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The State of HR Business Partnership

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Senior HR Leaders weigh in on the state of HR Business Partnership. A study of 18 HR leaders who attended AJO's HR Leader Exchange in Sept 2018. The survey was conducted in July/August and results were presented during the meeting by Steve Safier, AJO's EVP, Strategy & Impact. Visit ajoconnor.com for a three part series on this subject. (Keyword search: HR Business Partner.)

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The State of HR Business Partnership

  1. 1. THE STATE OF HR BUSINESS PARTNERSHIP OPENING UP THE LENS Human Resources Leadership Exchange (HRLE) September 14, 2018
  2. 2. ABOUT THE STUDY © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 2  Gather feedback on the state of HR Business Partnership from members senior HR Leaders who participate in AJO’s HR Leader Exchange (HRLE)  Discussion topic at HRLE conference in Sept 2018  Total number of participating companies: 18 representing all sizes  Cross-section of of NJ/tri-state industries Employees # >100 2 100-999 6 1000-4999 6 5000+ 4 Survey results should be used as “directional” vs “statistically reliable benchmarks.”
  3. 3. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 3 Q: HR, like most teams these days, are asked to “do more with less.” Is this true of your organization? 100% Responded Yes!
  4. 4. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 4 Q: HR, like most teams these days, are asked to “do more with less.” Is this true of your organization? HR Leaders weigh in:  “In every way imaginable.”  “Work 6 days per week to stay even with expectations; little time to think.”  “Less resources to connect to all people managers in the organization.”  “We have to be creative in what staff we have and what they do - is it value add?”  “Automate, outsource or stop doing things that are administrative or non value add.”
  5. 5. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 5 HR Leaders define the term, “Strategic HR Business Partner”  “HRBP understands and aligns business needs with HR support and solutions to move the business ahead in a VUCA environment.”  “Effectively influences organizational transformation through analytics and decision-making in the areas of leadership, talent management, development, talent acquisition, succession planning, change management, work force planning, organization development and design, performance management, employee engagement and relations, communications and all aspects of employment.”  “Partnership in building company strategy, determining organizational capability (Including individual talent) needed to meet strategy and enabling delivery against this through targeted programs.”  “Trusted HR Expert sought after to provide guidance and input to both leaders and employees.”
  6. 6. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 6 How do you define the term, “Strategic HR Business Partner?” What does Strategic vs Transactional mean?
  7. 7. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 7 How do you define the term, “Strategic HR Business Partner?” • Activities vs Outcomes • Programs vs Solutions • People vs Business
  8. 8. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 8 How critical do you believe it is for HR to be viewed as a strategic partner by: 94% 78% 72% 100% 6% 22% 22% 6% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Your CEO? Your Org. Peers? Other Mgmt Levels? You? To a Very Great Extent To a Great Extent To Some Extent
  9. 9. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 9 To what extent do people in your organization actually view HR as a strategic partner? 33% 33% 17% 39%44% 28% 28% 33% 22% 33% 39% 29% 6% 17% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Your CEO Your Org. Peers Other Mgmt Levels You To a Very Great Extent To a Great Extent To Some Extent To a Little Extent
  10. 10. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 10 Can you provide 1-2 (brief) examples of when a CEO has recognized and communicated HR’s strategic value?  “The CEO has always communicated HR’s strategic value.”  “Examples of organizational change, leadership strategies and diversity were all communicated by the CEO.”  “CEO has on multiple occasions in… global town halls talked about the strategic importance of our culture strategy and the great work the HR team has done to support that.”  “HR growth as company has grown.”  “Performance reviews.”
  11. 11. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 11 Rank order the perception of HR by your CEO vs: 7% 53% 13% 27% 33% 40% 53% 60% 60% 7% 33% 13% 0% 20% 40% 60% 80% 100% 120% Finance IT Marketing Legal HR Higher Equivalent HR Lower
  12. 12. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 12 Have you been able to measure outcomes of strategic HR value added?
  13. 13.  “Success transfers & placements of employees… Zero legal actions out of 600+ employees.”  “Leveraging metrics in areas such as Key Talent, diversity metrics (# of hires, terms, promos, lateral moves).”  “Employee engagement scores and the connection to willingness to stay with an organization and/or willingness to refer others to the organization.”  “Successful acquisition decisions strengthened company culture (employee survey) Stock growth.” © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 13 Please describe example(s) of strategic value HR has provided over the past 3 years.
  14. 14. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 14 Comparisons: To what extent do people in your organization actually view HR as a strategic partner? 33% 33% 17% 39%44% 28% 28% 33% 22% 33% 39% 29% 6% 17% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Your CEO Your Org. Peers Other Mgmt Levels You To a Very Great Extent To a Great Extent To Some Extent To a Little Extent
  15. 15. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 15 Do any of your answers to the above question differ by level within HR?
  16. 16. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 16 Why does HR’s perception decrease as we go lower in the organization?
  17. 17. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 17 Why does HR’s perception decrease as we go lower in the organization?  “I believe the higher level, the more belief of being a strategic partner.”  “Level provides exposure; Lack of exposure does not provide the associate with the opportunity to influence or realize the impact of their work.”  “The HR generalist or specialist was not considered strategic.”  “The generalist role is more tactical in nature and supports all vs. specific leader.”
  18. 18. THE HR TEAM FEEDBACK © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 18
  19. 19. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 19 To what extent do the following HR team members in your organization believe themselves to be strategic partners? 6% 13% 56% 13%13% 38% 13% 6% 13% 31% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% “Client-Facing” roles (e.g. HRBP, HR Generalist, etc.) “Centers of Expertise” (e.g. Compensation, Talent Management, Recruiting, etc.) To a Very Great Extent To a Great Extent To Some Extent To a Little Extent Unsure/Don’t Know 57%
