0
Shaping the HR Function of Tomorrow…Today
      Webcast


Denise LaForte and James Millar
June 17, 2010




© 2010 Towers ...
Webcast series: Critical Issues on the Road to Recovery

   The State of the Workforce — Fight or Flight?

   Executive Co...
Today’s experts:
Shaping the HR Function of Tomorrow…Today
                   Thomas Keebler is the Global Practice Leader...
Setting the context

   Businesses are going through significant change
   It has never been more critical that HR be high...
Presentation overview

   Provide some evidence of what’s working/not working today
   Explore how the new world of Agile ...
Why create Agile HR now?

   Apply lessons learned from the recent economic crisis
   Continued shift in focus for HR — fr...
Understanding the requirements of the HR function
requires starting with business talent strategies


                    ...
Top HR service delivery issues: Talent management still top
                             Top HR Service Delivery Issues (T...
Who’s Been Doing What…

                                                  Initiatives Undertaken in Last 18 Months

      ...
…And What’s Working (Or Not)
                                       Initiatives Undertaken in Last 18 Months — Results Ach...
But HR is still transaction-focused
                                  When Managers Initiate HR/Pay Transactions,
        ...
The prevailing HR model has four components, each of
which contributes to an efficient and effective function…




       ...
…though the model has had its challenges
 HR Business       Do business partners have the capabilities needed:
 Partners  ...
Imagine the future — Key differences vs. the prevailing
HR model
   Pull vs. push: Intelligent customers who call on appro...
Key differences between the prevailing model and
Agile HR: Organization Structure and Roles

Prevailing                  O...
Key differences between the prevailing model and
Agile HR: Competencies

Prevailing                            Competencie...
Key differences between the prevailing model and
Agile HR: Governance

Prevailing                                  Governa...
Key differences between the prevailing model and
Agile HR: Technology

Prevailing                                 Technolo...
ORG STRUCTURE AND ROLES




In the future, HR will be structured differently from
prevailing models
                      ...
ORG STRUCTURE AND ROLES




 Org structure and roles
           Business                                                  ...
ORG STRUCTURE AND ROLES




Org structure and roles

                        Business
   Business              Business   ...
ORG STRUCTURE AND ROLES




Org structure and roles

                                                         HR Function
...
ORG STRUCTURE AND ROLES




Org structure and roles

                                                                     ...
ORG STRUCTURE AND ROLES




 Org structure and roles
           Business                                                  ...
ORG STRUCTURE AND ROLES




What’s different?

   Expert Areas (formerly Centers of Expertise)
       Expert Areas are foc...
ORG STRUCTURE AND ROLES




What’s different?

   Business Partners
       Facilitate, enable and equip line managers to c...
COMPETENCIES




Expectations for HR professionals change in an Agile
model
                                      Agile HR...
TECHNOLOGY




In the future, HR technology will be managed differently
from prevailing models
                          F...
Summing up

   Progress has been made, but there’s more work to do
   HR must identify the next HR evolution and form
   M...
Questions?
Denise LaForte
denise.laforte@towerswatson.com
James Millar
james.millar@towerswatson.com




towerswatson.com ...
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Towers Watson: Shaping the HR Function of Tomorrow…Today

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Towers Watson experts highlight he most pressing issues facing HR now and in the future and take a pragmatic look at the next generation of HR.

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Transcript of "Towers Watson: Shaping the HR Function of Tomorrow…Today"

