Over the last decade or so, HR has striven to re-invent itself, spurred on by a number of key models and benchmarks which, over the same period, have become embedded as the central aspiration of HR functions all over the world.

This undoubtedly increased the effectiveness and value of HR to business and saw the substantial growth of ‘strategic HR’ disciplines such as talent, leadership, engagement, culture and others.

At the same time, under close examination of their cost vs. value equation, most HR functions leaned-up and re-structured. This saw the establishment of the HR Business Partner role, the development of Centres of Excellence, HR Helpdesks, Manager Portals and Shared Service Centres.

However, the recent global financial crisis has without doubt catalysed a sudden shift in what business is looking for from HR and raised needs which challenge both the ‘hardware’ and ‘software’ which HR has spent the last few years setting in stone. There is a risk that some of the structures, skills, processes and tools which have been built could end up being white elephants, left high and dry by a sudden shift in the environment.

Those who do not, or cannot, may well find their businesses considering fundamental decisions about the way in which it meets its HR needs going forwards.

So what are these new operating challenges for HR? Where have they come from and what could they mean? Over the past few years, four challenges seem to have emerged and grown from a distant hum to, over the last year or so, a loud banging at the door. They have been evidenced by, amongst other things, changes in the specification of positions and experience being recruited into HR, in the language of business being used in HR, the kind of questions and discussions taking place at conferences and the demand for service and knowledge provision from third parties.

Challenge 1: an integrated and prioritised organisational offer – beyond HR, to OE

Challenge 2: measurable impact in shorter timescales. HR must balance long term capability with short term
performance

Challenge 3: expansion of what are seen as the ‘vital basics’. Effective provision of these is taken as read

Challenge 4: a more commercial, externalised and pragmatic approach. HR moves from process-driven to
impact-driven

So what can an HR function do to address these challenges? HR capability has to have a more urgent feel to it in 2011, with gaps in HR’s content, structure, process, system and skills offer needing to be addressed. Yet focus on HR capability is becoming a victim of the times.

The recent Henley Business School Corporate Learning survey indicates that HR development has dropped down the priority list, with only 3% of organisations surveyed saying that it would be a first or second priority
in 2011, versus 34% in 2010. It is vital in 2011 that HR keeps its focus on continuing to develop and transform.

HR capability has to have a more urgent feel to it in 2011, with gaps in HR’s content, structure, process, system and skills offer needing to be addressed. Yet focus on HR capability is becoming a victim of the times.

The recent Henley Business School Corporate Learning survey indicates that HR development has dropped down the priority list, with only 3% of organisations surveyed saying that it would be a first or second priority
in 2011, versus 34% in 2010. It is vital in 2011 that HR keeps its focus on continuing to develop and transform.
The following shorter term and longer term activities should be considered.

• Focus on making HR’s existing operational offer work smoothly and seamlessly, with as low an investment of time and cost as possible.

• Re-examine all activity within HR and prioritise business critical activity with the aim of doing fewer more important things, quicker, cheaper and just well enough to make a difference.

• Introduce metrics relating to productivity and effectiveness, which both identify opportunities and track trends and progress, at overall functional and key activity levels. A move from process measures to impact
measures.

• Tidy up people data to support short-term decision making around structure, costs and resourcing.

Examine ways of easily simplifying HR’s interface with the business and display an integrated organisational perspective which is visibly linked to both short term financial performance and longer term strategy delivery.

• Assess the capability of those in key roles requiring hard-to-find skillsets such as true strategic perspective, pragmatism and an ability to balance thinking with doing.

• Consider whether the way in which HR is structured makes sense against these changing needs. Is it too fragmented, with too many internal interfaces and too much ‘glue’? To what degree do roles overlap? Is it
clear who the wider business should talk to? Do people understand their roles?

• How can we create ‘horizontal’ connections between ‘vertical’ people processes such as resourcing, talent, performance, reward, engagement etc which provide simpler, more integrated and aligned solutions at
organisational level?

• How are we developing skills in HR? Are we reinforcing a fragmentation or siloing of skills? Are we low on strategic ability? Can our people operate in more than one dimension? Can people both think and do? What does this mean for HR career pathing and recruitment?

• Do our HR Information Systems need an overhaul to put us on the front foot? Do we know who is working where, on what, how well and at what cost? Do our figures tally with Finance? These are the questions which once likely to be asked of HR in 2011 and beyond. It seems that it is time for HR’s next transformation, building on the good work of the past decade, but recognising that things have moved on and that fundamental questions must now be faced up to.

HR has the opportunity to become the place to work in business;, a fantastic entrée into the realities and complexities of corporations, a breeding ground for developing leadership essentials such as judgement, strategic agility, pragmatism, for understanding how the different elements of a business work together in the delivery of strategy and a testing ground for those already at leadership level. Will it rise to the
challenge?

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