedo your next HR sale – from Mark Stelzner, Inflexion Advisors
We often facilitate vendor evaluations for HR Services and we've seen lots of pitches over the years ranging from the incredible to the incredulous, to the downright dreadful. This is a candid post which outlines the ways HR vendors can “fail spectacularly”.   Do you recognise any of these “torpedos” ? We do too.

4.  Workday and the unspoken benefits of SaaS – from Phil Wainewright, ZDNet
This is a good article about Software as a Service (SaaS).

“Our estimate is Workday is at least 25%, perhaps 50% cheaper than on-premise competitors Oracle or SAP, mainly due to the simpler implementation and process configuration of the Workday solution.” according to Aviva.

Cost is one of many issues when considering future HR Tech options, but the above statement is a powerful claim.  What does your IT Director think about SaaS ?

5.  How the iPad Can Change HR – from Jason Corsello, KI OnDemand
Is an iPad a big iPod or a laptop with a big screen? I am not sure because I am still waiting for my evaluation copy. (subtle hint to Apple)

Large proportions of the workforce in retail & manufacturing industries have limited access to PCs.  In the design of HR Operating models a big challenge is how to get these employees to access HR service channels, including self-service HR applications and tools to manage vacancies, book courses and update personal info. 

We need to use all the ‘pull factors’ we can to get employees to use HR services and providing a few iPads could be worth considering for certain groups of.  Jason outlines examples from streamlining mundane and repetitive forms, interactive training, performance management and perhaps the area with most potential ‘mobilising HR’.

6.  Performance Evaluations: "The Great Evil"? – from Mike Haberman, HR Observations Blog
Is Performance Management The Great Evil? Systems Thinkers think so and it would seem that many employees think so too. Does the effort pay off and should HR focus their efforts on other initiatives to improve employee performance?

"This corporate sham is one of the most insidious, most damaging, and yet most ubiquitous of corporate activities. Everybody does it, and almost everyone who's evaluated hates it. It's a pretentious, bogus practice that produces absolutely nothing that any thinking executive should call a corporate plus." Quoted in the article from authors Samual A. Culbert and Lawerence Rout.

Strong words indeed, but a thought provoking article and interesting discussion which represents different views on the subject.

7.  If eLearning is still not seen as effective – how will social learning take off?- from Martin Couzins, XpertHR
eLearning has proven to be a cost-effective way to deliver training in  certain areas and the potential for Social Learning is great given the tools, connectivity and knowledge we now have at our fingertips.

However a recent survey by CIPD, on UK Training methods, found that eLearning was floundering at the bottom of the pile on 12% (it was 7% in 2009).  Martin asks a really good question, if eLearning is still not seen as effective – how will social learning take off?
Another question for us is :- if eLearning is a cost-effective way to deliver training, why isn't it used more by organisations?

8.  Election 2010 Briefing – skills and training – from CIPD
The UK election is on May 6th, but when choosing which party to vote for, how important are their policies on Skills and Training?

To grow the economy, enabling the workforce with the right skills and training is absolutely key.   This is a useful three page summary of the main parties manifestos on skills and training. It includes apprenticeships, youth unemployment and internships.

9.  Don’t bank on efficiency savings – from Flip Chart Fairy Tales
The Conservatives say they can get £12 billion more efficiency savings out of the UK public sector than the government has claimed.    “Back-office efficiencies” are proposed by all politicians to reduce the deficit to a more manageable level.  Rick points out the problem with efficiency savings is that they are "probably unachievable".  Developing a realistic business case is difficult work but Rick suggsts the politicians need a reality check.  For more on HR efficiencies in the public sector, see our article about Government Benchmarks – a Government Health Warning.

10.  HR Transformation in Local Government - from Nicola Grimshaw, director at Digby Morgan writing in Changeboard
This is a good article about HR Transformation trends in UK Local Government.  It picks up on trends in collaborative working, headcount freezes and outsourcing.  Nicola reckons that 75% of all local authorities are in the process of adopting an Ulrich style HR Operating Model.

We hope you enjoyed our latest and greatest HR Transformation Articles for April.

