To Become a Business Partner, HR Needs an ‘Extreme Makeover’

Deloitte global talent trends chartHuman resources, as a business unit and as a profession, is failing to meet the expectations of business leaders. Not only is this true in North America, where HR has for years been yearning for the proverbial seat at the table, but it’s every bit as true in the rest of the world.

In blunt terms, Deloitte’s 2015 Human Capital Trends report says, “HR is not keeping up with the pace of change in business. Today, there is a yawning gap between what business leaders want and the capabilities of HR to deliver.”

The report declares the need for an “extreme makeover” for HR to be one of the 10 most important human capital trends this year. It’s not the first time retooling HR has appeared as a priority among the business leaders and HR professionals surveyed (3,300 respondents in this report from 106 countries).

Virtually no progress, though, has been made toward improvement. HR’s rating this year is little changed from the 2013 report, when it was given a “GPA” of 1.3.

“Recent research shows that only 30 percent of business leaders believe that HR has a reputation for sound business decisions; only 28 percent feel that HR is highly efficient; only 22 percent believe that HR is adapting to the changing needs of their workforce; and only 20 percent feel that HR can adequately plan for the company’s future talent needs,” says the report.

Tempering that assessment is the convergence of multiple factors that are already forcing change upon the role of human resources. Deloitte says concerns about workforce performance, leadership, and culture and engagement have permeated C-suites worldwide, elevating human capital to a top of mind issue.

Meanwhile, many of the mundane administrative jobs handled by HR generalists have been eliminated by technology and employee self-service capability. The globalization of talent is shifting power to employees, while big data analytics demands different skills.

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Already underway, says the report, is a redefinition of HR’s role “from ‘service provider’ to an enabler and builder of talent.” Likewise, “HR is shifting from a group of generalists to a team of highly skilled business consultants.”

“Finally,” adds the report, “professional development and research have emerged as key HR capabilities.”

Accelerating this process is the emphasis companies are placing on business savvy. Organizations “are bringing in a fundamentally different kind of executive as CHRO. Research shows that nearly 40 percent of new CHROs now come from the business, not from HR.”

It’s the beginning of an HR transformation, says Deloitte, but only an “extreme makeover” will elevate HR in both value to the enterprise and as a full partner in driving growth.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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6 Comments on “To Become a Business Partner, HR Needs an ‘Extreme Makeover’

  1. “Human resources, as a business unit and as a profession, is failing to meet the expectations of business leaders.”

    If the expectations of business leaders are to have indentured servants bordering on slaves working for subsistence wages and never questioning their competence or the abuse they heap on people’s backs, so be it. In most instances HR is the bearer of bad news, not the source of it. Every HR department I’ve seen has been desperate to improve things in the companies in which they work, their main obstacle was senior management’s refusal to treat people humanely or address basic problems, like hours worked going through the roof and salaries plummeting.

    Deloitte’s ‘report’ starts off with a nonsense claim, saying, “today’s employees [are] more like customers or partners than subordinates.” Nonsense. There’s more information available today for them, but the power position is still held by employers, as evidenced by the fact that they complain with straight faces about ‘talent shortages’ even as wages stagnate and fall and unemployment, using the pre 1994 calculation, is still over 20%. And while an increasing number of people do work on a contingent basis, for the majority of them this is not their choice. Employers don’t want to offer benefits, want to be able to fire people at the drop of a hat, and agencies love it when their billing starts right away, so they have pushed many people who would rather work directly for a company into contingent roles because that’s all that’s available.

    The top three concerns exemplify how ridiculously out of touch many of these reports are. Culture and engagement? Buzzwords with no teeth. Those “softer” areas are a priority because they don’t cost anything to ‘address’ because the CEO can simply say, “Our culture is x,” and walk away with no further commitment, or need to address the gap between what they say their culture is and the reality of what their culture is. If companies really were, “surprised to see the ‘overwhelmed employee’ emerge as a significant problem around the world,” then they are about as out of touch as it’s possible to be without being dead. And as long as people still babble about ‘driving engagement’ without first realizing people are over engaged, this is all just so much rhetoric.

    We need fewer reports detailing what the morons currently in charge are babbling about and more reports with rock solid data on basics. We need information about how many hours people are working vs how many hours they should be working for optimal productivity. We need data on real and nominal salaries vs cost of living. We need data on current HR policies viz a viz off time and remote work and work-life balance vs what people actually need in order to live their lives without burning out. But, that is the data we’ll never see, because not only would it not paint a rosy picture about today’s corporate leadership, it would impose actual costs to fix most of the problems that surface because they are real problems that can’t be addressed with rhetoric and buzz words.

    1. MR, while I believe it would be great if employees are viewed as the customer or partner, and I do believe the relationship has improved significantly in recent years. That said I have to agree that employees are not treated like customers in most parts of any industry.

      On another note, some people need reminding that they should not view the greater world with a pair of Silicon Valley lenses. Might be helpful for these folks to try on a pair of bifocals to be able to see the picture from near and far.

      1. My feeling is you can likely thank Silicon Valley for much of the current trends of long hours and poor pay. The ‘start-up’ culture is strong out there, and when you get a ton of borderline personality types together who don’t mind spending 90 hours a week messing around with circuit boards and code, modeling how you deal with the rest of the world based on that is kind of moronic. Christ, look at how many of those guys treat women in their own industry, is it any wonder they don’t have social or family lives and why the don’t mind spending every waking second working.

  2. Another serial reminder that the world of HR sucks.
    Heard this record played over and over again. This macro picture needs its own makeover. It is too broad a scope and too repetitive year after year.

    This year there are a few refreshing changes are added here and there that generate interesting and sometimes painful monologues on social media.

    I appreciate the idea of simplicity but the idea that employees are seen more now as customers is dragging innovative thinking a wee bit too far.

    It is great that Deloitte cares to try paint a realistic picture for HR professionals far and wide but those reports are becoming as long, thick and heavy as some HR policy manuals I have taken the liberty to scroll through.

    Lets see what 2016 brings. No doubt we will hear a similar melody.

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