Work: Disrupted... What Should HR Do?

The Seven Practices of High-Impact HR.

Published on Published onOctober 6, 2017

Josh Bersin

The world of work has been disrupted in ways I've never seen. We're working many more
hours (we've lost an entire week of vacation time since 2000), employees feel overwhelmed
(40% of US workers believe their work is "highly stressful"), and more and more people are
taking on gig-work and alternative work arrangements continue. And everywhere we go we
find software, robots, and AI changing jobs, forcing us all to reinvent ourselves. (Read the
article "Catch the Wave, 21st Century Careers" for more on this.)

What is HR's new role in all this change and how can HR add the most value? Our latest
research, "High-Impact HR", helps explain what HR should be doing about all this.

What Is Happening to HR?

First let me be clear: HR departments are scrambling to keep up. In many ways HR is a "no-
win" profession: when things go well management takes the credit, and when things go poorly,
HR is often blamed.

Consider all the things Human Resources is expected to do: find and hire talented people
quickly, onboard and train employees to rapidly become productive, develop managers to
become good coaches, drive programs to improve diversity and fairness, make sure pay is fair
and competitive, arrange great benefits and perks, and build a work environment that is
rewarding, enjoyable, and inspiring. And all the while HR has to maintain good records, make
sure global payroll works flawlessly, and comply with legal and compliance regulations in
provinces, counties, and countries around the world.

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 This is not an easy job.

As I talk with HR teams around the world, it occurrs to me that fundamentally HR

professionals have two essential jobs: the "hard things" and the "soft things."

The Hard Things are the "transactional" issues at work: getting people screened and hired,
posting job descriptions, building a career portal, running the payroll, making sure compliance
training is done, getting people to do appraisals, and correctly handling employee grievances,
safety issues, and terminations. These processes, including things like benefits administration,
onboarding, alumni management, and employee communications, are very complicated and
transactional, and people get very upset if they aren't done well. HR cannot ignore them and
we must make sure they're done correctly every single time.

The Soft Things are the "people centric" challenges at work: making sure performance
management is done in a positive way, training new managers to be effective, building a
leadership and executive pipeline, assessing culture and engagement, understanding turnover
and productivity, and diagnosing complex issues like theft, harassment, lack of diversity,
collaboration, innovation, and employment brand. These "soft issues" are becoming more
important every day, and while they are the areas where HR can be the most creative and
consultative, they often have to be squeezed into available time and budget, while the "hard
stuff" gets done first.

HR Teams Still Spend Too Much Time on Transactional Work

Whether we like it or not, HR teams spend a lot of time on transactional work. Our new
research shows that 41% of HR professionals' time is spent on "transactional activities," 40%
on "talent and people," and 19% on "workplace and work." HR teams are trying hard to fix
this: respondents told us they plan to reduce the transactional work (moving from 41% to 30%
over the next 3 years) in an effort to focus on people, culture, and the workplace.

As you look at the maturity model below you'll see a clear trend: the more time you spend on
non-transactional work, the more impact HR will have. Level 4 companies spend only 29% of
their overall time on transactional work, while level 1 companies are spending 58%! So if you

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 find yourself spending most of your day running reports and dealing with payroll, you're not
automating HR sufficiently.

Today The Soft Things Matter More

Most of my research shows that today the Soft Things matter more than ever. Research by
the Bureau of Labor Statistics shows that almost 90% of US stock market value is now driven
by intellectual property, services, and brand. These are all "people-driven" issues, implying
that regardless of the business you are in, "people are your product."

Added to this simple fact is the real issue that employee productivity has become a problem.
This industrial revolution (the "digital era" we live in today), is actually the least productive
revolution we have seen (the invention of the steam engine, electricity, and the original
computer drove more output per hour of work). So the pressure is on: how do we help people
get more done at work?