Many thanks for the feedback for our Top 10 HR Transformation Articles from March, as always we would welcome any suggested articles, or follow us on Twitter @AndySpence.

We are officially in Spring and in this part of the Northern Hemisphere we have heard the sound of bleating lambs and seen the yellow blaze of cheery daffodils.  It is also a traditional time to blow out the cobwebs, air the mattress and perhaps get round to doing an organisational spring-clean.

Over time every department picks up activities that were meant to be ‘temporary’, done as a ‘workaround’ or done as part of an agreement between people who left years ago. These tasks still get done but we overlook the original purpose and value to the organisation. This stops us from doing tasks that are more productive or useful.

An exercise we find useful is a Stop, Start & Continue review.

- Simply list all the activities you do in a particular area, department or role.

- Decide which activities you will now STOP as they are no longer useful or add little value

- Determine which activities you just have to CONTINUE, as they keep the show on the road

- And then having created some spare capacity, ADD those activities that have been on the To Do list for much too long that you plan to START.

We have found this spring clean useful at an individual level, for a role e.g. HR Business Partner or for a function, e.g. Human Resources. In the context of HR Transformation, we often use this technique as a preliminary step before allocating HR activities to a part of the new organisation structure or in designing new roles. This exercise works well as a facilitated session with small groups. It sounds obvious but it is important to eliminate redundant activities before designing a new organisation.

Download our Stop, Start, Continue Worksheet below:

Here are some examples of Stop, Start, Continue activities that have come out of similar sessions with HR :-

Stop
 

Doing line managers work with employee performance issues

Organising the Christmas Party

Creating manual reports every month without automating

Renewing contracts without assessing the market

Manually entering data into a system because of that temporary system workaround from the upgrade in 2004

Continue

Delivering excellent employment advice

To work with business leaders to plan future scenarios

To coach teams on improving performance

Start

Investigate how social media tools can reduce the cost of recruitment

Determine and measure HR cost drivers

Find out what Managers really think about HR service

Develop a HR Monthly Dashboard

Reviewing contracts with HR suppliers

Let us know, what will you Stop, Start and Continue in 2010?

Spring is in the air and the forces of nature are unstoppable, perhaps inspired, some of our favourite bloggers, analysts and writers are in great form.  With talk of revolutions in HR, some systems thinking, the economics of Software as a Service (SaaS) and the use of artificial intelligence in HR.  In March there was also some big news in the HR Outsourcing industry, with Northgate Arinso acquiring Convergys HRO business. It’s always useful to have a peek over our shoulder at what the Finance community are up to. And while we are thinking of numbers (sort of), we get an economists ‘dismal’ view of management.

1 – The Evolution Debate and HR, from Andy Gebavi – Infusion Nation

Any transformation of an organization takes time, but which is better, a revolution in HR practices or a more evolutionary approach? It depends on the context, but Andy outlines the pros and cons of each approach. Our take is that systems and processes can be changed relatively quickly, but genuine transformation involves changing behaviours which generally evolves in step-changes over time.

2 – Some Days are Better than Others, from Glyn Lumley – The HR Maverick

Why are some days better than others? Glyn observes that when things go wrong “Most of the blame seems to be laid at the door of individual employees”.  But organisations are a complex interaction between people, processes, technology and the environment. Could it be something in the system?

3 – CFO = Value Integrator…CHCO = ?,  from J.Keith Dunbar – The DNA of Human Capital

Ulrich and colleagues have often explained that the change imperative in HR is also happening to different degrees in Finance and other functions.  Keith looks over the fence at the finance community with reference to an IBM Global Chief Financial Officer CFO study. The report refers to the CFO as a Value Integrator, so what does this make our Chief Human Capital Officer CHCO (not a title we like) or HR Director?

4 – Building the Perfect HR Team, from Trish McFarlane – HR Ringleader

Do you need a HR background to be in HR? We had a similar debate last year, with Do You Need a HR Background To Be a Successful HR Director. Trish, who during the day works as a HR Business Partner, asks the question, but goes further.  If you were a ‘fantasy HR Manager’, who would you have in your team? A view on HR skills that will be in demand in the future.

