By Ian J. Cook, CHRP

There are many sources of innovation. Most often though, stories of innovation focus on the breakthrough of an inspired individual, someone whose intuitive talents or spark of genius leads to something new. In this light, innovation is hallmark of the gifted few whose high levels of creativity or mysterious gift of insight sets them apart.

In truth, there are many sources of innovation. For every unique spark of insight there are many stories where the impossibility of the situation has led to repeated attempts to solve a problem, which has led to incremental enhancements and ultimately an innovative solution.

It’s not as romantic a tale in the telling, but it is a timeless truth of necessity and resultant invention. We are imperfect historians as such. Human nature pays little heed to the grind, failure, and confusion that accompanies the scramble out of an impossible situation. The achievement is celebrated, the process is ignored. The lesson learned is that at some point a bright idea saved the day. The truth is far more messy.

Although desperation is often the “mother” behind great innovation, there is another factor that bears consideration: spotting the signs of an impossible situation early. This provides the space and time to work through the complex process of re-learning how to be successful in the new context or environment.

On a prior page of PeopleTalk (Winter 20101), we explored the ways in which innovation may be brought to a situation. A year later, our purpose is to alleviate the need for a messy scramble to change by facing the simple fact that HR functions are heading for what looks like an increasingly impossible situation: trying to deliver an increasing workload with fewer and fewer resources.

While this situation can and has been managed through finding efficiencies, alerting processes, transferring work, etc…there comes a time. At a certain point, if the trends of increasing workloads and diminishing resources continue, and all the tinkering that can be done has been, something greater is required to solve the challenge – a fundamental redesign of our approach.

The evidence we have cannot predict exactly when this trigger point will come. It is likely to hit different organizations at different times. What we can demonstrate is that the activities which drive HR workload are increasing rapidly, and yet the resources available to service these needs are declining. It is also true that this situation has been consistent for some time. Herein, is all the drive needed to inspire innovative solutions.

We have made some bold claims – it is time to substantiate them.

What drives HR workload? There are many factors some of which are relatively stable and some of which vary based on choices made by people within the organization. Three key areas where HR is required to respond to demand are Absenteeism, Turnover and Vacancies. In each of these areas, HR’s role is to manage to the requirements of the organization as they ebb and flow. Over the last 2.5 years these three areas have increased in volume between 10 and 50 per cent. The chart shows the Index for the drivers of HR workload. Combining the three factors and taking Q1 of 2009 as a start point, the overall volume of activity from these three factors has increased by 27 points.

While it is plausible for workload to increase if the resources available keep pace, this has not been the case. In looking at HR resources we have considered two main factors. The first is the HR headcount ratio which indicates how many people each HR person has to cover. The second is HR costs per employee. The outsourcing of HR tasks can change the HR headcount ratio; however, the costs of this outsourcing will be reflected in an increased spend per employee.

The number of employees covered by each HR person is on the rise. Over the time period tracked, the median ratio has increased by 40 per cent. What this means is that each HR person is responsible for 40 per cent more people than before. Over the same period, the median spend per employee has decreased by three per cent.

The chart shows a combined index of the resources available to HR, both staff and dollars, and how these have changed over the last 2.5 years. There has been a 22 point reduction in this index from Q1 of 2009. The lift at the end of 2009 was due to HR spending, most likely related to staff reductions. Since that time the trend is steadily downwards.

The evidence from organizations shows that HR workloads are increasing at the same time as HR resources are decreasing. A recent study into the challenges facing HR heads4 by BC HRMA showed that all were focused on finding efficiencies and seeking ways to streamline the existing system. Mixing this information into the crystal ball of projection suggests that the time is now for innovation. The workload is set to keep increasing as economic volatility persists and the dynamics of a multi-generational workforce play out.

We have and continue to seek incremental improvements. All of these are hot elements in the crucible of change. It is time to join Einstein on his light beam and instead of asking how do I do this faster or cheaper. We should ask –

• What would ops do if they ran HR?
• What would the organization do if there was no HR function?
• What if HR became the shared responsibility of the employees – what would they do?

We are not suggesting that you simply act on the answers you find. However in this exploration you may find the spark of the bright idea that saves the day.

A global citizen, Ian J. Cook, MBA, CHRP (ijcook@bchrma.org) has chosen to make his home in Vancouver where he heads the growth of BC HRMA’s research and learning services.

(PeopleTalk Winter 2011)