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02 March 2009 8:19am


HR must make the shift from transactional to transformational – driving change within a business instead of just aligning with it – if it wants “a seat at the table”, says the head of global HR consulting at Kelly Services.

Presenting a webinar last week on the challenges facing HR during the current downturn, Lance J Richards urged HR practitioners to embrace some “absolute imperatives” that will help them position their companies for success – now and when the market turns back up.

Even in a time of large-scale job cuts and “disappearing companies”, he says, “the issue of human resources and the issue of talent management is still with us, very much… So for the first time since HR came into existence in the 1940s, we are top of mind”.

All part of a cycle

Richards says the first imperative for HR is to remember that the current market is “just part of a cycle”.

“Economies run in cycles – that has not changed. We have to remember there is a longer-term view. Yes, we have some issues here today, but on a long-term view we still have the issues coming ahead of us.”

The war for talent, he says “has already ended. Talent has won. We are all on the back foot and we will continue to be.”

HR can’t affect the “flatlining” birth rates that are the underlying cause of the global talent shortage, but it has an obligation to understand that the “oops point” – when “the economy is back, business is growing, but the availability of talent is going to drop” – is coming. “We have to understand longer term exactly what this is going to do to us.”

Migrate from transactional to transformational

“We’ve got to look at what we do within our businesses. We have to continue making the migration from HR being transactional to being transformational.”

HR has been focused on trying to be aligned with the business, he says, but “alignment is no longer sufficient. We have an obligation to be not just aligned but interwoven – truly a part of the business”.

“This requires us to look at HR as a completely new platform.”

HR often complains that it doesn’t have “a seat at the table”, he says, but “asking for a seat at the table isn’t going to work. We have got to be involved in designing the table, building the table, and only when we’ve done that will we be welcome at this brand new table and accepted there”.

HR practitioners must understand business and business strategy – what drives the business – as well as they know HR, he says. But for most practitioners, “all we know is HR”.

Ride the dragon

“Change is like a dragon. You can ignore it, which is futile; you can fight it, but you will lose; or you can ride it.”

HR has an obligation “to understand what that means and come in and ‘ride the dragon'”.

For example, he says, HR must understand the changes that Millennials – or Generation Y – are bringing into the workforce.

“They are bringing into the workplace a significant shift. They’re not focused on being with your company for ever and ever, and not necessarily interested in climbing the corporate ladder. These folks are very focused on what they consider to be an engaging workplace. Their demands are not about wanting to be CEO… they are focused on their life. And the challenge we’ve got here… is to provide them with work/life balance. They enter our workforce expecting it.”

Too many companies are still focused on maintaining a nine-to-five culture, “and that becomes a problem with Millennials as they’re coming in. They are not going to tolerate those kind of requirements”.

As well, he says, HR must embrace the “amazing things going on [with technology]”. It has an obligation to “have and build enablers that allow employees to get work done more efficiently”. iPods, for example, can be used for training, and Skype for video calls.

“If we allow workplaces to fall behind, then the talent we need are going to find somewhere else to go.”

Remember Darwin

Darwin’s theory of survival of the fittest – “those that fail to adapt, fail” – applies to HR, Richards says.

“Being good at HR is absolutely necessary, but no longer sufficient.”

Research shows that CEOs believe HR lacks business acumen, and line managers think HR lacks the capacity to develop talent strategies aligned with business objectives, he says. Management also believes that HR isn’t held accountable for the failure of talent initiatives. “That’s a problem. That is a frightening indictment when line managers are telling us these things.”

HR must move away from traditional measures of success – such as cost per hire, mean time to fill etc – and focus on “world class quality”.

“I rarely get clients tell me that their number one concern is ‘how cheap can I do something’ or ‘how fast can I do something’. What our clients are telling us today is they’re essentially focused on quality. They will put up with higher costs, they will understand longer time periods to deliver results, but they will not sacrifice for quality because that is what makes the difference now. And that’s the piece that a lot of HR professionals have not gotten their arms around.”

Take care of employees, including the ones who are leaving

Although employers might currently be releasing employees, says Richards, they must remember that “we’re coming rapidly to the ‘oops point’. The economy will turn up, we know that’s going to happen, and we need to keep that forefront of our minds. We will need our employees – we will need them badly.”

He urges HR to remember “who your former employee may be”, because they might be a vendor to the company; a customer; a competitor; a blogger; an ambassador; or a critic.

The person you’re trying to hire tomorrow, he says, might ask them what they thought about working for you. “What is the answer going to be when your former employee gets that phone call?”


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