Young HR Minds 2008 to discuss global themes

Dr. Archana Arcot

There is so much buzz about the emerging role of HR - that of a 'strategic partner'. Ideally this should have seen HR Professionals move from the Young HR Minds Award 2008 - Shaping the Strategic Partner Role of HR backroom to the boardroom.

Yet, global statistics show that while 50 per cent of HR Professionals see themselves as "strategic partners" within their organisations, only 17 per cent of HR Professionals are invited to participate in the initial stages of company's mergers and acquisitions (source SHRM Foundation /Towers Perrin study).

The question in context therefore is what does it take for HR practitioners to get to the CEO's strategy table?

The role of strategic partner has virtually become the mantra of HR leaders everywhere; they all want to exemplify it. The problem is, not everyone knows just what "it" is and how one becomes and acts a partner.

Amidst this context a learning platform for the "Young HR Minds" has been created with the view of raising the know-how, skills and competencies of our HR practitioners and nurturing tomorrow's HR leaders.

This article marks the first in a series that would cover the array of contemporary global HR themes being showcased at "Young HR Minds Award 2008".

Strategic partner role

Too often, the term strategic partner is narrowly defined as 'an HR leader working with business leaders to implement strategy' which is the quintessential role of a strategic partner.

Today a more dynamic definition replaces this simple notion. Dave Ulrich, the leading voice and proponent of the multiple roles of "HR", maintains that the strategic role of HR requires that HR strategy is aligned to business strategy; and that partnering with business leaders and line managers in strategy execution is necessary in order to help improve planning, from the conference room to the marketplace. By fulfilling this role, HR professionals increase the capacity of business to execute strategies.

HR is thus propelled to the forefront of business strategy. Much is being asked of HR practitioners today - to know as much, if not more, about the 'business' of the organisation as the business leaders do, ability to speak the language of HR in the context of the business and more importantly influence the business decisions that impact the people of the organisation.

In other words, there is a great need to move beyond traditional HR activities towards adding value through directly improving the performance of the business.

Therefore at the cost of sounding cliche, HR needs to look at itself in a different way than in the past. According to the 2006 Global HR Transformation Study by Mercer Human Resource Consulting, survey findings show that the HR function spends almost three-fourths (70 per cent) of its time on traditional activities, such as record keeping, compliance and delivering HR services.

The study reports that very little shift is actually seen in the overall time spent on transactional versus strategic activities. HR function needs to make more significant changes in the way they are structured to achieve the desired strategic focus.

One example of this is, "how some organisations are considering a bifurcation of the HR function, essentially separating the strategic work of HR from transactional activities and managing them differently."

Akin to this perspective, another emerging perspective to make strategic partnership a reality is to think of HR function as a "business". HR has many elements typical of a business, it has products (HR tools/systems) customers with different needs and exceptions (its people), and competitors (companies they lose key talent to). Edward Lawler III -authority in HR strategy and systems- advocates the concept: "thinking of HR as a business leads immediately to the critical question; what products should it offer?"

He outlines three product-lines of which strategic partner role has the potential to add most value. Fundamentally, these product lines need to include input to business strategy, analysis of strategic readiness and strategy implementation. He believes that establishing strategic capability alone isn't sufficient.

HR needs to influence decisions and one way this can happen is to create an organisation effectiveness practice that reports into the CEO. The precedence to this approach is what happened in marketing and finance. Marketing and finance functions have separated themselves from sales and accounting by their reporting relationships.

They are separate units that play a major role in strategy formulation and development. The transactional work in their areas is done by the accounting function and the sales function.

Adopting a similar pattern would create a world where HR is to organisational effectiveness as accounting is to finance, and sales to marketing.

Just as HR activities; HR skills and competencies have remained somewhat traditional. Organisations and HR professionals who seek to leverage the new strategic partner role of HR must work towards acquiring new expertise, enhancing skills and competencies particularly those that relate to business, finance, strategy and organization capability development.

This is the definitive way for HR to initiate a fundamental shift from the pure "traditional role" and move on to an all encompassing "strategic partner role" also making true business sense.

Dr. Archane Arcot is Vice President - Human Resources at WNS Global Services, Sri Lanka and is a panel member of the "Young HR Minds Award 2008".