Photo by: René Mansi
Responding T oday, the business world faces
enormous change, and HR
professionals must do more than
manage employee terms and conditions.
As the bar has been raised on HR, some
lament that HR professionals cannot meet
these higher expectations and should
be discounted or downsized and its
functions automated or outsourced. We
believe that instead of denigrating HR, we
should upgrade HR professionals and HR
departments to meet the challenges that
HR competencies define what confront contemporary organization.
is expected from those who To respond to the raised bar, we
propose how HR professionals can respond
work in HR and form the basis for to increased challenges. We begin with a
brief synopsis of the business context that
assessment and improvement in raises new expectations of HR, then we
report the results of our research on over
the quality of HR professionals. 10,000 respondents around the world that
defines what HR professionals must know
by Professor Dave Ulrich and Dani Johnson and do to deliver value.
16 september 2007
For HR professionals to
respond to changing
business conditions, they
must demonstrate new
Exhibit 1: HR Competency Model
HR professionals are being asked to develop these competencies in the The new HR competency
help businesses compete, and to do so, fastest and most effective ways. model for round five HRCs
HR professionals must not only observe, 3. Determine how HR competencies To determine the new HR competencies,
but also understand and adapt to these and HR practices align to business the 132 questions about behaviors or
business trends. For HR professionals to performance. knowledge that an HR professional might
respond to changing business conditions, demonstrate were statistically analyzed.
they must demonstrate new competencies. To address these issues for the HR This analysis grouped the questions by
profession, we chose to do a large-scale likeness to yield six distinct competency
HR competencies overview survey (Human Resource Competency domains. These domains are defined with
HR professionals with the right Study, HRCS) of HR professionals and the idea in mind that HR competencies
competencies will perform better. their HR and non-HR associates. This include not just knowledge, ability,
They will be more likely to engage work has resulted in five waves of data and values, but the ability to use this
employees, to serve customers, and to collection (1988, 1992, 1997, 2002, and knowledge. We see HR professionals as
create intangible shareholder wealth. HR now 2007)1. At each “wave” we used needing to know, but more importantly,
competencies define what is expected the same basic methodology for data needing to do what they know. Exhibit 1
from those who work in HR and form the collection based on a 360 methodology. shows the Round 5 HR Competency
basis for assessment and improvement in We sent surveys to HR professionals Model, which is explained further
the quality of HR professionals. (participants) who then gave them to below.
Since 1988, we have been working to their colleagues (associates). These This figure suggests that HR
track the ever-evolving competencies of surveys asked about the competencies and professionals must master competencies
HR professionals. We began our research performance of the HR professional and dealing both with people and business
on competencies with the desire to resolve the performance of the business where the issues (large arrows). In the changing
three issues: HR professional worked. business conditions, HR professionals
1. Define the competencies that add The fifth round of our research has about should serve the organization’s people,
greatest value to key stakeholders. 1,700 HR participants and 8,300 associate communicating care, concern, and
2. Figure out how HR professionals raters in six regions around the world2. compassion for employees. Some
september 2007 17
have called this the human in human 3. Talent manager /Organizational 5. Operational executor
resources. But the business conditions designer The HR professional executes the
also require that HR professionals The HR professional masters theory, operational aspects of managing people
be attuned to customer and investor research, and practice in both talent and organizations. Policies need to be
expectations by making sure that management and organization design. drafted, adapted, and implemented.
strategies are designed and delivered. Talent management focuses on Employees also have many administrative
Following one of these two paths competency requirements and how needs (e.g., to be paid, relocated, hired,
independent of the other leads to failure. individuals enter and move up, across, and trained). HR professionals ensure
Within these two dimensions, we arrayed or out of the organization. Organization that these basic needs are efficiently dealt
six domains of HR competence, dealing design focuses on how a company with through technology, shared services,
with relationships, processes, and embeds capability (for example, and/or outsourcing. This operational work
capabilities. Each competency domain is collaboration) into the structure, of HR ensures credibility if executed
defined further below. processes, and policies that shape how flawlessly and grounded in the consistent
1. Credible activist an organization works. HR professionals application of policies.
The HR professional is both credible ensure that the company’s means of 6. Business ally
(respected, admired, listened to) and talent management and organizational Businesses succeed by setting goals
active (offers a point of view, takes a capabilities are aligned with customer and objectives that respond to external
position, challenges assumptions). Some requirements and strategy, integrated opportunity and threats. HR professionals
have called this HR with an attitude. HR with each other, and working effectively contribute to the success of a business by
professionals who are credible but not and efficiently. HR is not just about knowing the social context or setting in
activists are admired but do not have talent or organization, but also about which their business operates. They also
much impact. Those who are activists the two of them together. Good talent know how the business makes money,
but not credible may have ideas but will without a supporting organization will which we call the value chain of the
not be listened to. not be sustained, and a good organization business (who customers are, why they
