All US public sector organizations are by now painfully aware of the big budget cuts coming their way over the next few years. One of the many ways they are scrambling to respond is to push their corporate functions through “transformation processes,” which essentially means changing the way they are organized as well as the work they do and the way they do it.
The response makes sense as vast budget cuts and dramatic staffing changes are limiting the supply of resources, while the demand for their work will not change. In a recent survey of public sector professionals, 88% of HR professionals projected more work over the next three years but, across the same group, only 21% believed their resources would also increase.
While not governed by the elections and political outlook, this requirement to do more without a concomitant increase in resources is happening across global business as well. Senior HR managers are under pressure to meet cost constraints and this has prompted over 80% of HR functions to embark on – or at least plan – HR transformations.
Four Ways to Make the Most of Your Transformation
Lessons learned from these efforts in the business world show that most HR transformations fall flat. Only 16% of them achieve the cost saving targets they aim for, and only 19% hit their targets for improving the service they provide. This is not a good return on what is often a massive change management effort that costs money and time, and results in a lot of upheaval and anxiety for employees, as well as a performance dip.
Organizations that are embarking on HR transformation should focus on four things to make the transformation – and the function that emerges as a result – more efficient and effective.
Change the work, not just the structure: In any transformation, there is a balance between getting things right and doing things quickly. To make transformation successful, HR leaders need to think past the structure of HR and consider how workflow has to change.
However, the process for mapping workflow can take months – if not years – while the pressure to change needs to occur almost immediately. Identifying and focusing on the most important intersections in the talent management (TM) part of HR will simplify processes and improve overall TM alignment, resulting in functional efficiency gains in days, not months.
Partner strategically with the line, don’t be an “order taker”: In most organizations, the relationship between the line and the HR function looks more like that between a customer and B2B supplier – where the line submits requests and HR reacts accordingly. But when HR is relegated to an “order taker” role, HR can’t properly identify talent-related challenges and the necessary response, nor can it properly prioritize the work needed to help contribute to the line’s goals.
By setting up an HR business partner model and redefining its partnership with the line in a way that extends strategic HR support across the organization, HR will be able to do two things. First, to help the line address the underlying root causes behind talent challenges and, second, to differentiate between business-unit specific issues and larger, enterprise-wide trends. All of which makes HR a far more responsive, strategic, and forward-looking partner to the business.
Prioritize mission-critical efforts, not everything is created equal: You can’t do everything at once, and nor should you. When HR employees’ efforts are spread too thin across a number of different initiatives, everyone suffers – in fact, today only about 20% of managers outside of HR believe that HR is effective at addressing the talent needs of the business.
But through a combination of flexible staffing, organizing HR initiatives as time-bound projects and collectively prioritizing these efforts on a regular basis, it’s possible for HR to minimize service disruption and still meet evolving organizational needs. This will result in an equally effective HR organization with 40% less overhead, according to CEB analysis.
Benchmark your function, understand what opportunities lie in front of you: While many organizations let internal priorities guide the development of their HR strategy, doing so can mean your making improvements in a vacuum without much understanding of how other organizations are going about the same process.
Some of the most successful HR teams benchmark their talent data and functional maturity (how developed or “mature” the function is) against peer organizations to contextualize and prioritize risks. This allows for more robust and precise assessment of overall function health, promotes identification of major talent risks, and helps to prioritize the next steps for addressing them.