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 We Did the Research: What Effective HR Looks LIke

After nearly two years surveying more than 1,000 organizations, studying nearly 100 talent
and HR practices, and correlating lots of data about how companies run HR against
profitability, revenue growth, and other financial metrics, we figured out what leading
companies do. Truly effective HR organizations are taking on a whole new identity. They
are focusing on simplification, design, culture, and productivity. Yes they are still doing the
"hard things" well, but more and more of their time has spent automating and simplifying these
"must do" activities so they can focus on design, culture, coaching, leadership, and values.

This is a transformation we call "High-Impact HR," and it represents a manifesto for the HR
department. But it doesn't only apply to HR. High-Impact HR gives us insights into being a
better manager, running IT and other business functions effectively, and focusing your entire
business. We found seven key practices that differentiate these high performing companies.

The Seven Key Findings

1. Design employee experiences, by segmenting and understanding the work lives of

your people. A large technology company, for example, developed 12 "personas" for
the major roles in the company. Working directly with IT, the company studied the
working day, tools, interactions, and systems these people experience at work, and built
a series of specific HR-driven tools to help them set goals, improve skills, collaborate,

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 and feel more engaged. This process enabled the company to take its existing HCM
system and compliment it with strategic new tools designed for these employees.
2. Use HR technology to help improve people's productivity and performance at
work. One of our clients studied the performance of their sales and consulting teams
and found a need to simplify the process of finding experts who understood particular
products in detail. The HR department took some of their off-the-shelf tools and built
an AI-based "intelligent expert finder" that lets these employees find the experts they
need. As the program became successful, they then added new reward systems and
story-telling to help engage and inspire these experts. They are now using
Organizational Network Analysis to further refine and improve this work-improvement
solution.
3. Lead the company's digital transformation, don't wait for others to ask for help. A
large software company went through a multi-year transformation to move its business
from licensed to cloud-based delivery models. In doing this the company had to change
roles, build new service centers, and of course change the way the company develops
and sells software. The leader of this transformation initiative then took a role to "lead
the redesign of HR" - so he reorganized the global HR function to be more integrated,
collaborative, and embedded in this new structure. At a large re-insurance company the
CHRO took it upon herself to work with executive leadership to redefine the company's
organization structure, reward systems, and incentives to create more innovation and
growth. The result was a dramatic improvement in business performance and
innovation.
4. Understand and support agile and team-centric organizational models. One of our
clients redefined its "talent management team" as a team focused on "global team
effectiveness." This team did a study to find what people were working on and found
20,000 "teams" in the company that were not represented in the organization chart. Now,
two years later, the company has developed a new team-oriented toolset for goal
management, performance management, coaching, check-ins, and development - and is
continuing to study how to optimize the network, independent of the corporate
hierarchy.

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 5. Work with leadership to shape a culture of trust, inclusion, purpose, and
accountability. A large retailer, which competes heavily with small niche grocers as
well as global conglomerates, created one of the most engaged and customer-centric
workplaces in its industry by focusing entirely on its employee and customer-centered
culture. The company prides itself on transparency, provides career and college degree
programs for people from the early days of their career, offers regular job rotation, and
encourages people to avoid using computers at meetings (to promote a face to face
culture). This focus on culture has helped make this company one of the leaders in its
industry and a continuous winner of "best place to work" awards.
6. Design the HR function to operate as a network of teams, breaking down silos -
and work directly with customer facing profit centers of the business. I remember
writing research in the early 2000s about the emergence of "integrated talent
management" and the need to build centers of expertise in recruiting, learning,
compensation, analytics, and other parts of HR. Today, while these domain
specializations continue to be important, almost all problems are multi-discipline. If you
have a turnover or performance problem in sales, for example, the solution could
involve recruiting, training, leadership development, rewards, communications or
culture. To address this problem high-impact HR teams operate as agile consulting
groups, bringing together all the disciplines into action when a client problem is
surfaced. This requires cross-training, inter-disciplinary relationships, and job rotations
within HR.
7. Regenerate, professionalize, and continuously develop your HR
professionals, making sure they are current and cross-trained; don't let HR be a place
to "throw people" who can't perform in other parts of the business. While the structure
of your HR organization is important, it's even more important to operate as an agile
organization, give your people lots of opportunities for developmental assignments,
external education, research, and visits to peer companies. Some of the most successful
HR organizations today don't follow the rules: they "reinvent" what they're doing
through good ideas from peers, and lots of experiments, A/B testing, and a hard look at

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 data. High-Impact HR teams continuously develop themselves, they have internal HR
universities, and they thrive on hiring people who want to learn and evolve in their role.