5 – The Management Con, from Chris Dillow – Stumbling and Mumbling

What are we doing highlighting articles from the ‘dismal science’ on the HR Transformer Blog. Well, everyone is interested in economics now aren’t they? Stumbling and Mumbling is a good read and Chris Dillow is a financial writer with attitude, who asks the question, What do Bosses Do? A good question, we may not agree with his answer, but always enjoy some NHS number crunching which he uses to illustrate his view.

6 – Top Reasons for ERP Project Delays –from ERPKO

Unclear critical paths, indecisive decision making and unrealistic expectations – sound familiar?   Most HR Transformation programmes involve getting the most out of HR Technology, including ERP systems such as Oracle or SAP. Delays in the roll-out of new systems are a big problem for HR. Loss of credibility, budget over-run, service delivery issues – the list goes on.  By now, we have seen them all, but do we know what causes them and how to prevent them happening? Sufficient planning, right skills at the right time and a robust governance model all help in our experience. (Thanks to @DougLubin and @rfsilva123 on Twitter for this article.)

7 – How SaaS makes a good free option, from Dennis Howlett, AccMan

Fed up with ERP delays? It might be worth reading more about SaaS. More and more  HR organizations are buying Software as a Service solutions such as SuccessFactors and Workday. Dennis considers the economic model and psychological appeal.  You need to understand the different commercial models as well as the fit with your business requirements. Some conversational topics to bring up with the IT Director when you meet her in the lift!  This article was spotted in our HR-Transformers-Techies Twitter Group.

8 – Employee self-service – Can HR keep up with the pace of self-service technology?, from David Woods at HR Magazine.      

All the evidence points to self-service saving time and money yet take-up remains low and the technology is becoming ever more advanced. David Woods looks at why HR is dragging its feet. There is also evidence that self-service does not always save time and money but what caught our eye, was that Self-service is moving into artificial intelligence. Early adopter Aviva took the decision to launch an automated Ask HR response service for its 23,500 employees back in 2006.  Aviva employees type in a question and with the help of the language search engine, suitable answers are brought up instantly from the web-based knowledge base. Since installing Ask HR, 69% of all HR enquiries are now handled through the system, reducing telephone calls and allowing HR staff to focus on more complex queries.

9 – Northgate Arinso Buys its way to top spot in enterprise HRO and it only cost them 100m, from Horses for Sources

This was big news for the industry in March. By acquiring Convergys HRO business, Northgate Arinso have acquired US HR Service Centre Capability and ready made clients for its HRIS team. The news shakes up the HR Outsourcing industry and creates a Global Leader in an expanding industry with Headquarters in the UK. This was also covered on the day by the HR Transformer Blog – in HR Outsourcing – The Challenge of Picking Winners.   On the subject of industry news, you might already be familiar with the Horses for Sources blog, this has now spawned a new analyst firm, Horses for Sources. We are looking forward to reading the same quality of thinking on outsourcing trends in HR.

10 – Does HR Outsourcing Really Work? From Deloitte

Before we get too excited about HR Outsourcing, does HRO really work? Our friends at Deloitte say HR Outsourcing works when you do it right. The same answer would also apply if you replaced ‘HRO’ with any complex change programme such as a new IT system or move to HR Shared Services. However HRO has had some mixed results for a variety of reasons. The good news is that in 2010 we have over 10 years of lessons learned, case studies and battle scars to learn from….worth reading if you are considering outsourcing HR functions.
We hope you enjoyed our HR Transformation Articles for March.
 
Please suggest articles and HR Transformers worth following on Twitter @AndySpence.
 
And finally, Happy Easter!

So you are no longer a HR Twitter Virgin, you have got yourself a Twitter username, added your appealing bio and uploaded your best photo. You may also have found your favourite celebrity tweeter, or your favourite magazines on Twitter.