  20. 20. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 20 How does your organization distinguish among HR generalist roles? By: 67% 33% 33% 47% 40% 33% 47% 67% 53% 60% 0% 20% 40% 60% 80% 100% 120% Level of “internal customer” supported? Size of internal customer? Number of businesses supported? Complexity of internal customer’s business? Size of geography? Yes No
  21. 21. HR TEAM DEVELOPMENT FEEDBACK © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 21
  22. 22. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 22 Does your organization have a defined HR career ladder?
  23. 23. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 23 Does your organization have an HR Competency Model?
  24. 24. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 24 Has the HR Competency Model been valuable? Note: Only 4 responded to this question. 15 skipped
  25. 25. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 25 Have you tried to formally build HR Business Partner Skills in your organization?
  26. 26.  Business savvy, financial analysis/business data analytics  Strategic planner/thinker  HR technical skills i.e. basic employment law, compensation administration, performance management  Influencing skills, listening skills, communication - written/verbal,  Leadership and employee development strategies  Coaching and political astuteness  Collaboration; Partnership © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 26 What knowledge, skills and or behaviors do you believe are important for providing strategic HR value?
  27. 27. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 27 To what extent has the HR Business Partner skill-building effort produced positive outcomes? Very Great Extent, 6% Great Extent, 44%Some Extent, 19% Little Extent, 6% Not Applicable, 25%
  28. 28. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 28 To what extent has the HR business partner skill- building effort produced positive outcomes?  “To some extent, through training (business acumen); strategy sessions; introduction/training on change models; consultative skills; examples of courage in HR, etc.”  “I have used it [HR Competency Model] to assess current HR managers by those competencies and developed a plan with them to increase their ability to partner with the business. Drive the role away from the very tactical aspects.”  “Not yet.”  “Purchased upgraded talent.”  “I have hired HR staff with a higher skill set than what the business is ready to use.”
  29. 29. HR TEAM COLLABORATION FEEDBACK © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 29
  30. 30. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 30 To what extent do the different parts of your HR organization support each other?
  31. 31. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 31 To what extent do the different parts of your HR organization support each other?  “In my experience, COE’s (Talent mgmt, compensation, payroll) support the business unit HR business partners. All levels support each other.”  “Often times our centers of excellence are unclear as to the HRBP role. At times, the HRBP is concerned about stepping on toes of the shared services functions.”  “That COE's had no or little visibility at the business level - was not good.”
  32. 32. HR TECHNOLOGY FEEDBACK © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 32
  33. 33. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 33 Has your company implemented HR technology over the past 5 years? Has the HR technology outcome been successful? 81% 72% 19% 31% 0% 20% 40% 60% 80% 100% 120% Q25: Implemented Technology? Q26: Successful Outcome? Yes No
  34. 34.  “Technology is leveraged by organization/colleagues and seen as a tool to move the business forward.”  “Easier to find and access certain data.”  “We now have data that we can use to assist the business in making more informed HC decisions.”  “HR out of data admin. Employee and Manager can see real time data and make changes.”  “Learning can be done anytime versus instructor led.” © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 34 Has the HR technology been successful?
  35. 35.  “No.”  “No but has forced us to really rethink processes and controls - what do we really need? - and simplify our processes.”  “Yes, can sometimes be viewed as pushing more work directly to manager/employee as self serve, further move HR away from being a resource to employee.” © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 35 Has there been any downside to the move towards technology?
  36. 36. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 36 Has HR technology freed up the HR Generalist to be more strategic?
  37. 37. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 37 AJO Hypothesis  “HR has become more strategic.”  “HR provides greater contribution than in the past.”  “Perception AND Reality.”  “We still have a ways to go.” And, the opportunity exists beyond the CHRO!
  38. 38.  Our business colleagues have more interactions with the HR team than with the CHRO – More touch points – More immediacy  HR Generalists have mixed (uneven) capability  The biggest gains will be had from improving HR Generalist capability © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 38 The State of HR Business Partnership - It’s time to expand our focus!
  39. 39. AJO HR TEAM DEVELOPMENT PROCESS © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 39 Business Strategy HR Strategy HR Org. Design HR Process HR Team Behavior HR Competency  HR Programming  HR Solutions
  40. 40. HR DATA ANALYTICS FEEDBACK © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 40
  41. 41. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 41 To what extent does your organization use HR data analytics? 6% 19% 25% 37% 6% 6% Very Great Extent Great Extent Some Extent Little Extent Not At All Don't Know/Unsure 0% 5% 10% 15% 20% 25% 30% 35% 40%
  42. 42.  “Basic levels. Only reports on turnover, time to hire.”  “Lagging indicators only, turnover, census data and time to fill.”  “Effectiveness measures (New Hire Survey, program survey, etc.) Efficiency measures (CPH, TTF, etc.)”  “L&D, Key Talent movement, development planning.”  “Employee Ratings vs Company performance High Potential/High Performers growth.” © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 42 To what extent does your organization use HR data analytics?
  43. 43. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 43 Has the use of HR data analytics changed over time?
  44. 44. © 2018 A.J. O’Connor Associates HRLE Conference - Sept 14th, 2018 44 “HR is seen by leadership in my organization as data driven.” 0% 12% 50% 12% 25% Very Great Extent Great Extent Some Extent Little Extent Not At All 0% 10% 20% 30% 40% 50% 60%

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