  1. 1. Shaping the HR Function of Tomorrow…Today Webcast Denise LaForte and James Millar June 17, 2010 © 2010 Towers Watson. All rights reserved.
  2. 2. Webcast series: Critical Issues on the Road to Recovery The State of the Workforce — Fight or Flight? Executive Compensation at the Crossroads Revisiting Retirement for New Generations Shaping the HR Function of Tomorrow…Today To access previous events in this series, please visit: www.towerswatson.com/events towerswatson.com 2 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  3. 3. Today’s experts: Shaping the HR Function of Tomorrow…Today Thomas Keebler is the Global Practice Leader for Towers Watson’s HR Service Delivery and HR Technology practices, where he leads their product development, alliance strategies and marketing efforts. His areas of expertise include all facets of administrative and technology solutions, including HR transformation, service delivery design, HR technology strategy development, vendor selection, implementation assistance and project management. Mr. Keebler is located in the firm’s Philadelphia, PA office. Denise LaForte is a Senior Consultant in the HR Service Delivery practice of Towers Watson. She has over 20 years of broad-based consulting experience in the HR area, with special expertise in HR functional design, process improvement, service delivery and global business process outsourcing. She also has experience in strategic change and total compensation design, administration and communication. Denise has a B.S. in finance from the University of Illinois at Urbana-Champaign and an M.B.A. with a concentration in human resources management from DePaul University in Chicago. She has also earned the Certified Employee Benefits designation. James Millar is a Senior Consultant in Towers Watson's HR Service Delivery practice based in Philadelphia. He has considerable global experience in HR transformation, including HR structure, processes, people and technology. James has a broad range of experience assisting organizations with their HR service delivery model, global HR process model, HR systems strategy, HR transformation business case, and program and change management. Prior to joining Towers Watson, he was the Global HRIS Manager with a major chemical corporation, where he led the HRIS program of a significant HR transformation. James has a B.S. degree with Honors in mathematics and computer science from Edinburgh University. towerswatson.com 3 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  4. 4. Setting the context Businesses are going through significant change It has never been more critical that HR be highly effective at supporting business changes while simultaneously reducing its cost base Despite strenuous efforts, HR needs to make a more fundamental shift HR of the future must be more agile to keep up with changing business needs towerswatson.com 4 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  5. 5. Presentation overview Provide some evidence of what’s working/not working today Explore how the new world of Agile HR differs from commonly accepted HR in a number of dimensions: Organization Structure and Roles Competencies Technology Discuss our point of view on Agile HR and provide real-world examples of what that function looks like How to capitalize on the unique opportunity to shape HR of the future towerswatson.com 5 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  6. 6. Why create Agile HR now? Apply lessons learned from the recent economic crisis Continued shift in focus for HR — from transactional/operational to strategic and business-driven partner The prevailing HR model is not equipped to manage these new demands and has not worked as well as intended towerswatson.com 6 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  7. 7. Understanding the requirements of the HR function requires starting with business talent strategies Business Strategy Talent Strategy HR Function and Service Delivery Strategies HR HR Structure HR Talent HR Process Technology Governance, Measurement, PMO and Project Management, Change Management and Communications towerswatson.com 7 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  8. 8. Top HR service delivery issues: Talent management still top Top HR Service Delivery Issues (Top Three Frequency) 42% Talent/performance system 35% 35% Streamline processes/systems 35% More involvement in strategic 27% business-driven issues 23% 22% Define human capital metrics and dashboards 17% 21% Recruiting/staffing services/systems 12% 19% 2010 n = 456 Upgrade HR system 18% 2009 n = 332 18% Cost 24% 17% Compensation/benefit services/systems 12% 16% Manager self-service 16% towerswatson.com 8 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  9. 9. Who’s Been Doing What… Initiatives Undertaken in Last 18 Months Reengineered key HR processes 68% Sought to increase alignment of HR 68% strategy with business strategy Implemented and leveraged 50% self-service Refocused the role of the HR 43% business partners Outsourced activities previously 29% handled internally Sought to increase alignment in the 26% delivery of HR with other SG&A functions Implemented a shared services model 20% Implemented a new HRMS 20% Developed a standard global data 16% architecture for HR data Brought back services previously 9% outsourced to a vendor None of the above 9% towerswatson.com 9 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  10. 