HR can be transactional, but take that away and what should HR be doing? This slideshare helps look at why we need to be strategic and what steps to take to do so now.
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Why strategic HR is crucial and how to get started
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2. Why Strategic HR is Crucial Now, and How to Get Started
bamboohr.com efilecabinet.com
Rusty Lindquist
VP of HCM Strategy & IP
BambooHR
@rustylindquist
rusty@bamboohr.com
linkedin.com/in/rustylindquist
Angela Watson
Enterprise Account Executive
eFileCabinet
awatson@efilecabinet.com
linkedin.com/in/angela-watson-5354903a
3. Why Strategic HR is Crucial Now, and How to Get Started
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It’s time to blow up HR and build something new
Rethinking HR
Why we love to hate HR
What will it take to fix HR
It’s time to split HR
HR faces a crisis of credibility in the boardroom
HR is our “favorite corporate punching bag”
HR is Under Attack
4. Why Strategic HR is Crucial Now, and How to Get Started
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"HR today sits smack-dab in the middle of
the most compelling competitive battleground
in business, where companies deploy and
fight over that most valuable of resources—
workforce talent."
-Matthew D. Breitfelder
HBR: “Why did we ever go into HR”
5. Why Strategic HR is Crucial Now, and How to Get Started
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Understand HR’s True Worth
as a strategic investment
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Millennials will comprise 75% of
the global workforce by 2025.
- Deloitte
Millennials
91% of Millennials expect to stay with
your company fewer than three years.
– Future Workplace
v75%
v91%
Average tenure for Millennials is 2
years (5 years for Gen X and Gen Y)
– Payscale
v2yrs
Understand HR’s True Worth
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43%
1yr
90-
200%
Within the next 10 years, 43% of the US
workforce will be eligible for retirement
- Forbes
Baby Boomers
Among the jobs that 39-44 year olds
began, one third ended in less than a year
– Forbes
Cost of replacing an employee is
between 90-200% of their annual salary.
– SHRM
Understand HR’s True Worth
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83%
23m
52%
83% Of executives say they’re
increasing contingent workers.
- Oxford Economics
Contingent Workers
There’s projected to be 23 million contingent
workers by 2017 (up 26% in 2 years)
– MBO Partners
52% of Millennials expect to work
independently (82% in emerging markets).
– Deloitte
Understand HR’s True Worth
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• Workforce competency and skills gap
• Increased competition
• Globalization
• Culture
• Competition for talent
• Stresses on work-life balance
• Etc.
Additional Dynamics
Understand HR’s True Worth
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HR spends less than 15% of its time as a strategic
business partner, and spends most of its time
dealing with the implementation and administration
of HR policies and practices.
But when HR is involved, organizations function
better, and are much more successful.
–Forbes, Edward E. Lawler III
“HR Should Own Organizational Effectiveness”
Understand HR’s True Worth
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Nearly one half of respondents rated
their HR department as
‘not ready’ to reskill itself to meet
today’s business needs.
and
Only 8% of HR leaders have
confidence in their HR teams
skills and abilities to
meet business demands.
Understand HR’s True Worth
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Challenges You Face
• Unmanaged Silos of Data
• Sharing & Storing Sensitive Documents
• Inefficient & Manual Document Access
• Managing Audits, Retention, Due Dates
• Meeting Compliance & Policy Requirements
Organize the Informational
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Document Chaos
Store Search Share
Time/Resources
Risks/Liabilities
Inefficiency/Confusion
• Track Changes
• Share Access
• Permissions
• Acct #
• $$$
• SSN#
Organize the Informational
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$120 billion annually
spent on printed forms
Of businesses fail if they
suffer catastrophic loss
30-40% of time
spent looking for files
Documents lost
every 12 seconds
Each lost document
costs $350 to $700
What Is The Impact?
Organize the Informational
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“What we expect to see is document management will be just like
e-mail, where it’s going to be an essential capability that your
knowledge workers are going to require.”
-Gartner Research
What Is The Impact?