2. Culture and change steward will not deliver results without talented buy the company’s products or services).
The HR professional appreciates, individuals with the right competencies Finally, they have a good understanding
articulates, and helps shape a company’s in critical roles. of the parts of the business (finance,
culture. Culture is a pattern of activities 4. Strategy architect marketing, research and development,
more than a single event. Ideally, this The HR professional has a vision for engineering), what they must accomplish
culture starts with clarity around external how the organization can win in the and how they work together, so that they
customer expectations (firm identity future and plays an active part in the can help the business organize to make
or brand) and then translates these establishment of the overall strategy money.
expectations into internal employee and to deliver on this vision. This means
organization behaviors. As stewards of recognizing business trends and their Key findings
culture, HR professionals respect the impact on the business, forecasting Some of the more interesting findings
past culture and also can help to shape potential obstacles to success, and of round five of the Human Resource
a new culture. Additionally, successful facilitating the process of gaining Competency Study are summarized below.
HR professionals facilitate change in strategic clarity. The HR professional • Emerging markets
two ways. First, they help make culture also contributes to the building of The amount of emphasis put on each of
happen. Second, they develop disciplines the overall strategy by linking the the competencies for HR professionals
to make changes happen throughout internal organization to external varies by emerging vs. traditional markets.
the organization. This may include customer expectations. This linkage In emerging markets (India, China), HR
implementation of strategy, projects, or helps make customer-driven business professionals need to pay more attention to
initiatives. They help turn what is known strategies real to the employees of the “Operational Executor” and “Business
into what is done. the company. Ally” skills, whereas in the mature markets
18 september 2007
these items are seen as table stakes or may be out of date. We also found that 2 We are grateful for the support of our global partners
tickets of admission to the partner role. HR departments should build practices • Society for Human Resource Management (SHRM),
• Business impact and activities with an eye to employees a partner in 2002 and 2007, who represented North
Based on other research, management and investors, but they should involve line • IAE, the Management and Business School of
Universidad Austral in Argentina, a partner in 2002
has about 50 per cent inﬂuence on a managers and customers to make things
and 2007, headed by Professor Alejandro Sioli and
ﬁrm’s performance; the other 50 per cent happen. Michel Hermans. IAE represented Latin America.
• Irish Management Institute (IME) headed by Martin
is outside the control of management • HR Organization Farrelly with the assistance of Grace Kearns,
(economic conditions, competitors’ actions, When the HR organization is aligned with representing Europe.
• Tsinghua University in Beijing, China, headed by
etc.)3. HR is a part of the managerial the business strategy and with the business Dr. Xiaoming Zheng and Dr. Felicia Deng.
50 per cent (in addition to choices about organization, higher business results • Australian Human Resource Institute (AHRI) who
worked in Australia and Asia Pacific, headed by Paul
strategy, marketing, manufacturing, follow. Dainty with the assistance of Anne Marie Dolan.
etc). The overall impact of what HR • National HRD Network in India, which focused
on data collection from India headed by Jagdeep
professionals know and do has increased Conclusion Khandpur.
in terms of its impact on business The business context required to succeed
These regional partners took responsibility to identify
performance to roughly 20 per cent. So, the has raised the bar on HR professionals. HR companies in their geographies and were instrumental
in facilitating data collection and analysis. This study
competencies of HR professionals account professionals who would have succeeded is impossible without their collaboration and we are
for roughly 20 per cent of the 50 per cent 30, 20, even 10 years ago would not be as very grateful for their active involvement.
of managerial impact on business results. likely to succeed today. HR professionals 3 McGahan, A. & Porter, M. “How much does industry
• More active role are expected to play new roles, and to be matter, really?” Strategic Management Journal,
18 (Summer special issue): 15-30, 1997.
Increasingly, business demands place able to play those roles, they need new
a higher set of expectations on HR competencies. As a result of the Human Rumelt, R. (1991). “How much does industry
matter?” Strategic Management Journal, 12(3):
professionals. Non-HR professionals want Resource Competency Study, we have a 167-185.
more from HR professionals than ever greater understanding of the competencies
before. needed by HR professionals and agendas
• HR department focus needed by HR departments to impact Professor Dave Ulrich
HR departments have 25 per cent business performance. Cofounder and Principal,
more impact on the performance of the The RBL Group
business than the competencies of the Notes Professor, Ross School of Business
1 The work we have done has been published in University of Michigan
HR professionals. In previous rounds of many places of the last 20 years. A few of those
the study, we encouraged building the publications include:
competencies of individual HR rofessionals; Ulrich, D., Brockbank, W., & Yeung, A. (1990).