10. …And What’s Working (Or Not) Initiatives Undertaken in Last 18 Months — Results Achieved (For Initiatives 76% or More Complete) Sought to increase alignment in the delivery 35% 55% 10% of HR with other SG&A functions Brought back services previously 54% 33% 4% 9% outsourced to a vendor Sought to increase alignment of HR 56% 29% 3% 12% strategy with business strategy Developed a standard global data 35% 48% 4% 13% architecture for HR data n Implemented a shared services model 47% 35% 10% 8% Implemented and leveraged 37% 45% 6% 12% self-service Refocused the role of the HR 47% 33% 5% 15% business partners Reengineered key HR processes 45% 35% 5% 15% Outsourced activities previously 27% 44% 17% 12% handled internally Implemented a new HRMS 30% 35% 22% 13% Above expectations Met expectations Below expectations Too soon to tell towerswatson.com 10 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  11. 11. But HR is still transaction-focused When Managers Initiate HR/Pay Transactions, Remaining Approvals/Reviews Required Manager Approvals HR Generalist/Business Partner Role Average Number HR Administrator/Service of Additional Center Reviews/Verifies Prior Manager to Update Manager Receives Approves Approvals None ↔ Comprehensive Notification Notification Exceptions Approves Event Only 1 2 3 1 2 3 4 5 No Review Only Only All Voluntary 53% 33% 12% 2% 32% 40% 18% 8% 2% 32% 37% 9% 22% termination Involuntary 25% 38% 29% 8% 22% 29% 21% 15% 13% 13% 22% 7% 58% termination Candidate 22% 40% 28% 10% 29% 29% 28% 9% 5% 26% 27% 15% 32% selection Annual salary 15% 40% 31% 14% 30% 29% 28% 9% 4% 28% 24% 18% 30% change Promotion 12% 45% 33% 10% 28% 29% 28% 10% 5% 21% 20% 16% 43% Off-cycle salary 11% 37% 38% 14% 27% 25% 22% 16% 10% 21% 17% 16% 46% change Create a new 11% 34% 35% 20% 29% 23% 26% 12% 10% 23% 22% 8% 47% position towerswatson.com 11 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  12. 12. The prevailing HR model has four components, each of which contributes to an efficient and effective function… HR Centers of Business Expertise Partners HR Leadership Team HR Operations towerswatson.com 12 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  13. 13. …though the model has had its challenges HR Business Do business partners have the capabilities needed: Partners To be credible advisors to the business? To equip line managers with the required skill and will? Do Business Partners forsake the enterprise agenda for local/business agenda? Do Business Partners really collaborate with the rest of HR? Centers of Can the COEs actually provide best practice expertise at a market-competitive price? Expertise Do COEs respond to business need (or do they still operate from their “ivory tower”)? Do COEs build integrated, holistic solutions to business problems (or do they still think in silos)? HR Is there an appropriate balance between cost and quality? Is there enough of a focus on Operations continuous improvement? Do HR Operations still do things that are more appropriately owned by the line and employees (e.g., completion of performance reviews, checking employee licenses are updated)? Do HR Operations have operational excellence, customer focus and vendor management as core competencies? HR How effective is HR Leadership at building a coherent HR agenda for the whole enterprise Leadership and managing to it? Team Is there real cooperation and trust between all parts of the model? Is there sufficient flexibility of HR resources to staff projects effectively (without having captive resources)? towerswatson.com 13 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  14. 14. Imagine the future — Key differences vs. the prevailing HR model Pull vs. push: Intelligent customers who call on appropriate HR support when and how they need it (on-demand) Concentrated: Small, high-level, influential expertise clearly focused on what creates business value Flexible, scalable: Adjustable skill and cost levels can respond to business needs Strategic and proactive: Leading indicators and insights keep HR’s finger on the organization’s pulse towerswatson.com 14 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  15. 15. Key differences between the prevailing model and Agile HR: Organization Structure and Roles Prevailing Organization Structure and Roles Agile HR model Substantial permanent resources Fewer permanent resources Mostly captive Flexible to meet changing business Tend to generate HR push needs COE teams organized around Scalable to meet changing business specialist areas circumstances Responsible and accountable for HR COEs address, and organize around, transactions business issues Neither responsible nor accountable for transactions towerswatson.com 15 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  16. 