When I think of HR’s role in 2015, the turbocharger comes to mind.
As defined on this How Stuff Works site, turbochargers “increase the power of an engine while surviving extreme operating conditions.”
Consider this: As described in this HBR article, executives have taken to using the military acronym VUCA – Volatile, Uncertain, Complex Ambiguous – to describe the world in which they operate. And if the impacts of the recent oil price crash are any indication, 2015 is going to be one heck of a roller-coaster ride.
If you work in HR, uncertainty and ambiguity at the macroeconomic level can create ever-shifting business priorities for your senior leaders, leaving you feeling overwhelmed. But if you follow the 5 steps in this post, you can cut through the competing priorities in 2015 and gain clarity. Ultimately, this will help you deliver an informed point of view about talent issues to elevate your role in the business.
Step #1: Subscribe to the Economist
Many of the market dynamics in 2015 will affect people and how they contribute to the business. For example, if you are overseeing talent for a large manufacturer, executives may be getting more confident because energy prices are down and production is cheap, which creates more opportunities to invest in people.
To understand how shifting external market forces will drive business priorities this year, you need up-to-date information from a reliable source. If you haven’t already done so, subscribe to a publication like the Economist to get analysis on macroeconomic trends in plain English. If you aren’t a sit-and-read-a-print magazine type, you can even get their Espresso version app for smartphones to get news and analysis about what’s on the global agenda.
Step #2: Ask These 4 Business Questions
It is not enough to have a macro understanding of global market forces: you need to understand what dynamics within your organization need to change to respond to developments in the outside world.
But before you can begin to see how things need to change, you should have a solid understanding of your organization’s current business goals. Ask these four questions (check out this HR transformation post by Dave Weisbeck, Visier’s Chief Strategy Officer, for more tips about asking strategic questions within an HR context):
- Who is our core customer?
- What are the problems our company is solving for our customer?
- Who is the competition?
- Where does the organization stand in relation to the competition?
Once you are armed with the answers to the questions above, as well as information about global trends, you can ask questions that take all three factors — macroeconomics, business strategy, and talent — into account, such as: What opportunities may exist to lure the talent we need away from the slowing oil and gas sector? (Not all oil and gas jobs are technical, so there may be an opportunity to get more top marketing talent, for example.)
Step #3: Know Exactly Who Drives Value for Your Organization
As Peter Cappelli outlines in this article, the last few months of steady job growth suggests that employee turnover rates will pose a big risk for businesses. Retention is no longer just a challenge to address with star performers — you need to look at people at all levels of the business who play a critical role.
The solution, however, is not to just throw money at one-size-fits-all employee retention programs. You need to identify and focus on the right employee populations, in order to spend your limited budget wisely.
Consider the way Disney identifies roles where differential performance has the biggest impact on customer experience. Which employees make the biggest difference in terms of customer experience at the park? If you guessed “the guy in the Mickey Mouse” suit, you are wrong. As referenced in Beyond HR: The New Science of Human Capital by John W. Boudreau and Peter M. Ramstad, for Disney it’s actually the people who keep the park clean and tidy. A poor maintenance worker can negatively impact the service experience far more than Mickey in his costume. A personable and service-oriented maintenance person can truly deliver on the magic of Disney by the way they engage with guests. They can even go above and beyond to offer a cookie to a child who is throwing a tantrum, for example.
To determine who makes the biggest difference in terms of your business, follow the same process as Disney and identify the roles where a differential performance leads to substantially different outcomes. For example in the “bricks and mortar” retail sector, the store manager role is often key to overall results.
#4: Gather Evidence
To deliver value to your executive team members, you need to have a point of view on how talent affects business outcomes. But before you go making recommendations, you need evidence.
Let’s say your company needs to increase productivity to meet customer demands, but doesn’t have the budget to hire new people. Your CEO might say, “we just have to tell people to suck it up again this year.” But from your perspective, you can see that this kind of message won’t resonate with employees who have been putting in 80 hour work weeks for the past two years.
You can see signs of burnout in people’s eyes, and are worried about turnover. But it’s not enough to tell your senior leaders that you are concerned about they way long hours will impact employee engagement and retention — You have to prove your hypothesis if you want to be taken seriously.
To do this, you need to be methodical. For example, if you are concerned about burnout, make a concerted effort to monitor and track areas such as increases in absence or how often people are pushing for pay increases or job reclassification. Pay particular attention to the people who drive the greatest value for your organization. This can yield evidence that burnout is posing a real business risk.
For more information on gathering evidence, take a look at my previous post, Want to Shape HR Strategy? Use this Storytelling Method to Establish Credibility.
#5: Share your point of view on what your business should be doing with its people to drive business performance in 2015
The high-impact leaders in the field of HR consistently share a point of view on what the business should be doing for and with its people to improve business performance. For example, it is not enough to just present evidence that key people are burned out, you need to quantify the impact to the organization and specify further risks. You also need to have a costed plan to solve the burnout problem. Identify how to reduce travel or introduce internships directly supporting the high value players or offer retention bonuses with a timeframe that should get you over the hump. The approach taken needs to match your business and your resources and be scaled to the impact of the risks you are aiming to avoid.
Deliver Value to Senior Leaders in Uncertain Times
At the end of the day, you have a better chance of being heard if you have data to substantiate your point of view. HR has long been perceived as a transactional function, which has caused many people to argue for the splitting of HR, with one administrative function focusing on managing compensation and benefits, and the other (made up of people who have backgrounds outside of HR) playing the more strategic role of improving the people capabilities of the business.
But as Dave Ulrich argues in this article, we should teach the HR professionals who have the chops to think strategically what they can do to deliver value. And with a data-backed story, along with knowledge of macroeconomic forces and internal business priorities, HR can be a powerful, turbocharged partner to executives navigating uncertain times.
To learn more about moving from operational to strategic, check out this guide: How HR Can Move the Needle for Business.