Now it’s time to really dig a bit deeper into your particular ‘thing’. At Glass Bead Consulting , our particular ‘thing’ is HR Transformation , improving people management in organisations by applying various techniques and tools in technology, skills and solutions. This includes a broad group of people including HR professionals, writers, academics, consultants, vendors, technologists and various others who are interested in improving people management.

We have created different lists of ‘HR Transformers’ using a feature called Twitter Lists, primarily so we can read useful and relevant twitter streams. Many of these people have their own blogs and publications and we thought it might be useful to share these with you, so you can benefit from their views, resources and links. The lists are a starting point and new people are joining Twitter all the time – so please suggest others to follow and we will update.

HR Transformers on Twitter

1. HR Transformers-Bloggers Bloggers with a passion for HR transformation

2. HR Transformers-Analysts Industry analysts who have a focus on HR Technology, Human Capital Management or HR Outsourcing

3. HR Transformers-Writers HR Journalists or writers with an interest for HR Transformation

4. HR Transformers Techies HR Technology experts or suppliers

5. HR Transformers-Consultants HR consultants with a focus on HR Transformation

6. HR Transformers HR Outsourcing HR and BPO outsourcing vendors and commentators

7. HR Transformers Change Experts in managing change

8. HR Transformers OD Experts in Organisational Design

9. HR Publications HR Magazines and journals

10. Leadership Experts in leadership

11. Recruiters Those involved in recruitment with an interest in social media

We have also consolidated all of these lists to our own Listorious HR Transformers List which is a useful Twitter resource.

Please comment below on any other HR Transformers you recommend to follow on Twitter and we will add to the lists. Self-promotion is actively encouraged, especially for the shy and retiring Brits.

The potential benefits of Human Resource Outsourcing (HRO), have been well documented but not always delivered. These include reducing cost, avoiding HR technology investment, re-aligning HR towards delivering more strategy and improving HR services. (see Top 5 Benefits of HR Outsourcing). Choosing a vendor that matches your requirements and will work with your culture is difficult enough, but it also important to take a view on who the likely ‘winners’ will be in the HRO industry.

At the moment, in supporting our clients as they look at their HR Transformation options, we think one of the biggest challenges is that of ‘picking winners’. Whether considering HR Outsourcing for the first time, re-energising an existing contract or simply bringing the whole show back in-house. A wrong decision now could mean you are lumbered with the wrong vendor, solution or the wrong technology platform for the next 7-10 years. This has always been a challenge, yet is more significant now with big changes in the HRO industry. Nothing distracts the vendor’s senior management team more than mergers, acquisitions and a major change in direction.

Lessons have been learnt since the first generation HRO contracts of ten years ago, such as BP/Exult (for an interesting account, see The Great Vendor Bender free login required to HRO Today website) which has renewed its contract with Hewitt, following an ‘about-turn’ of its plans. As David Ulrich, a professor at the University of Michigan’s Ross School of Business reflected, ‘Often the first pancakes or first batch of cookies do not come out well.’

The giant HRO deal between Accenture and Unilever in 2006 has now been ‘digested’ following some implementation challenges. Since then, the HRO market has fragmented with some big players moving back to their ‘comfort zone’, focusing on their core markets and strengths, for example, Hewitt.

Other major changes in the industry include acquisitions such as ACS/Xerox, more ‘best-in-breed’ deals and the rapid rise of Recruitment Process Outsourcing (RPO), see for example, RPO ends 2009 with a big bang and begins 2010 on a high note. Buyers are now more likely to have a HR Operating Model with multiple HR vendors covering areas such as HRIS, Payroll and RPO. In fact increasingly more and more is up for grabs in HR outsourcing, see the People Management Guide to Outsourcing – Out of the Ordinary, including our thoughts on what should be outsourced and what should be retained.

As we predicted in our attempt to peer into the future of HR in our ‘Glass Bead Crystal Ball’, Future of HR Operating Models, there is still more consolidation to come in this $6 Billion Global industry. For more info, see HRO provider acquisitions on the rise from HR Outsourcing insights blog.