Organize the Informational
36. Why Strategic HR is Crucial Now, and How to Get Started
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Automate the Operational
set yourself free to do great work
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59% of firms with less than 1,000
employees plan to invest in human
resources technology this year.
- TSCIU and HR Executive Magazine
Investing In HR Tech
v59%
Automate the Operational
43. Why Strategic HR is Crucial Now, and How to Get Started
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Measure & Report
it’s internal marketing
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44. Why Strategic HR is Crucial Now, and How to Get Started
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Solve Meaningful Problems
think of HR like an internal business unit
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45. Why Strategic HR is Crucial Now, and How to Get Started
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Who are our key partners?
Who are our key suppliers?
Which key resources are we
acquiring from partners?
Which key activities do
partners perform?
What key activities do our
value propositions require?
Our distribution channels?
Customer relationships?
Revenue Streams?
What value do we deliver to
the customer?
Which one of our customer’s
problems are we helping to
solve?
What bundles of products and
services are we offering to
each Customer Segment?
Which customer needs are we
satisfying?
What type of relationship
does each of our Customer
Segments expect us to
establish /maintain with them?
Which ones have we
established?
How are they integrated with
the rest of our business
model?
For whom are we creating
value?
Who are our most important
customers?
Through which Channels do
our Customer Segments want
to be reached?
How are we reaching them
now?
How are our Channels
integrated, and which ones
work best, or are most cost-
efficient?
How are we integrating them
with customer routines?
What Key Resources do
our Value Propositions
require?
Our Distribution Channels?
Customer Relationships?
Revenue Streams?
What are the most important costs
inherent in our business model?
Which Key Resources are most
expensive?
Which Key Activities are most
expensive?
For what value are our customers really willing to pay?
For what do they currently pay?
How are they currently paying? (How would they prefer to pay?)
How do we report on this “revenue” to the rest of the
organization?
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Understand your true worth
as a strategic necessity
Eliminate the unnecessary
shed all the dead weight
Organize your information
to lay a foundation for insight
Automate the operational
set yourself free to do great work
Maximize business value
align activities to strategic outcomes
Solve meaningful problems
learn to think, act, and win like a business.
Measure and report
the value and impact of your work
ESCAPE ELEVATE
Solve Meaningful Problems
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50. Why Strategic HR is Crucial Now, and How to Get Started
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RustyLindquist
VPofHCMStrategy&IP
BambooHR
@rustylindquist
rusty@bamboohr.com
linkedin.com/in/rustylindquist
AngelaWatson
EnterpriseAccountExecutive
eFileCabinet
awatson@efilecabinet.com
linkedin.com/in/angela-watson-5354903a
Questions?
Notas del editor
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What we increasingly see, when you look at HR activities across company size, is something like this. If we were to plot HR activities, by company size, is that the smaller a company is, the more operational their activities are, and that they don’t start becoming more strategic until much later in their growth.
And this makes sense, of course, in that the first problems you encounter is the need to do payroll, and then track time and attendance, and then maybe benefits, and a slew of other very transactional activities. But as the company grows, the need to behave more strategically forces them to adapt and move up into the higher-business value activities.
Well, along with this evolution, we see the transformation of the perception of HR, where on the bottom left, when a company is small, HR is viewed as a cost center. But the more evolved HR departments, High-Impact HR really starts to be seen as a strategic investment.
eFileCabinet
Well what we’re seeing today, given the increasingly competitive market we live in, and the war for talent, and given the changing nature of the workplace and the workforce, is that our companies are starting to demand that HR makes this evolutionary transition much more quickly. They’re really expecting (and requiring) a radical transformation over a relatively short period of time.
And this is a period of maximum occupational disruption, where the accidental HR rep, who so frequently is in charge of HR at the smallest organizations, suddenly finds themselves having to learn entire new sets of skills. This is often what fuels the hiring of someone in HR who has a lot more experience.
But the important thing to note here, is that there’s some latency here that is the cause of the recent issues of HR in the media. The market (our companies) are demanding for HR to be come much more strategic, and we’re too often stuck in the transactional.
