When HR and business communicate
Most HR professionals trace the origins of “HR business partnering” back to 1997 and HR expert David Ulrich’s book Human Resource Champions. In its simplest terms, business partnering is getting HR professionals engaged in the business and delivering real value to the organisation.
“For me, it helps to break the concept down into two elements. One – the generic sense of business partnering, where all functions and departments of HR strive to add real value to the business; and two –the actual strategic aspect of business partnering,” says Thomas Fuegner, HR Director – Asia-Pacific, Black & Veatch International.
In the former, he explains that HR functions look more closely at what they are delivering, as opposed to what they are doing, and work more closely with business leaders to help them achieve successful business results.
Recruiters, for example, would no longer send piles of unfiltered résumés to hiring managers, but rather develop a better understanding of business needs and associated competencies and provide leaders with short-lists of previously-screened, highly-qualified candidates.
“Delivering value to the business becomes paramount throughout the HR organisation,” says Fuegner.
Strategic HR business partnering, on the other hand, is where HR has the often-referenced “seat at the table”. Senior HR leaders work with business executives to tie HR strategies directly to business strategies.
For example, if a business strategy is to enter selected emerging markets, HR would then “bring to the table” strategies to attract and develop local talent and local leaders, identifying gaps or shortages in job and leadership levels, together with recommended actions to address.
“Not all HR professionals at all levels of the organisation can be considered strategic business partners, but all HR professionals should strive to effectively partner with the business,” says Fuegner.
True and effective HR business partnering translates to proactive support to business leaders by providing them with people insights that will be helpful in meeting business requirements.
“Metaphorically, if an organisation is a car, HR business partners can help provide people dashboards that will enable the driver (management) to drive the car (organisation) not just efficiently but effectively,” says Amor C. Villalon, Director – Organisation Capability and Development, Regional HR, Fujitsu Asia.
For HR to be a strategic business partner, professionals must have a passion for HR as a driver of business results. “They must also have strong business acumen, using it to identify key issues for the business and apply HR knowledge to drive solutions, recognise trends, and identify systematic approaches to solve problems in this fast-paced, dynamic environment,” Villalon adds.
Fuegner believes HR needs to first look at the business and agree on the need to change and identify outcomes that are to be achieved – outcomes that will bring value and have a direct impact on company goals and objectives.
“Based on these findings, one would then go about re-designing the HR organisation – what departments, policies, practices and processes need to be changed, revitalised, added or removed,” Fuegner continues.
Being an HR Business Partner is a “way of life”, says Soumitra Gupta, Regional HR Director – Asia & CEEMEA, Templeton. HR must reflect on whether it has the right skills within the department to translate organisation strategy into business strategy.
“HR should ask itself how much it knows about the market it operates in, and what the likely talent implications are,” says Gupta. “It must essentially speak the language of the business so that it’s not only a support function to the business.”
Understanding the business is essential – at every level of an HR organisation – and any change anticipated should be in response to a need of the business. HR policies and processes need to be aligned to the business with the focus on delivering value.
“If HR has the necessary understanding, (and) sees trends and such, then it can be a strategic partner of the business,” says Gupta. “However, if HR only comes into the business strategy planning towards the end, it will not be able to provide the insights that it has the potential to contribute.”
HR business partnership is a continuum. It is about building influence and influencing effectively to establish itself as a trusted advisor, says June Cho, Director – Talent Acquisition (Asia-Pacific), Symantec.
“Because it is a continuum, the transformation needs to ensure that at all times, there is at least a basic, flawless and operational excellence in the delivery of core HR products and services before it can progress into strategic consulting or it finds its journey disrupted by lack of basics,” she explains.
It is therefore essential to free up much of the organisation from many of the administrative aspects of HR. “Commonly referenced solutions to this have been the development of centralised Shared Services organisations and/or business process outsourcing,” says Fuegner.
Assessing HR business partners
One of the most important and possibly most difficult aspects of transformation is to look at an organisation’s HR professionals and assess them relative to the competencies they will need to actually partner with the business.
The right people with the right skills need to be in the right place, says Fuegner.
“Ultimately, there needs to be a great amount of collaboration between the different aspects of HR so that at the end of the day, there is one single, smooth delivery and not a piece-by-piece one,” says Gupta.
“HR needs to clearly demonstrate the effect of its policies and processes on core business outcomes, such as productivity,” says Fuegner. “There also needs to be a range of indicators that allow HR to demonstrate its effect of the medium- and long-term health of the organisation.”
Some metrics (see Table 1) that could be employed include productivity, hire-to-offer ratios, and pay for performance measurements.
Fujitsu Asia identified core competencies required of a successful HR business partner in 2010 and used those competencies in assessing its HR leaders and members across the region. “The competencies are embedded in our different processes from talent acquisition to talent review,” says Villalon.
HR will become a true business partner when management and staff alike start going to HR as the go-to person if they encounter people problems. “HR then becomes an active part of the organisation, not a passive backbencher,” says Gupta.
Sampling of competencies for HR Business Partner
• Strategic – business acumen, problem solving, decision quality, creativity and innovative management, presentation skills
• Operational – priority setting, organising and planning, delegating, managing and measuring work
• Interpersonal – customer focus, ethics and values, self-knowledge, peer relationships, managing direct reports
• International – global business knowledge, cross cultural agility and sensitivity
Metrics to assess HR business partners
• Productivity – cost per employee, revenue per employee
• Employee engagement surveys
• Turnover analyses – looking at top performers, reasons for leaving, gender, age, and time with company
• Hire-to-offer ratios – reasons for turning down offers, university recruiting metrics
• Cycle time – date requisitions prepared, date employee reports to work
• Pay-for-performance measurements
• Percentage of payroll spent on training