“Beyond belief: A benchmark for human resources”.
now we also need to make sure that the HR
Human Resource Management, 28(3): 311-335.
department works well as a function.
Ulrich, D., Brockbank, W., Yeung, A. & Lake, D.
• Stakeholders (1995). “Human resource competencies: An empirical
HR departments need to focus on a mix assessment”. Human Resource Management Journal,
of all stakeholders to have full impact on
the business. We assume (did not test) that Yeung, A., Brockbank, W. & Ulrich, D. (1994).
“Lower cost, higher value: Human resources
in previous years, HR primarily focused function in transition”. Human Resource Planning
on employees and line managers, but we Journal 17(3): 1-16.
found that an equal focus on customers, Brockbank, W. & Ulrich, D. (2003). Competencies
for the new HR. Arlington, VA: Society of Human
investors, and communities affects
business results. It is not enough to have
Brockbank, W. & Ulrich, D. HR Competencies that
talented HR people; we need capable HR make a difference. To appear in Strategic HRM edited
departments. The old adage “I like my by John Storey, Patrick Wright, and Dave Ulrich. To
be published by Routledge.
HR person; I hate my HR department”
september 2007 19
HRCS History of Models
ver the past 20 years, the Human Resource Competency Study has striven to develop these
three areas of HR. Through the years we have seen consistencies—areas of HR that were
important then and continue to be important as HR evolves. We have also seen differences,
and the differences are what we find particularly intriguing. The following is a brief history of the HR
Competency models developed through the years.
HR professionals had a unique set of competencies In 2002, in the fourth round of the study,
that could be tracked around the world (prior to the research team focused not only on
this work, models were within a company or a how competencies impacted individual
small set of firms). This was the first truly global and performance of the HR professional, but the
comprehensive dataset. Competencies required performance of the business as well.
for HR professionals to be seen as high performers The competencies Business Knowledge,
followed the same pattern regardless of position, HR Delivery, and Personal Credibility
industry, or geography: remained important to the performance
• Business Knowledge. Understanding how the business made money and how of HR professionals as well as the business.
resources needed to be organized in order to add to the bottom line has been an Culture and Change were rolled into a new competency domain called
important competency needed by HR professionals from the beginning of the Strategic Contribution, which also included the ability of HR professionals to
Human Resource Competency Study. link HR practices to external customers (referred to in that round as market-
• HR Delivery. HR professionals have the primary responsibility for taking care driven connectivity). Finally, a new factor called HR technology emerged, which
of the human capital within a company. Knowing who to hire, who to promote, encompassed the need for HR professionals to understand technology solutions
how to train, and making sure that systems are in place to pay, administer related to the more transactional portions of their work.
benefits, etc. are all part of this. This round found that Personal Credibility was still a primary predictor of
• Change. The ability of HR professionals to manage change within an individual performance and a secondary predictor of business performance.
organization demonstrated itself to be the most important set of competencies Together, Personal Credibility and Strategic Contribution explained 60 per cent to
by far. 70 per cent of both individual and business performance.
The second round of the Human In 2007, the HRCS
Resource Competency Study was research team
conducted in 1992. In this round, continued to focus
there were several returning on the importance of
companies, as well as a number of competencies as they
new participants. related to individual
Aside from the three and firm performance.
competencies identified in the first round of the Study, the model evolved to include Due to the changes
a fourth called Personal Credibility. Personal Credibility includes items such as being in the past five years in
able to set and meet expectations, and earning the trust of their constituents. HR, this model is more
Additionally, this study found that businesses experiencing low rates of change dynamic. Each of the
and that invested in HR had a significant impact on business performance. six competency domains is a role HR professionals are expected to fulfill. Each factor
under these domains is an action, that when rolled up, make that role effective. Major
highlights from this round include:
• 20% of a business’s success can be attributed to HR professionals.
1997 • Credible Activist emerged as the most impactful competency for both the
The third round of the Human Resource individual and the business.
Competency Study was conducted in 1997. • Talent Manager/Organization Designer, Culture & Change Steward, and Strategy
As with the two previous rounds, yet another Architect showed up as a second tier in importance. With these competencies,
competency was added to the new model. This HR professionals are able to develop organization capabilities that create
competency domain was culture. Data showed competitive advantage.
that the ability to manage culture was an • Operational Executor and Business Ally are table stakes—they do not
important factor in the overall view of HR. differentiate a company or an individual, but knowledge and competency in
This round also found that Business these areas is necessary in order to play.
Knowledge and HR Delivery were lower in
terms of their impact on HR professionals’
individual competency. However, in interviews and follow up, we found that these
competencies were assumed or expected, and therefore did not act as differentiators
for HR professionals.
20 september 2007