BambooHR
Changes both in the workplace and in the workforce.
Now we have to question everything we thought we knew, all our old approaches
That implies we have adjust the way we think about staffing and sourcing
Millennials:
91 percent plan to stay at your company for fewer than 3 years. http://www.forbes.com/sites/jeannemeister/2012/08/14/job-hopping-is-the-new-normal-for-millennials-three-ways-to-prevent-a-human-resource-nightmare/
89% of Millennials would prefer to choose when and where they work rather than being placed in a 9-to-5 position. https://www.upwork.com/press/
45% of Millennials will choose workplace flexibility over pay. http://www.forbes.com/sites/katetaylor/2013/08/23/why-millennials-are-ending-the-9-to-5/
Average tenure for Millennials is 2 years (compared to 5 years for Gen X and 7 years for Baby Boomers.) http://www.prweb.com/releases/2012/8/prweb9817689.htm
It costs an average of $24,000 to replace each Millennial employee. http://microsoft.message.ch/s2bSilverlight/silverlight/PDFs/cost_of_turnover.pdf
Contingent workers:
83% of executives say they're currently increasing the amount of contingent workers in their companies. http://www.forbes.com/sites/sap/2014/12/19/the-rise-of-the-contingent-worker/
There are projected to be 23 million contingent workers by 2017 (a 26 percent increase since 2013). http://www.cbsnews.com/news/temp-work-raises-long-term-questions-for-economy/
Remote workers:
34 percent of companies said more than half of their full-time workforce will work remotely by 2020, and 25 percent said more than three-quarters would not work in a traditional office by 2020. http://www.fastcompany.com/3034286/the-future-of-work/will-half-of-people-be-working-remotely-by-2020
Telework grew by 73% in the last 6 years. http://www.thefranchiseking.com/working-from-home-franchise-businesses
Lack of knowledge workers
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So there’s a huge opportunity here for HR. Alfred Marshall, who is known as the grandfather of modern day economics taught that organizational power goes to the group that deals with the biggest problems.
And increasingly, because of all these dynamics, the problems HR should be solving are indeed, some of the biggest problems our organizations face. Which means, of course, that we have a chance here… a chance to step up and play a whole new game, to step into a whole new level of influence in our organizations, a chance to really have a seat at the table and impact our organizations (and the world) in incredibly positive ways.
The chance to step up is there. The demand that we step up is there. But are we?
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Unfortunately too often we’re not. According to a recent Forbes article, we find that HR spends less than 15% of its time as a strategic business partner, and spends most of its time dealing with the implementation and administration of HR policies and practices.
But they found that when [HR] is involved, organizations function better and are much more successful in implementing strategic change.” (Forbes http://onforb.es/1fe43xe)
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Bersin’s research showed that nearly one half of respondents rated their HR department as “not ready” to reskill itself to meet today’s business needs, and only 8% of HR leaders have confidence in their HR teams skills and abilities to meet business demands.
eFileCabinet
Research done by BambooHR showed that within the small to medium-sized segment, when asked what three things occupy the majority of their time, 71% said that just managing employees (answering questions, resolving issues, recognition, and discipline).
Most of them are expected to be walking encyclopedias of time-off policies, or vacation balances, or every other piece of information people may need about their jobs.
You get the picture
eFileCabinet
Because of this, Gartner Research has shown that the two largest addressable market gaps are “strategic HR skills transformation” and HCM technology to support HR strategy.
There’s much room to grow.
eFileCabinet
We have to get ourselves to get out of the basic operations layer of HR, and out of the General Operations layer of HR, so that we can get into the strategic operations layer in HR, which is where we start to really allocate substantial amount of thought, time, and resources into things like culture, performance, engagement, satisfaction, employment brand, advising, talent management, succession planning, learning and development, etc.
These are the bigger problems HR was meant to solve. These are the bigger problems are organizations are waiting (even clamoring) for us to solve. And these are the problems that if we don’t start solving, they’ll likely go somewhere else for solutions. It’s time for us to step up.
