Profit 100 Survey Reveals 3-Step Strategy for HR Success
What is your company’s biggest asset? What is the most important driver of future success? It’s the people. Recognizing how to best manage your most valuable asset – your human resources – will be the differentiator between success and failure.
In 2010, The Workforce Consultants conducted a survey of the organizations listed on the Profit 100: Canada’s Fastest Growing Companies. In order to be listed on the Profit 100, organizations are assessed and ranked according to criteria such as revenue, growth percentage, and profit margin. The purpose of the survey was to determine what successful organizations are currently doing within the human resources realm and where they see themselves heading in the future. Bottom line: they recognize their mission is to review, reinvent, and realize.
Step #1: Anchoring HR’s Strategic Seat at the Table
According to Canada’s fastest growing companies, putting the human resource function at the head table is a first step toward eliciting the results businesses need. Long gone are the days when “human resources” was solely a function that passively existed to handle complaints and paperwork. Today’s human resources function looks and acts very differently.
Christine Andrews, head of talent management at Doxim Inc., maintains that “HR is considered a true partner with the business in driving results and optimizing organizational performance”.
So how do you know if your HR department is in the past, present, or future? Consider asking 3 key questions; “Do they have industry and global awareness?”, “Do they exhibit business knowledge?”, “Do they possess systems thinking?” If you can confidently answer yes to these questions, chances are you are on the right track.
Warren H. Wong, VP & chief talent officer, Elastic Path Software Inc., provides a forward thinking message when he states, “a vision focused towards results combined with a clear business plan and strategy allows talent management to become an enabling function”. Aligning the human resources function to the strategic planning of an organization may seem obvious to most, but execution can be somewhat challenging for organizations.
According to the survey of Canada’s most profitable companies, 45% of respondents rated their ability to be involved in strategic planning activities as “excellent”, the top rating on a 5-point scale. Also of notable significance was that close to half of respondents indicated they had an “excellent” understanding of the organization’s financial resources and limitations.
Unsurprisingly, the majority of participants in the survey also mentioned that their understanding of the history of the organization (63%) and the organization’s values, mission, and vision (59%) was “excellent”.
What these results tell us is that making decisions for an organization is like making decisions for a family. If you understand your family history, what your family would like to accomplish in the future, the existing financial constraints, and have the capability to make strategic decisions, you can do things. You can decide whether a new addition to the family would be suitable (akin to hiring employees), whether growth or information is required (similar to training and education in an organizational setting), and even when the right time to expose the kids to the public would be (comparable to an IPO)! These are all human resources related decisions.
Step #2 – Outsourcing for In-house HR Success
If placing the human resources function at the head table is a first step, what is the next step toward success? The second step involves another trend we are seeing with increased frequency – HR outsourcing. The survey of Canada’s fastest growing has revealed that outsourcing is commonplace within the top tier organizations and vital to the survival of business operations as a whole.
Many organizations have concluded that much of the non-core and non-strategic HR function can be successfully outsourced. For example, at the Annex Group, COO Tom Dutta is responsible for handling the HR department and uses an external resource when necessary. Tom has 25 years of HR experience and also sits on the executive, helping shape strategy and direction for the company.
Outsourcing the HR function is not unlike outsourcing in other realms such as IT, finance & accounting, some aspects of operations, as well as marketing and sales. There are two facets. The first concerns cost and the second surrounds quality. Quite simply, if someone else can do it better for cheaper, you lose out by doing it yourself.
Substantial outsourcing advantages include having access to expertise on an “as needed” basis rather than permanent staff and possessing a foray into the latest and greatest in terms of knowledge, skills, and abilities that would otherwise not necessarily be readily available. According to Sarah Gayer, CHRP, an HR consultant with Sare and Associates, “every aspect of human resources can be outsourced, depending on an organization’s needs at any particular time”. Sarah has consulted across Canada for over 15 years and has noticed an appreciable increase in the organizations now outsourcing various functions, including that of human resources.
Top areas currently being outsourced include 1) recruitment (i.e., the writing of job descriptions, sourcing, interviewing, testing, and reference checking), 2) training, which includes items such as needs assessments, content development, and delivery, and 3) management coaching in terms of writing and implementing policies and procedures as well as issues surrounding health and safety. By outsourcing such administrative aspects, Sarah maintains that “organizations can focus on strategizing and ensure that goals and objectives are met while simultaneously satisfying all stakeholders.”
Step # 3 – Communication is Key
Interpersonal relationship building, collaboration, and communication were highly prized amongst Canada’s most successful companies. Sixty-nine percent of survey participants maintained that an understanding of the goals and objectives of other people was “very good” or “excellent”. The ability to effectively interact with others to produce outcomes was “very good” or better for 76% of respondents. Topping the communication list was the ability to respect the values of others, with a solid 87% of respondents rating this ability as “very good” or “excellent”.
According to Beth Burrows of Kids and Company Ltd., “communication is critical every moment of every day. Even when we think we are communicating well, there are opportunities to communicate better.” Unsurprisingly, good communication will have a good impact on the bottom line and great communication will have a great impact. Knowing how and what to communicate is as much an art as it is a skill. Thankfully for many organizations, and families, communication can be improved upon.
But what about doing something other organizations aren’t doing that will give your organization a leg up on the competition? Is there a magical “super step?”. Believe it or not, the magic step is known by everyone but rarely practiced by anyone.
What is that magical “super-step?”. Evaluation. It is the evaluation of programs, processes, and policies. According to Wikipedia, evaluation is the “systematic determination of merit, worth, and significance of something or someone using criteria against a set of standards.” Quite simply, organizations fail to evaluate and thus miss out on potential opportunities.
Lynda Zugec is the Founder/Chairman of The Workforce Consultants, an international network of specialized consultants within the area of Human Resources.
(PeopleTalk: Winter 2010)