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Evolving role of HR


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HR departments will become more focused on the outcomes of their actions — the effect
of what they do on the corporation versus the effect of what they do on HR.

Published in: Recruiting & HR
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Evolving role of HR

  1. 1. Organizational Modeling Helps Meet New Demands for Headcount Planning and Budgeting Current Challenges in the Workforce Skill shortages, economic flux, competitive pressures, global competition for talent, outsourcing labor, compliance legislation, aging populations — these are just a few of the daunting challenges faced by human resources management today. The Evolving Role of HR A PeopleFluent® White Paper
  2. 2. The Evolving Role of HR | 2 As workforce dynamics grow more complex, the HR professional’s role is shifting from administrative expert to strategic partner. Traditionally administrative processes like tracking employee information and coordinating compensation are now largely automated, which gives HR professionals the opportunity — and responsibility — to play a bigger role. New Demands on HR The role of strategic partner comes with new expectations. Recent studies show that leadership across industries and company sizes share very similar perspectives on the future of HR. CEOs want HR leaders to focus on bigger picture objectives and understand business challenges. Across the board, company leaders express concern that HR management is “disconnected from the real needs of the business” and too focused on tactical application of policies and programs (Human Resources Professionals Association). In other words, the senior HR executive should be “a business person first and an HR leader second.” Understanding the company’s P&L is the key to maintaining a macro-level view of the business. With a broader focus comes a clearer frame of reference for HR initiatives. Experts on HR technology predict that HR departments will launch results-driven campaigns that impact the entire organization. “HR departments will become more focused on the outcomes of their actions — the effect of what they do on the corporation versus the effect of what they do on HR,” predicts Bill Kutik, technology columnist for Human Resource Executive magazine. HR professionals must be prepared to inform decisions by interpreting comprehensive data. Company leadership expects HR to forecast outcomes and provide actionable insight, but only 20 percent of CEOs and managers say they currently get the comprehensive data they need (PWC). The problem is not a lack of data but the inability to gather and integrate it to provide an accurate overall view of the organization. Organizational modeling enables HR professionals to visualize the current organization as a whole and efficiently test and compare multiple what-if headcount planning scenarios to arrive at the best possible decisions. A modeling platform replaces multiple spreadsheets and unsecured documents filled with outdated information with a single, secure workspace integrating the most up-to-date workforce data. HR departments will become more focused on the outcomes of their actions — the effect of what they do on the corporation versus the effect of what they do on HR.
  3. 3. The Evolving Role of HR | 3 Asking “What if...?” in response to different event triggers can mitigate risk, reduce costs and better align decisions to strategies and objectives. With the click of a mouse, HR professionals can see the costs and broad impacts of a potential change for budgeting purposes. HR management should be more connected to financial operations and able to translate HR data into business terms. Collaboration between HR and finance departments is taking many new forms: shared analytics platforms, a growing number of HR chiefs reporting directly to the CFO rather than the CEO and even the position of Chief Resources Officer combining HR and finance functions. In any case, company leaders are looking to both departments to play a bigger role in managing growth (Workday). Modeling and what-if scenario planning can help HR align with the data-driven finance department and facilitate financial justification for HR decisions. “You’re able to communicate the return on investment of your talent initiatives in business terms as opposed to just workforce terms,” says Yvette Cameron, research director for HCM technologies at Gartner. A modeling platform serves as an intersection for HR and finance initiatives, where both departments collaborate on budgeting and headcount planning, internal reorganizations, reductions in force, mergers and acquisitions and long-term strategic workforce planning. The Tool for the Job Modeling offers a single solution for multiple demands. Organizations commonly use modeling in mergers and acquisitions as a single-use tool to preview the impact of various plans before executing a major restructure. Others use workforce scenario planning during annual budget reviews for headcount planning, cost projections and creating new positions. And when launching new locations, business units or other groups of similar style, companies can save time by templating org charts with a modeling platform. Used consistently, modeling allows companies to continually drive profitability. Aberdeen Group found that 89 percent of best-in-class organizations have long-term strategic workforce planning processes in place. While other companies use modeling simply to react to immediate needs, top-performing organizations use it to “look further out on the time horizon” and to “examine alternate futures and multiple scenarios to help guide their near-term and long-term workforce plans.”