Hot off the press, Northgate Arinso have acquired the HR Management Services of Convergys. This is a bold bet on the future of the HRO market, and should combine the HR Service Delivery capability of Convergys US and European HR Service Centers, with Northgate Arinsos innovation and technical strengths. See Horses for Sources, the new Analyst firm in the starting stalls, with their take on the deal NorthgateArinso buys its way to top spot in Enterprise HRO and it only cost them $100m.

In picking a vendor, ‘financial stability’ has always been important in our Glass Bead Consulting weighted evaluation criteria, but now this has a much higher rating than 4 or 5 years ago. The rare AAA credit rating of ADP has a bigger pull than ever before.

Many organisations are attracted to the ‘on-demand’ HR outsourcing model with a view that there is no need to host the technology yourself with employees accessing services over the internet. This reduces some of the risks of picking the right technology platform, as it’s taken out of your hands. See for example, Northgate Arinsos 7 year HRO contract with Astra Zeneca, in 105 countries and 65,000 employees, based on their ‘euHReka platform’.

So the HRO market is changing all the time and the benefits and risks of HR Outsourcing will vary for each organisation, its requirements and context.

To minimise your risks in choosing a HRO vendor, consider the following :-

1. Think carefully about your Sourcing Strategy, will you put all your eggs in one basket or go for a best-of-breed approach with HR Processes? Make sure that the different vendors will be able to work with each other culturally and operate with compatible technology.
2. Establish your vendor evaluation criteria up front, work out as an organisation what are the relative weightings and identify any ‘deal-breakers’.
3. Work with your legal team to develop flexibility into the contract, including break-clauses and allowing interfaces with other vendors.
4. Consider using an independent HR outsourcing advisor who will know the market well and take you straight through to the Request for Proposal short-listing based on your requirements.
5. In your vendor evaluation, listen carefully to the vendor’s answers on their long-term strategy for HR Outsourcing.

Finally, there are great benefits for HRO as part of a broader strategy of transforming HR or to reduce costs, but keep an eye on the marketplace and picking a winner will pay a healthy return.

There are more useful HR Outsourcing resources in the HR Transformation Knowledge Bank

Photo Credit :- Andy Spence – Brighton Races – October 2004

This is a summary of an original article published by Strategic HR Review.

In an economic downturn and subsequent recovery, change is inevitable for every organization. Effective Change Management is often a mix of the strategic and the practical. It can encompass everything from ensuring strategies are aligned, to making sure your weekly bulletin goes out on time, on message and to the right people. From a HR perspective, it is important to provide leadership and guidance by example and the following actions can help HR executives to lead the way during the change process.

1. Define and deliver your HR strategy

Make sure that HR strategy is consistent with the overall business strategy, and where necessary provide input and ideas into the overall business strategy. Make sure you achieve buy-in from key stakeholders. This can be achieved by clearly outlining your proposed improvements and delivering on project ideas early on. Part of aligning HR strategy with the overall business strategy will be achieved by sharpening your HR operating model and asking how each HR role will support your organization in the next 12 months. You will be better able to respond quickly to organizational changes with better HR systems, more effective processes and better aligned capabilities in place. This allows HR to deal with the next new change more effectively.

2. Understand HR cost drivers

It is vital to know what drives HR costs. If you know your key performance metrics and what has an effect on them, you can quickly demonstrate that you understand the cost, service and risk implications of any proposed organizational changes on your own department. A good grasp of the cost implications of strategic decisions and the analysis to back it up – really helps when it comes to making changes. By conducting an assessment of the HR department, you get a better understanding of your internal benchmarks. A key metric for HR to understand is the HR “Cost to Serve”of each employee, including staff, systems and third parties. This can vary widely between businesses and geographies and it is important to know why.

3. Take a lead on sourcing options

Take the outsourcing decision to your board – do not let the board take it to you. Be proactive and do the research into how outsourcing could benefit your department (see article Top 5 Benefits of HR Outsourcing)and bring about positive change, as well as cost-savings. Show that you have been actively looking at alternative ways to provide better and more cost-effective HR services in payroll, IT, recruitment, training, HR administration and benefits. Develop your own “build or buy” criteria to help gradually improve HR services. Demonstrate that your business case takes into account the benefits of moving from fixed cost to a more variable cost (that will help in the downturn and the subsequent upturn).