16. Key differences between the prevailing model and Agile HR: Competencies Prevailing Competencies Agile HR model HR experts who understand business Business experts who understand how to context deliver people solutions Experts in design and implementation Experts in broad change management Focused on designing and implementing and sophisticated workforce analytics great policies and programs Focused on enabling line managers to produce great results towerswatson.com 16 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  17. 17. Key differences between the prevailing model and Agile HR: Governance Prevailing Governance Agile HR model “One size fits all” Tailored services by business and Command and control workforce segment Focus on decision rules Personal authority Prioritization based on best available Focus on decision rules and associated evidence behaviors Prioritization based on demonstrable business value towerswatson.com 17 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  18. 18. Key differences between the prevailing model and Agile HR: Technology Prevailing Technology Agile HR model Transactional, administrative systems Knowledge-based systems and ERP-based collaborative tools Continual license fees and upgrades Software-as-a-Service (SaaS) Use of multiple systems Single “best of breed” platform towerswatson.com 18 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  19. 19. ORG STRUCTURE AND ROLES In the future, HR will be structured differently from prevailing models From To HR responsible for operations, or responsible for Complete accountability for administrative and the oversight of third party administrative transactional work is transferred to a third party, outsourcers another part of the business or to an entirely new function Centers of Expertise are focused on traditional Expert teams are much smaller and designed program design and must work across “silos” to around human capital and business outcomes design and deliver integrated outcomes HR resources are assigned to a specific part of Most HR resources exist in a flexible pool, and the model and are managed vertically against can be deployed horizontally against various specific functional objectives initiatives HR business partners have to balance business Business partners are truly embedded in the and HR demands and are often caught between business, with a strong governance model HR objectives and business objectives addressing multiple priorities HR business partner reporting structure is based on Reporting structure and budget ownership are fluid, political realities and headcount management but are based on what the business is ready to own In an Agile model, HR lets the demand for its services dictate how they develop solutions and deploy resources towerswatson.com 19 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  20. 20. ORG STRUCTURE AND ROLES Org structure and roles Business HR Function “Sister Function” Business Business Business CFO Head of CIO Human Resources COO Business Business Business Partner Partner Partner Head of HR Head of Head of Head of Engagement, Operations People Employee Supervisor of Talent and Leadership/ Function Strategy/Risk Experience Resourcing Workforce Management Management Planning Development and Rewards In-house In-house Contract In-house Contract In-house Contract In-house Expert Expert Expert Expert Expert Expert Expert Expert Business Support Resources Business support resources are pulled in from throughout the organization as needed for HR projects and initiatives towerswatson.com 20 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  21. 21. ORG STRUCTURE AND ROLES Org structure and roles Business Business Business Business Business Business Partner Business Partner Partner Dotted line/solid line reporting relationships change depending on involvement in HR initiatives towerswatson.com 21 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  22. 22. ORG STRUCTURE AND ROLES Org structure and roles HR Function Head of Human Resources Initiative involvement indicated Responsibilities and relative rank by color shift depending on organization Head of Head of Head of Head of People Engagement, Supervisor Talent and Leadership/ Strategy/Risk Employee of Workforce Management Management Experience Resourcing Planning Development and Rewards In-house In-house Contract In-house Contract In-house Contract In-house Expert Expert Expert Expert Expert Expert Expert Expert towerswatson.com 22 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  23. 23. ORG STRUCTURE AND ROLES Org structure and roles “Sister Function” CFO CIO COO HR Operations Function towerswatson.com 23 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  24. 24. ORG STRUCTURE AND ROLES Org structure and roles Business HR Function “Sister Function” Business Business Business CFO Head of CIO Human Resources COO Business Business Business Partner Partner Partner Initiative involvement Responsibilities and relative rank indicated by color shift depending on organization Head of HR Head of Head of Head of Dotted line/solid Engagement, Operations People Employee Supervisor of Talent and Leadership/ Function line reporting Strategy/Risk Resourcing Workforce Management relationships Experience Management Planning Development change and Rewards depending on involvement in HR initiatives In-house In-house Contract In-house Contract In-house Contract In-house Expert Expert Expert Expert Expert Expert Expert Expert Business Support Resources Business support resources are pulled in from throughout the organization as needed for HR projects and initiatives towerswatson.com 24 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  25. 