  4. 4. The Evolving Role of HR | 4 The benefits of strategic workforce planning are substantial: organizations achieve 51 percent more of their organizational goals within a given year. As for bottom-line benefits, companies that employ workforce planning experience 14 percent year-over-year improvement in revenue (Aberdeen Group). The 6 percent increase in gross profit margin translates into $18.9 million in savings for every $1 billion in revenue (CEB). The Ultimate Goal: Real-Time Insights The rationale behind continual workforce planning is simple: plans become obsolete quickly in today’s business environment. Without real-time data organized by modeling, HR professionals risk being unable to execute a well-planned workforce strategy as intended. “Succession plans can consume weeks of management time only to be discarded as needs change and people move on,” says Kevin Wheeler, founder and director of Future of Talent Institute. “At the beginning of each year and often each quarter, HR managers and recruiters pore over anticipated hiring numbers that inevitably change significantly only days or weeks later. Hiring managers are not certain what they will need or when they will need it, and unannounced mergers and acquisitions invalidate months of work.” To ensure real-time data and quick deployment of technology enhancements, HR managers are now selecting cloud-based platforms almost exclusively (Forrester Research). “The newer systems are designed for a pace of change that the old systems could never imagine would happen, so in addition to superiority of technology, there’s a superiority of functionality that in the end is going to win the day,” says Kutik. Real-time technology capabilities are useless, however, if the data is not accurate. Data quality continues to be a major struggle for HR managers, who need clean master data in order to make sound business decisions. A modeling platform must integrate enterprise-wide data into a master system that can effectively govern quality. Enhancing the Value of HR From major one-time transitions to annual budgeting and headcount planning to continual workforce planning, modeling helps HR professionals address a variety of business challenges. Company leaders expect HR to play a bigger role within the organization — one that focuses on enterprise-wide business objectives, informs decisions with data and collaborates on financial operations. The benefits of strategic workforce planning are substantial: organizations achieve 51 percent more of their organizational goals within a given year.
  5. 5. The Evolving Role of HR | 5 Organizational modeling is invaluable to meeting these new demands. Mapping workforce decisions to business outcomes provides clear and measurable ROI on HR initiatives. And when internal and external changes demand a quick response, management will be prepared. The key is incorporating workforce modeling into the organization as a dynamic, ongoing business process.
  6. 6. About PeopleFluent PeopleFluent, the leading total workforce HCM technology company, redefines Talent Management with an innovative Talent Engagement Cloud that is built around people and not HR processes. By deeply integrating pervasive video, strategic analytics and collaborative social technologies into its complete suite of Talent Management applications, PeopleFluent redefines employee engagement to address productivity loss and diminished financial results due to an increasingly disengaged workforce. With PeopleFluent, companies can change at the speed of business without costly IT interventions through intuitive, highly configurable software that is built upon the right data. Spanning across an organization’s entire global workforce with one talent cloud, PeopleFluent equips leaders with the meaningful talent data and strategic analytics necessary to make better business decisions. PeopleFluent has worked with over 5,100 organizations in 214 countries and territories to engage employees to drive better business results. Today, 80% of the Fortune 100 relies on PeopleFluent as part of their talent management delivery strategy, helping them successfully achieve their talent aspirations. Waltham, Massachusetts 300 Fifth Avenue Waltham, MA 02451 USA Tel: +1-781-530-2000 Raleigh, North Carolina 434 Fayetteville Street, 9th Floor Raleigh, NC 27601 USA Toll-Free: (877) 820-4400 Tel: +1-919-645-2800 London, United Kingdom 15 Fetter Lane London EC4A 1BW United Kingdom Tel: +44 (0) 20 7832 3440 Copyright 2014, PeopleFluent. All rights reserved. This document contains registered trademarks and trademarks of PeopleFluent Holdings Corp. or one of its subsidiaries. All other brand and product names are trademarks or registered trademarks of their respective holders.