4. Lead by example

There is a balancing act that good HR directors need to master. Often, HR directors are so outwardly focused on supporting the organization that they can neglect the day-to-day workings of their own department. When aligning HR strategy to the wider business strategy, HR directors need to focus on the internal working of the HR department, and most importantly, the people within the HR department. Show leadership through developing your talented team members, and use this as your core team to lead change. Retention strategies start at home, so show the board what you are doing to keep and develop your most talented team members. Be innovative. The organization will look to the HR department to lead on this – secondments, project roles and recognizing excellent service are all initiatives that can inspire people within the organization.

5. Implement change decisively and calmly

All executives in the organization must demonstrate leadership by managing change in a calm and decisive way. HR can stop the organization making “knee-jerk” reactions – more than ever, this is the time to make the right decisions for your organization. Implement changes calmly, effectively and consistently.

This is the second of a two-part discussion on Future Trends in HR Operating Models, click here for Part 1 Future Trends in HR Operating Models (Part 1 with Slides)

(3) HR Outsourcing market will restructure to deliver standardised services

The HR Vendor landscape is evolving all the time (slide 8), we have HR Technology vendors, HR Outsourcing (HRO) providers, single process vendors and HR consultants. HR vendors are also impacted by current economic changes, with cost pressures and streamlining. The market will look very different in two years time with more mergers & acquisitions, see for example Towers Perrin and Watson Wyatt merger.

There have been less huge, multi-year HRO contracts such as Unilever/Accenture or Convergys and Johnson & Johnson. 10-year HRO contracts are more difficult in the current environment. It is difficult enough to predict the needs of your own organisation, yet alone where a supplier will be in 5-10 years time, so HR buyers are more cautious. However, single process outsourcing is booming – RPO, Learning & Development outsourcing or see recent examples of large “Payroll Plus” contracts. The ERP providers are now developing and providing SaaS models – see Wipro and Oracle example and if successful this will indeed ‘blow-up’ the HRO/BPO service model.

The HRO model will change to provide lower cost services to a broader range of organisations. For buyers to benefit from cost savings to achieve their strategic agenda, they will need to accept more standardisation of services. Industry consolidation, technology innovation, economic pressures and a drive to deliver HR strategy will all help to make this happen. Those vendors who provide tools and services that help address organisations key Talent Management issues will thrive.

(4) HR as a corporate function will be leaner, with Employees and Managers doing more

Organisations need to improve productivity in a competitive globalised environment and HR needs to demonstrate ‘value for money’ like every other function. This will encourage ‘leaner’ central HR functions, pushing out more “people management” to managers enabled with much better skills and tools.

Current HR operating models need to change (slide 10). The ‘Ulrich Model’ promoted ‘economies of scale’ and ‘economies of skill’ with the adoption of Business Partners . However, the implementation of the model has had mixed results, including adoption of Business Partner model, questions about whether HR Technology has been a barrier rather than an enabler, and gaps in HR skills required to implement the changes needed.

Business Partners – working within HR or the business with participation in strategic decision-making. This is currently a weak spot in many HR Operating Models, for different reasons including HR Generalists struggling to operate at an Executive level. A key challenge for HR will be to enable Managers to manage their staff more effectively, with less reliance on central HR support. There will be ‘Business Partners’ in future HR Operating Models, but fewer and operating in a different way.

Centres of Expertise – providing policy design and case support, responding to changes in external market or legislation. A big question is can COEs provide best practice at a competitive price?

(5) HR Skills will develop in Change Management, Project Management, Vendor Management and Technology

In allocating more time to delivering HR solutions, HR must review the skills it really requires. Delivering change requires different skills to managing day-to-day operations. Key skills gaps include Vendor Management, Change Management, Project Management and business transformation skills.

