Report: Many HR Departments Lack Crucial Skills for Success

By SHRM Online staff Feb 7, 2011
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A stepped-up level of performance and acquisition of new, critical skill sets will ensure that human resource organizations are equipped to help their companies drive bottom-line impact. However, many HR professionals are in as great a need of these skills as the proverbial cobbler’s children are in need of shoes, a research report released Jan. 26, 2011, by the consulting firm Bersin & Associates indicates.

The data from surveys and interviews with more than 720 global organizations found that overall spending levels, organization structure, and team size have far less impact on business performance than the skills of the HR professionals themselves.

“This research clearly shows that the days of bloated HR organizations focused on administrative tasks are over,” said Josh Bersin, chief executive officer and president, Bersin & Associates. “Lean, technology-enabled, well-trained HR teams are able to take advantage of modern talent practices and partner with business leaders to drive impact.”

These findings emerged from a two-year global benchmarking study that looked at 14 talent management and HR effectiveness measures across global businesses. Among the measures examined include a company’s ability to:

  • Source the best talent.
  • Hire and onboard top candidates.
  • Identify and develop leaders.
  • Build a culture of learning.
  • Allocate compensation effectively.
  • Drive high performance through coaching and feedback.

“Our research revealed that many HR teams are unprepared for the future,” said Stacey Harris, director of strategic HR and talent management research for Bersin & Associates and author of the report.

“Twice as many HR organizations gave themselves poor marks in these 14 critical areas than those that rate themselves excellent. This shows how difficult it is for HR organizations to train their staff, stay current with new practices, and create a culture of business partnership among their HR leaders.”

Moreover, the research determined that the decades-old “HR generalist” model is no longer effective, unless these individuals are highly trained and connected to senior business leaders. The key competencies that drive results today are familiarity with integrated talent management, understanding of workforce planning, and comfort with social networking and HR technology.

Additional research findings reveal that:

Companies that empower key HR professionals to take on a “strategic business partner” role create HR teams that outperform the average HR organization by 25 percent or more. Such companies typically outsource HR administrative functions and realign their HR business partners to work with line executives on hiring, coaching, leadership and collaboration.

Most HR organizations are poorly prepared for the future. They're not fully familiar with social networking, new career models, global recruiting and leadership, or enterprise change management. The result: HR organizations that focus heavily on more-advanced internal HR skills outperform those that don't.

HR’s strategic ownership of knowledge-sharing, collaboration and social networking drives greater business impact than many traditional HR strategies. Companies that focus on these tools for empowerment are delivering twice the business improvement of those that focus on traditional HR strategies, such as pay-for-performance or HR information management systems.

Engaging in the leading-edge practice of workforce planning, including enterprise forecasting and skills-gap scenario planning, is one of the greatest drivers of business results. For example, those companies that excel in workforce planning drive four times the value of those companies that focus on the consolidation of HR technology systems.

HR must continue to excel at the basics. Payroll, benefits, and administration are still critical factors in business success, and today these functions must be globalized and deal with a highly contingent workforce.

The report, The High-Impact HR Organization: Top 10 Best Practices on the Road to Excellence, includes benchmarks, tools, case studies, operational frameworks and proven service models that define best-practice human resources organizations.

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