busin ess partnerin g
Getting down to business The transformation of HR professionals from their traditional roles to strategic business partners has been slow, says Clare Parkes. She examines the issue of HR business partnering and explains how to put HR at the centre of business strategy.
R
eal value is yet to be derived from the way HR operates in New Zealand. While there are, of course, pockets of excellence, I believe the profession has yet to earn its stripes overall. In many organisations, and in the minds of many leaders, HR is still regarded as an administrative or processcentric function. But HR has evolved to much more than this and its pleasing to see some organisations are experiencing the benefits of a more businesscentric approach. For most, however, before they can expect to be welcomed with open arms at the senior table, they need to prove their success as a true partner to the business and demonstrate their ability to understand the complexities of business drivers and decisions. While the concept of HR business partnering was conceived well over a decade ago, the transformation of HR professionals from their traditional roles to strategic business partners has been a little slow—particularly in New Zealand. Research suggests that the skills of a traditional HR professional and those of a business partner are quite different and therefore some may not make the transition easily. Many HR practitioners are not building the credibility needed to accelerate their professional transformation and deliver a more outcome-focused, strategic role. What is the consequence? There is still a common perception among HR professionals and others alike that it is difficult to measure the impact of activities undertaken by the HR function. Often, such activities are seen as ‘soft’ or unimportant when considered against operational and financial goals in the development of a business wide strategy; thus HR is left out of important discussions.
What businesses need and want from HR today There are signs that some organisations are expecting more from their HR resources, particularly in response to increased media coverage of issues such as the leadership of talent pools, the challenge to secure the right mix of skills and capabilities, and overall business success stemming from strong leadership capability to name a few.
When it is done well, HR can contribute to strategy, enable the execution of business plans, and deliver tangible commercial benefits. This does not happen overnight and a journey of change is needed—not least of which is that business leaders must buy into a new way of operating. The goal is to appoint strategic HR partners who will become engaged with and accountable to the business, yet also able to support the agenda driven by HR specialists to drive change and raise capability in the organisation. Strategic partners shape both what the business does and how they do it; they exist to ensure the business achieves its goals. Organisations need HR people who know business can influence culture and make positive change happen within an organisation. And they need HR functions that can ensure skilled, motivated, flexible and committed employees are retained and developed.
Structuring the HR function for business partnering The HR business partnering model outlined by David Ulrich, professor of business admininstration at the University of Michigan, suggests three core functions are at the heart of the HR functional structure: 1. Shared services. This is a single unit that handles all the routine ‘transactional’ services across the business in relation to common people management related issues. Shared services typically provide resourcing, payroll, absence monitoring, and advice on the simpler employee relations issues. The remit of shared services is to provide low-cost, effective HR advisory and administration support to the business. An overseas trend has seen organisations outsourcing this function to a third party provider as a more cost-effective way of managing it. 2. Centres of excellence. These are usually individuals or small teams of HR experts with specialist knowledge of HR solutions. Their purpose is to deliver competitive business advantage through HR innovations in areas such as reward, learning, engagement and talent management. Given the size and nature of business in
Become a strategic partner in your business Clarian HR together with Acumen and AUT University centre for innovative leadership present an HR Business Partnering programme for the HR Professional. Contact Andy McCormack on 09 414 3843 or email: andy@clarian.co.nz for further details about this programme and how you can begin to master the business knowledge you need to be seen as a strategic leader in your organisation. To find out more visit www.clarian.co.nz and click Development & Performance.
38 employment today
september/october 2010