Earlier this week, HR Executive Online featured an article entitled “Going World-Class (for Less)”.
The article by Jill Cueni-Cohen directly relates to large, global organizations, but I must say that in my experience working with small and mid-size organizations for over 10 years, we see the same characteristics among “world-class” small and mid-size companies.
What is a “world-class HR organization”?
The Hackett Group defines “world-class” as one that achieves top-quartile performance in both efficiency and effectiveness across an array of weighted metrics in The Hackett Group’s comprehensive HR benchmark.
The Hackett Group’s World-Class HR Performance Advantage Research has found four characteristics that set “world-class organizations” apart from typical HR organizations. These are:
- operational excellence
- strategic talent-management capabilities
- close alignment to business needs
- ability to deliver analytic-driven insights that drive performance
Effective HR departments are agile, flexible, and have the ability and openness to think differently. Using a portfolio approach, they look at a variety of tools, technology, processes, information, outsourcing and other data to continuously improve operations.
World class organizations define a job based on the work activity and desired outcome, not on resources that happen to be available at the time. For example, after a reduction in workforce and resources are cut at the bottom, the work doesn’t necessarily go away. Unfortunately, many organizations end up “passing the work up” using more expensive resources to get the necessary transactional work done. A more effective way to approach it is to review the work (is it still necessary), align it (which business unit makes sense to handle it), automate it, or limit it.
Managing change, ongoing process improvement
When change is necessary, world-class HR departments don’t just sit and hope something happens. They know that CHANGE (especially improvements) will not necessarily happen naturally. Effective HR departments exercise the discipline of organizing CHANGE activities to ensure change happens. And when improved processes align perfectly with business needs, then the benefits are experienced more quickly throughout the organization.
With an increasing amount of work being performed by non-employees (e.g. contractors, outsourced services), HR’s role needs to expand beyond that of taking care of employees. The old school approach is to get things done by assigning the task to an employee. The new approach is to be aware that talent and work can float in and out of the organization. HR should NOT be a “steward of employment”. Instead, HR should be a “steward of how work gets done”, as Ravin Jesuthasan cites in his book “Lead the Work: Navigating a World Beyond Employment”.
For example, if there is a “difficult-to-fill” position, perhaps the solution is to break the job apart and find new ways of getting those activities done. The work might be done by an employee or by a free agent, consultant, or outsourced to a third party — or a combination! By comparing cost, capability and risk, an organization can find the right solution.
What’s key in any organization (large or small) is to have a process-improvement mindset. By focusing on the organization’s goals and business objectives, HR departments can be smarter about how they do things. Now that’s going world-class (for less).