But how?
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Step #3 for escaping the operational is all about organizing our information, which really allows us to lay a foundation for insight that is critical to our being able to step into this more strategic function. It’s a critical component of this path of evolution we are on.
eFileCabinet
But disorder is the enemy of evolution, in several critical ways.
First, and foremost, it creates significant cognitive overhead. When so much of our time is spent trying to remember where data is, or finding that data, or trying to keep track of the complexity, that’s all time and cognitive energy that is not free to solve the bigger problems. And while this may sound obvious, the impact of cognitive overhead on performance and productivity is extensive.
It also creates latency to insight. If our information is not where we need it when we need it and immediately and easily accessible, than it creates a delay to generating insight, so much so that often we don’t truly ever get to insight at all, because the barrier to produce it is so high. Or if we do, it takes way too much time.
And that becomes a productivity drag. When we have to record information multiple times, in multiple locations it becomes a very real, very pervasive drag on our ability to move quickly and smoothly. And this is only the impact of disorder on productivity, saying nothing about risk, which is very true too.
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In the U.S., companies spend more than $120 billion a year on printed forms, most of which outdate themselves within three months’ time.
A typical employee spends 30-40% of his time looking for information locked in email and filing cabinets – filing costs average about $20 per month.
Each misfiled document costs $125. Each lost document cost $350 to $700 – large organizations lose a document every 12 seconds.
More than 70% of today’s businesses would fail within three weeks if they suffered a catastrophic loss of paper-based records due to fire or flood.
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So the idea of creating order is to increase our signal to noise ratio. We have lots of noise that we deal with. So much noise that it’s really hard to find signal in there. But that’s our jobs. Our organizations are relying on us to be able to find signal, to find insights and be strategic so that we can have a forward moving impact. But this type of clarity only comes through organization.
eFileCabinet
So the idea is that we have to organize, to optimize. And these are the three primary things we should be thinking about as we work to create order to our records and information….
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This was actually studied by Bersin, who released a report just a month or so ago where he boldly states, “simplicity trumps functionality”.
He then goes on to demonstrate how we get more value from a system faster, when that system is simple to use. EVEN WHEN IT DOESN’T DO EVERYTHING ELSE. Because systems that are highly functional are difficult to learn. that increases friction into the learning process, slowing the whole organization down, and sometimes preventing content from getting learned, or even created, at all.
eFileCabinet
Now that we’ve talked about how to escape the operational in order to set ourselves free to be more strategic, let’s talk about what we can do to actually BE strategic.
And that starts by focusing on increasing the business value of your current HR activities.
eFileCabinet
(Here I simply talk about how you can reinvent, or modify your current activities and initiatives in such a way that they drive strategic outcomes. So I introduce HR’s main strategic outcomes, and talk about how if your activities aren’t driving one of these, at least in some small way, then you need to think about whether those activities aren’t ones you should either cut out, or perhaps work to reinvent. It would be awesome to have some anecdotes here of how you’ve done that.
One of the ways we’ve done that, for instance is in onboarding. Onboarding can be seen as a very operational activity… do the paperwork, give them their computer, sit them at their desk, introduce their manager, etc. But it can be very strategic. Very. A simple change we’ve made to the way we onboard is that in the preboarding, we send them a questionaire asking where they like to vacation, or what their favorite activities are, etc. Then when they start, an email goes out to the whole company with the new employee’s photo, and the answers to the questions, which allows people in the organization to see them, know their name and their face, and even if only one or two random people stop, say hi, call them by name, and welcome them, that’s huge for a new employees sense of belonging and social integration. But we don’t stop there. We proactively power the establishment of those personal connections. If we see they’re into mountain biking, then we go introduce them to people in the company who are also mountain bikers. Helping create a sense of belonging, helping them feel like they’re not alone, and facilitating personal connections. Because it’s been well demonstrated that the more personal connections someone has at work the higher their levels of employee satisfaction, the more engaged and productive they are, and the longer they’ll stay. It even impacts time to productivity.)
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