Where Do You Stand?

These seven findings are inspiring to think about - but how do we get there from here? What
specifically can HR departments do to address this "disrupted work" world we operate in
today? And how far are you from "high-impact?"

Let me show you our new maturity model. After analyzing data from more than 1,000
organizations, we correlated and grouped the practices into four categories, and found the
aggregate looks like this:

As you can see from this data, almost half the companies we surveyed are still operating in
what we call an "unintentional" or "survival mode." Companies at level 1 companies are just
trying to keep the lights on in HR: they are focused on the "Hard Things," and are quickly
reacting to the needs of management. Many of these companies are fragmented (they have
small HR groups distributed into different business units); many are underfunded (they might

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 report to the CFO and are focused more on reducing cost than on improving organizational
performance); or they are simply growing too fast to evolve HR to a strategic function.

Level 2 companies are more organized and professionalized -- they hire leaders in the domain
specialties (head of recruiting, learning, compensation and benefits, organizational design,
etc.) and they buy and build tools to scale without personal interaction at every point. They
may have an employee self-service portal, a cloud-based HCM system, and they are starting
to get reliable HR data.

At level 3 companies the organization has the time and perspective to "catch its breath" and
can focus on culture, change, and the need to build management muscle, productivity, and
updates to the organizational model to drive innovation and performance. These companies
tend to be companies that have marched up the ladder from Level 1 to Level 2 over many
years, and their CHRO or VP of HR is tightly linked to senior business leaders, focused on
driving business results, not just compliance and operational HR excellence.

At level 4, companies are becoming experimental, they are pioneering new ideas, and they are
building and buying technology in sprints or agile projects. One of our clients tried three
different performance management programs, for example (one with no ratings, one with
numeric ratings, and one with qualitative ratings), and used this experiment to decide what to
roll out globally. Another developed its new career model through a "hackathon" and
crowdsourced ideas to help build a better career experience for employees. These companies
may be using behavioral economics or advanced analytics to learn how to "nudge" employees
into more productive behavior; they are partnering with IT to deliver innovative new learning
solutions, and much more.

In Today's Disrupted World of Work: HR Matters More Than Ever

Progressing up these four levels takes senior leadership commitment, investment, and
continuous effort. The CHRO must lead the charge, aligned with business leaders and bringing
the HR team together into a cohesive unit.

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 This effort will pay off: our research shows that Level 3 and Level 4 companies are typically
more profitable, they grow faster, and they have higher levels of employee engagement. These
practices clearly drive results.

The research has lots of detail, but let me conclude with a simple message. Today's "disrupted
world of work" demands leadership, creativity, and passion from HR. The days of HR teams
wishing for a "seat at the table" are over: you've been given the opportunity to lead. High-
Impact HR professionals should lead a crusade to make the work experience productive,
engaging, and rewarding. Business leaders will be thrilled.

I know that HR professionals are up to this challenge, and I hope this research gives you
inspiration and ideas to "rethink the disrupted world of work" in your own organization.

Copyright 2017 Deloitte Development LLC. All rights reserved.

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About the Author: Josh Bersin is the founder and Principal of Bersin by Deloitte,
Deloitte Consulting LLP, a leading research and advisory firm focused on corporate
leadership, talent, learning, and the intersection between work and life. Josh is a

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 published author on Forbes, a LinkedIn Influencer, and has appeared on Bloomberg,
NPR, and the Wall Street Journal, and speaks at industry conferences and to
corporate HR departments around the world. You can contact Josh on twitter
at @josh_bersin and follow him athttp://www.linkedin.com/in/bersin . Josh's
personal blog is at www.joshbersin.com .

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