Before we look at who is to blame and why, we first need to look at the underlying reasons senior management teams are getting frustrated with their HR/L&D teams.
These are the challenges facing the C-Suite:
- 70% of Australian workers are either ambivalent or completely disengaged in their jobs - Gallup, 2013
47% of Australian managers believe their employee turnover is too high - AHRI Pulse Survey, 2015
44% of new hires are considered “not good” when using traditional recruitment processes - Hudson, 2011
43% of Australian employees are “detractors” of their own employer (would not recommend to their friends and family to work where they work) - Engaged Marketing, 2015
21% of Australian employees are considered incompetent, as judged by their own colleagues - The Future Foundation, 2014
This is what business owners and CEOs want from HR:
Solve business problems, not HR problems
Match talent resources with company strategy
Focus on increasing employee engagement
Want HR to use hard numbers, tangible measurements and predictive analytics
Provide operational managers with the skills, tools and processes to maximise their leadership and people management capabilities (want HR to support managers not hinder them)
As articulated by Judy Enns, PhD, Global Business News:
“However, some employees still believe that HR is the place to get free therapy, happiness, corporate welfare, and atta-boys. CEOs, on the other hand, expect HR professionals to build organization systems and processes to make the company competitive. They want a balanced report card on how the organization attends to employee satisfaction and retention, as well as what HR is doing to enhance profitability.”
“The CEO, by contrast, requires an advisor who tells him/her what the key people issues are, and who rigorously influences him/ her about solutions. Sometimes this uncommon role means unfamiliar accountability and risk. The CEO, however, needs HR to add value to every function in the company, rather than merely define itself by reducing head count.”
This is what HR teams are doing:
Focusing on HR problems
Avoiding risk and therefore not piloting new technology
Blocking operational managers’ HR requests if they don’t align with traditional HR thinking
Not allowing HR strategy to be enhanced by people analytics
Not measuring people capital outcomes and therefore the HR budget invariably is the first to get cut
What does all of the above tell us?
That there is a massive opportunity for most organisations to improve their people capital, which will improve employee engagement and productivity levels, which will improve revenue, profitability and customer service levels.
But who is to blame for HR and management teams being laggards when it comes to maximising their human capital?
In most cases the blame squarely rests on the shoulders of business owners, CEOs and CFOs because they are the ones that fuel the fear that HR professionals have regarding risk and accountability. Too often do we hear of CEOs that publically proclaim that they want and support innovation, and yet when an executive makes a mistake they are the first to criticise the executive. You cannot have a culture of innovation unless you are willing to accept that mistakes will happen and that these mistakes should be learnt from and even celebrated. Without mistakes there is no innovation, without innovation an organisation cannot maximise potential.
Maybe it is time for CEOs that truly want an innovative culture to establish an “Innovation Fund”. We have recently created such a fund in one of the organisations I am a non-executive director of, and the response from employees and management has been phenomenal (if you would like to investigate this idea further give me a call as I am more than happy to share my views and experience).
HR professionals need to start experimenting with new people capital technologies and actively ask themselves “Is there a better way?” if they truly want to improve their people capital. A recent study by PwC (Trends in People Analytics 2015) found that:
“86% of CEOs say that creating/improving people analytics
is a strategic priority for the next three years”
This is a clear message to all HR professionals that they should be engaging with CEOs regarding the importance of innovation and then actively pilot new technologies, particularly in the people analytics space.
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