Opinion

Proving line of sight from an HR intervention to profitability is not easy

Siân Harrington , 01 May 2012

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HR magazine’s 21st year is an apposite time to look back at how the discipline of HR has been transformed since the 1990s, both as a function and in the eyes of the business.

On the one hand, as the pages of this magazine show each month, the language of HR has become more business-focused. Business-critical issues such as talent and performance management have risen up CEO's priorities during this time and HR has jumped at the chance to prove its worth.

After the financial crisis, we started hearing about HR's role in creating an organisation's moral compass; about HR getting involved in risk strategies. In some companies, HR has now assumed responsibility for other disciplines, such as communications or customer service (one example being Andy Brown, HR director of Hamptons International).

Yet HR suffers from a negative perception in many quarters, not least among line managers, business owners and the media. The view it is all about initiatives and latest fads remains strong.

Despite Dave Ulrich's influential prognosis positioning HR as business partner, some do not trust HR to deliver organisational performance. They question whether HR has transformed enough to be truly fit for purpose.

At last month's Impact 2012 conference, held by consultant Bersin, CEO Josh Bersin said business agility was the number one goal of organisations today. Unfortunately, he said, HR gets in the way. He cited an Economist Intelligence study that found HR to be the 'least agile' function in business - even more so than finance and administration.

To make matters worse, he said, HR teams are not always aware of modern solutions. "CHROs tell us their number one challenge, after partnering with their CEO, is modernising the skills and capabilities of the HR team itself," he said.

In our cover story , we discuss how HR is evolving. The conclusion is, it still has a long way to go, but it has taken that first giant leap. Proving line of sight from an HR intervention to sales and profitability is not easy, but technology is enabling data visibility and HR is increasingly held to account.

For me, though, this is not about transforming HR but about transforming business. Talent, reward, leadership and development approaches need to be quickly adaptable to deliver results in rapidly changing markets.

Focusing on the business outputs of HR interventions is the key to 21st century HR, not the intervention itself.

This is something that all those shortlisted for the HR Excellence Awards 2012 demonstrate. You can see this year's shortlist, judged by our panel. But we are asking you to choose HR director of the Year. Please see our finalists and let us know who you think merits this accolade.

 

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More on language and agility

Jon Ingham, Strategic HCM 01 May 2012

Sorry to repeat a point I've made several times on here, but more business focused language isn't necessarily a good thing, eg http://strategic-hcm.blogspot.co.uk/2012/04/hrd12-helping-people-become-what-they.html Also, readers may be interested in this post on agility from Bersin Impact: http://strategic-hcm.blogspot.co.uk/2012/04/bersinimpact-agile-hr.html

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