Once again, HR is enduring a season of discontent. A recent cover of the Harvard Business Review (HBR) featured a picture of a cartoon bomb next to the words “It’s time to blow up HR.” And an earlier HBR article by Ram Charan proposed breaking up the human resources function and giving half its responsibilities to the CFO. Articles in The Wall Street Journal have gone a step further, suggesting that some businesses may not need HR at all.
There is some logic behind the latest wave of critiques. According to Deloitte’s Global Human Capital Trends 2015 report, which included data from more than 3,300 professionals in 106 countries, HR gives itself a grade of C+ for driving talent solutions, while some business leaders think it deserves a D. And the pressure on the profession seems to be getting worse: A survey of 310 HR leaders published by Human Resource Executive magazine in July 2015 indicates that 31 percent believe their stress level is significantly higher now than it was a year ago.
So what’s really going on? I think there is a fundamental shift taking place, and we as HR leaders should also transform our attitudes. The employment market, the business environment and the very ethos of work have changed dramatically over the past decade. Let’s look at how:
Hiring top talent is tremendously competitive. New research by MRINetwork shows that 90 percent of recruiters think candidates are driving the recruiting process.
Millennials are often in charge. According to Pew research, more than half the workforce is under age 35, yet more than 10,000 Baby Boomers turn 65 each day—and most continue to work. Many companies are struggling to build leadership skills among young people while simultaneously engaging and aligning older workers with their younger leaders.
Work has become amazingly complex. Data from KPCB, McKinsey and others indicate that typical workers look at their mobile phones more than 100 times a day and spend as much as 40 percent of their workday answering e-mail. According to Deloitte’s Global Human Capital Trends 2015 report, more than 70 percent of organizations rated the need to simplify work as an important problem.
All these pressures seem to point to one thing: HR needs to reinvent itself. It’s time to get out of the box of developing compliance programs and into the world of making work better. Creativity is key.
I know this sounds simplistic, yet it’s anything but easy. How can we improve the work environment, attract top people, accelerate leadership development and make employees more productive? Are these the challenges we learned about in HR training? Not really. And to further complicate matters, the tools and technologies we likely need to address these issues are changing every day.
Take, for example, the topic of employee engagement and retention. Gallup data indicate that only one-third or less of the workforce is highly engaged. Despite this alarming statistic, many of us continue to field only annual engagement surveys that don’t fully probe the issue. Meanwhile, many companies that have achieved high engagement levels now conduct weekly pulse surveys of their people, have open tools for feedback and let employees rate their managers online. Radical new ideas? Yes. But they really can work!
Now let’s look at performance management. It’s clearly under attack, since more than two-thirds of companies are redesigning the process, throwing away forced rankings and, in some cases, eliminating ratings altogether, according to Global Human Capital Trends 2015. It stands to reason that forcing one adult to give another a numeric “grade” will lower engagement and breed resentment—yet many companies keep doing it. Others, including Adobe, Accenture, Deloitte, Kelly Services and many more, are simply starting over by redesigning their performance management processes from scratch.
How about the way we recruit? Do your job postings stand out from those of the competition? Probably not. Successful hiring today involves marketing, brand-building and cultivating candidates years before they apply for a job.
Where to from Here?
So is this the end of HR as we know it? Do we all need to look for new jobs? Should we take a bomb to the whole function?
I don’t think so. Most of us know what we need to do. It’s time to abandon office groupthink and redesign our programs on a fresh sheet of paper. We need to look at new tools, talk with our managers, and sit down and brainstorm.
That might mean throwing away the book and taking risks that may or may not pay off. But that’s how we will learn. Experiments are everywhere. Consider the following examples:
- Leaders at T-Mobile, which operates in one of the most competitive markets in the world, took the company’s HR team offsite and said, “Pretend we have no HR and start all over.” This approach gave HR the freedom to radically change how it recruits and manages people, driving dramatic improvements in engagement, customer service and retention in the last two years.
- GE has embarked on a global program to help simplify how it does business, revamping its performance management process, changing the role of managers, and teaching people how to focus and prioritize.
- Google and Deloitte are relying on behavioral economics, data and the concept of “choice architects” to improve organizational decision-making and motivate employees. The goal is to stop dictating what people must do and instead give them “nudges” and incentives to eat better, collaborate more and build a culture of performance.
- A number of mission-driven companies, including Deckers Brands and Atlassian, publish culture manifestos and employ chief culture officers to monitor leadership and team culture constantly.
What these and many other effective HR teams have in common is their willingness to lead and try new things. They try pilot programs and learn through iterative improvement.
Let’s show those who criticize human resources that we’re up to the challenges posed by today’s world. If we expand our thinking, learn from others and measure what we do, we can help reinvent HR, drive business value and make our careers more fulfilling. It’s time to boldly move forward.
Josh Bersin is principal of Bersin by Deloitte, Deloitte Consulting. Bersin by Deloitte is a research and advisory consulting firm in enterprise learning and talent management.