Saturday, May 10, 2008

HR progress

I just got back from the annual Center for Effective Organizations (CEO) sponsor meeting, and one tidbit should be of interest to you all. The team at CEO has been doing a research study on the state of HR since 1995, studying a number of issues by collecting data on how the HR job is evolving. The bottom line result is that although the respondents say that the HR function is changing, that they are doing more strategic work and less administrative work, the raw data show that things have been pretty stable. For example, in 1995, respondents said they spent 15.4% of their time on administrative tasks, and in 2007 they say they now spend 15.9%. In 1995, they said they spent 21.9% of their time in the strategic business partner role, and in 2007 it's 25.5%. Why, even though we think things are changing (by the way via other data, the study shows they really do perceive that they are spending their time differently), does the data show basically no significant changes in how HR spends its time? I'm asking John Boudreau to chime in here so he can explain the details of the study for those of you who want to learn more.

2 comments:

stevem said...

Theresa,

Permit me an argument by analogy . . .

In thinking about your paradox (belief we have become more strategic, but little change in actual time allocation), I am reminded of another paradox: “labor-saving” appliances that don’t save labor. Washing machines, vacuums, dishwashers, etc. all proliferated in households during the 20th Century. Yet the data on household work suggests that there it requires roughly the same amount of time today as it did 100 years ago. How could this be so??

Well, it appears to be so because our standards for cleanliness of homes; the amount, variety, and maintenance requirements of clothes; and the complexity of storage and preparation of food have all increased apace with our ability to do more (see Bittman, Mahunud and Wajcman, 2003, for a quick overview of this literature, www.sprc.unsw.edu.au/dp/DP129.pdf).

If this is in any way parallel to HR, what we might find is that the decades-long effort to have HR be become less transactional (e.g., building systems to enable manager self-service, benefits outsourcing, and on-line training) has – instead of creating a wave of strategic human capital initiatives – channeled the newly-available HR time into:

1. Building and maintaining those new systems (e.g., standards setting, oversight and problem-solving with outsourcers), and/or

2. Addressing escalating expectations for day-to-day HR services (including escalating expectations that are self-imposed by earnest HR professionals).

An example of escalating service expectations could be those for more, and more individualized, benefits communications. In times past, benefits communications often were largely comprised of an annual publication of printed materials (substantial in bulk, but often only slightly modified from year-to-year), followed up by laborious transaction management of changes made during the open enrollment and throughout the year. These communications and the transaction management are now done relatively easily via intranet.

However, the efforts of the same benefits staff today are often occupied by on-going employee education about benefit costs, comparative information about providers, individualized advice communications to members of high-risk populations, wellness and preventative incentives management, unique benefit packaging in relation to life-change events, and so on. Indeed, the “ease” of benefits management may well have led to directly to a substantial increase in the complexity of benefits offerings.

In sum: It may be that becoming less transactional (even in the name of becoming more strategic) often simply creates a vacuum with which we fill more operating activities and HR services. None of these activities and services are bad per se, and they may be quite valuable.

But they are not the same as “becoming more strategic”. If that is the goal, it likely we will need to first and foremost become clear about strategy, the strategic contribution HR can make to the business, and the skills and venues in which to make this contribution. And, perhaps, only later worry about how we find the time to do the dishes.

Steve McElfresh
www.HRFutures.net

John Boudreau said...

Steve's comment and analogy are fascinating and I think likely quite valid.

No doubt, the HR profession has improved a great deal over the 12 years that the Center for Effective Organizations has been studying this issue. Still, the percentage time spent on "administrative," "services" and "strategy" has not changed. As Steve notes, we know that technology, data bases, online interfaces, and transactional consolidation has been massively enhanced. Our work at the Center also suggests that leaders outside the HR profession increasingly "get it" that talent decisions matter, and more recently "get it" that the strategic contribution of HR depends on the quality of those decisions, not just the quality of HR services and systems.

The professional challenge for HR in the 1980's and 1990's was often to move organizations from a strict focus on HR as a compliance monitor or cost reducer, to seeing HR as a respected and reliable service provider. That was an important transition. So, it is understandable that the instinct would be for leaders to keep pushing for greater effectiveness in delivering great services requested by our constituents. Essentially, "washing the dishes" that are handed to us.

The paradigm extension is that at some point the dishes are clean enough. We don't have to get them perfectly sterilized. In the same way, it would be a mistake to think that we need to create perfect HR services before we extend our focus to tracking the quality of talent decisions, wherever they are made. This "decison-science" work will at first be rough and rudimentary compared to our services work, but in the end the combination of compliance, services and decision science will make a much more significant ultimate contribution.

Getting and keeping the dishes clean, and at reasonable cost is always necessary, and the standards will continue to rise. However, we must also improve our decisions about what's for dinner in the first place.