Vendor management is an increasingly important specialist skill in HR. (see this useful guide from CIO magazine Vendor Management Guide) With less end-to-end HR Outsourcing deals, and more single process contracts – managing vendors effectively is a fundamental. Building mutually beneficial relationships with effective Account Management, Service Level Agreement management, continuous improvement, negotiating and contracting adds real value.

Project Management – with so much change in mergers, acquisitions, restructuring and technology, HR needs to be in a position to lead large-scale change programmes. HR professionals bring great experience and understanding of the people aspects of change which is so crucial to delivering successful change. Simply put, organisations should be coming to HR when they require project and change management expertise.

And finally, after reflecting on what might be on the horizon, here are some steps to get started (in addition to slide 13) 10 steps before starting your HR Transformation project

This is the second of a two-part blog on Future Trends in HR Operating Models, click here for Part 1 Future Trends in HR Operating Models (Part 1 with Slides)

As they say prediction is very difficult, especially about the future. At the EMRG BPO Conference in London Sheraton Park Lane Hotel on 22nd June, we had a panel discussion on the ‘next generation’ of HR Operating models. My thanks to the other panel experts and audience for providing the stimulating discussions.

(1) Workforce and economic changes will require HR to allocate more resources to delivering HR Strategy

We are living with unprecedented economic change and the long-term implications for industries and economies is unclear. What is clear is that organisations need to be quick to adapt and at the same time improve productivity. A key challenge for HR leaders is providing a Human Resources Strategy aligned with Organisational Goals, however for many organisations these goals are still in a state of flux.

There are also major changes in the workforce (slide 4). For example, since the mid 90s there has been a dramatic decline in the birth rate in the UK – there will be 60,000 fewer people reaching working age each year from 2010 onwards. This might be a good thing with a ‘contracting’ economy however there will be problems during the upturn. Better health, huge pension deficits and no radical changes in taxation will probably mean that we will need to work longer than previous generations. (See report from Bupa, The Oxford Alliance, RAND Europe and The Work Foundation Healthy Work: Challenges and opportunities to 2030)

In a recession, there are still talent management challenges, (slide 7), in attracting and retaining high performers and planning the next generation of leaders with the right skills. HR will need to allocate more resources to delivering the Talent Strategy to ensure organisations flourish in the future.

The diagram on slide 11 shows a ‘typical’ HR function with the majority of work (60-70%) estimated to be transactional or administrative. One key objective for HR Transformation is to allocate a larger proportion of resources to ’strategic HR’. There has been an interesting debate about why HR has struggled to move from the “Pyramid” to the “Diamond”. This is a complex picture, but factors include skill gaps in HR Transformation, HR technology not delivering and simply too much going on with running increasingly complex organisations.

(2) New tools will enable improvements in collaboration, productivity and managing the workforce

We are using a variety of social media and other tools from Twitter to Google to LinkedIn. Different groups use different tools in not so predictable ways, see article about Social Networks around the World.

In HR, according to research by Communications Management, 8 out of 10 HR professionals belong to online communities or social networking sites in their daily work. One in three (32.3%) have already asked for supplier recommendations through this medium. (See 52 ideas on using social media in HR with thanks to Michael Specht.)

Tools such as Success Factors can help actively manage talent in the workforce. The emergence of Software as a Service (SaaS) and its impact on HR, (read Steve Boese’s view on
“Does HR need IT?”) will bring more options and reduce the need for HR to make a massive up-front investment with a painful ERP business case. This will make talent management tools ubiquitous for most employees, rather than just those with more than 20,000 employees.

Although technology will help us collobarate, research, communicate and network, the biggest impact on organisations will be to radically change our expectations about what we need from organisational tools. Not only do we expect tools with fast access at all times, great content and global coverage. As Web 2.0 develops into Web 3.0, there will be a demand for more semantic tools that enable us make more meaningful connections with others and become more productive.

We are still in the early days of the web, it is impossible to predict the technology we will be using in 2020. To add even more value HR must understand these trends and support the workforce to become more productive. The technology we are now using every day outside the organisation is influencing the tools we use at work. HR should move towards becoming ‘technology champions’ as the potential benefits are huge.

See also Future Trends in HR Operating Models (Part 2)