25. ORG STRUCTURE AND ROLES What’s different? Expert Areas (formerly Centers of Expertise) Expert Areas are focused on core HR outcomes that make a difference to the business, rather than the more conventional areas Expert Areas are tightly integrated, developing policies and programs that offer joined up solutions to address business issues, rather than operating in individual process silos There is a heavier reliance on external specialist services — more scalable and cost- competitive than having a standing team There is a pool of flexible resources, who are experts in multiple disciplines and who support business partners with implementation work and special projects Contract experts Will have a good knowledge of the business context and requirements Play an important role in HR governance Deal directly with line leaders (i.e., without intermediaries); nevertheless, as with the prevailing model of the specialist role, they make recommendations — the line leader still decides on and approves recommended course of action towerswatson.com 25 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  26. 26. ORG STRUCTURE AND ROLES What’s different? Business Partners Facilitate, enable and equip line managers to carry out their people management responsibilities Business Partners can have a dotted or a solid line relationship with HR — reflecting the business partner capability and the people management capability of the business line leaders HR Operations are managed and report elsewhere (e.g., in a “sister” function) Operational excellence, customer orientation and vendor management are core competencies There is greater likelihood of getting an appropriate balance between cost and quality towerswatson.com 26 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  27. 27. COMPETENCIES Expectations for HR professionals change in an Agile model Agile HR HR talent working in virtual, cross-functional teams People experts who understand how to deliver business solutions Focus on enabling results achieved by people managers Experts in broad change management Business partners deliver customized HR strategic services to their business Share responsibility for business strategy development and implementation Advanced skills in change management and project management Balance the ability to envision strategic requirements with the discipline to implement realistic human capital solutions for the business How is this different from the prevailing HR model? The focus here moves from theory — knowing what they should do — to practice — actually doing what must be done towerswatson.com 27 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  28. 28. TECHNOLOGY In the future, HR technology will be managed differently from prevailing models From To Expensive in-house hardware and HR software with Cost-effective Software as a Service (Saas) extensive IT support solution(s), configured by HR experts, not IT HR integrates employee data from multiple HR and One global system with web-based manager payroll systems across the globe and creates data dashboards, transaction and modeling capabilities. reports for managers to analyze Reporting that lists masses of data, focuses on Reporting that focuses manager’s attention on key historical information or current snapshots business items/issues; provides meaningful prospective modeling to support business decisions HR drives performance management, workforce Managers own workforce planning, performance planning and succession management through management and succession planning, supported intensive data mining and manual manipulation by integrated, easy-to-use on line tools (e.g., succession planning books) Multiple HR Internets for each business or country Global HR portal with content owned and updated and IT control over content and updates by HR functional experts In an Agile model, HR functional experts configure technology without the need for IT support. Managers access and analyze human capital data without the need for HR administrative support. towerswatson.com 28 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  29. 29. Summing up Progress has been made, but there’s more work to do HR must identify the next HR evolution and form Multinational firms are under pressure to truly globalize their HR function and service delivery HR functions must make the right decisions about structure, talent, governance, technology, roles/types of people needed and implementation Leadership essentials for change Clarity of vision, purpose Discipline, grip, momentum Conviction Patience Courage towerswatson.com 29 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
  30. 30. Questions? Denise LaForte denise.laforte@towerswatson.com James Millar james.millar@towerswatson.com towerswatson.com 30 © 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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