2014 The Decade of HR032014

HCI White Paper
March 2014
The
Decade
of HR

The Decade of HR
2 Copyright © 2014 Human Capital Institute. All rights reserved.
by David C. Forman
Chief Learning Officer
Human Capital Institute
In the second decade of the 21st
Century, the spotlight is squarely on the HR
profession. For generations HR, like any function not directly involved in creating,
making and selling products or services, has sought greater recognition and credibility.
Perceptions and attitudes change slowly, but the tide is turning because of an
unlikely source: irrefutable facts and business evidence that HR makes a difference.
Consider the levers that HR influences, if not controls:
Fact: 83% of organizations believe they are losing the war for talent.
Fact: Intangible assets account for the largest share of market valuation for publically
traded companies. Intangible assets are those that involve factors such as
intellectual property, brand strength, network of partners, quality of customers,
management’s ability to implement strategy and the talent of the workforce.
Fact: The biggest single cost of an organization is the cost associated with payroll and
benefit expense. In many organizations this “people” cost is 60 to 70% of all costs.
Fact: Investment in people practices distinguishes leading companies from their
competitors. This finding was advanced by McKinsey in the late 1990s, and
has been corroborated by many others including Towers-Watson, the Boston
Consulting Group, Gallup, Jim Collins and IBM.1 2
Fact: An engaged workforce can contribute to many business results including lower
turnover, higher productivity, revenue growth, improved quality and higher
profits. For example, Jack in the Box restaurants with higher alignment and
The Decade
of HR

The Decade of HR
engagement levels provide 21% lower turnover, 10% higher sales and 30%
higher profits.
Fact: Strong pipelines of talent for leadership and strategic positions lead to better
financial performance, improved customer relationships, and the ability to attract
and retain key talent. Examples of companies that have robust leadership
succession plans in place are GE, McDonalds, Southwest Airlines, PG and
Johnson Johnson.
Fact: Greater collaboration results in improved engagement, innovation and cross-
functional participation. A shining example of such a collaborative company
is the creative design firm IDEO, which was recently profiled in the Harvard
Business Review.3
Fact: Organizations today are exposed to relentless change, and their ability to
respond to this change is perhaps the single biggest determinant of their ability
to succeed. Before organizations can transform and change, their people must
do so first.
Fact: A strong culture is the most effective governance system. Cultures that
emphasize strong social purposes, principles and high performance have
higher engagement levels, better financial performance and stronger talent
brands. In describing her research on these organizations, Kanter labels these
Vanguard Companies.4
The one common element in all of these findings is that people are the primary drivers of
business results. HR’s job is to partner with management to turn people costs into assets
that strengthen the organization, both now and in the future. Just as CEOs turn to the CFO
for financial matters, the VP of sales for revenue accountability and the CIO for technical
resolutions, they must now turn to HR for improving the workforce and workplace.
Breitfelder and Dowling5
talked about their decision to go into HR directly from the
Harvard Business School (as opposed to going to Wall Street, for example). They
said that they had been trained in business school to look for undervalued assets
with great potential; and they consider HR to be just such an asset. It is where the
action is. It is where the greatest results and impact can be achieved, especially for
organizations that value innovation and agility.
It is certainly reasonable to ask: Why now, why the second decade of this century as
the tipping point? Much of the evidence on the impact of talent practices has been
in existence for years, but past perceptions change slowly. The tipping point comes
now because the business results—not opinions or perceptions—are too many and
so compelling. The evidence is simply too great to dispute or disregard. The key to
the new decade of HR is not to wait for more enlightened CEOs, but to seize this
opportunity, develop a bold point of view, and focus on the skills and capabilities
necessary to improve the workplace and workforce so that organizations can be more
productive and successful.
We view human
resources as the
caretaker of the
largest investment
of the company.
If you are not
nurturing that
investment and
making it grow,
you’re not doing
your job.
—Libby Sartain

The Decade of HR
The HR Organization Today
There are many ways that HR can be organized and structured. The size of the
organization is certainly a factor as is the extent of global operations. Regardless of
the structure, there is a movement away from large staffs of HR generalists to stronger
functional skills, improved client services and technologies that lift some administrative
and operational practices from HR. Increasingly, HR is structured around a lean leadership
team, Centers of Excellence, Shared Services platforms and HR Business Partners.
Human Resources
Centers of
Excellence
Self Service
Centers
s-HRBP s-HRBP s-HRBP s-HRBP s-HRBP s-HRBP
Operational Units Geographic Units
Figure 1:
HR Organizational Structure
The Centers of Excellence (COEs) are a cadre of experts in defined areas that are vital
to strengthening the organization. Typically there are COEs in such areas as workforce
planning, analytics, rewards and recognition programs, learning and development, and
career development pathways. The role of the experts in these COEs is to become
very knowledgeable in their field of endeavor, study other organizations, examine
technology alternatives, become familiar with industry benchmarks, and to develop
practices and systems that can be implemented across the organization. The COEs
should point the way, and keep the organization in a leadership position.
Shared Services platforms are designed to provide information and direction to the
workforce through technology so that employees can make decisions themselves.
Shared Services platforms provide many advantages, including making processes
such as benefits administration more efficient, equipping employees with the tools
they need to become more self-sufficient, freeing time for other HR professionals to
become more strategic, and providing analytics on the use and effectiveness of, in this
case, benefits administration. Other HR processes are that are candidates for Shared

The Decade of HR
Services platforms are: recognition programs; payroll administration; personal profiles;
and career planning. Gartner estimates that effective self-service systems can reduce
HR administrative activities by 30 to 50%.5
HR Business Partners are not housed in corporate headquarters but are embedded in
the business units and locations they serve. The HRBP provides the connective tissue
between operational groups and the collection of people practices and technology as
formulated by COEs and Shared Services platforms. The job of the HRBP is to optimize
the business unit in terms of talent practices, be a trusted advisor, solve business
problems, and be accountable for improved outcomes and performance. To underscore
the importance of this role, CLC has found that improving the strategic effectiveness of
HRBPs can result in 21% improvement in employee performance, 26% gains in employee
retention, 7% increase in revenue and 9% improvement in profitability.
The Strategic Role for HR
All of these HR roles are important and provide value, especially when they work in
concert. Shared Service platforms provide others with the opportunity to devote more
focus and time on being strategic. The COEs help to ensure that the organization
is “doing the right things” and will not be implementing substandard practices. But
all of these benefits will be useless unless the business units are more effective in
leveraging and optimizing their talent. Accordingly, the most strategic HR role in 21st
century organizations is the HR Business Partner. This is where strategic intent is
translated into action and where HR has failed in the past. The definition of a strategic
role (as opposed to core or supportive roles) is one that, as the name suggests,
leads directly to the implementation of strategic intent. This is the job of the HRBP: to
improve the workplace and workforce so that the business unit executes its strategy
and is successful.
The HRBP role has not always been viewed as making a strategic contribution. For
many organizations it has been a junior role or proving ground for HR generalists.
Also, the HRBP role has also not been seen as prestigious as being in a COE and
valued as an “expert.” But this is the wrong lens to look through. If you take a business
perspective—not an HR one—what could be more important than helping to make a
business unit more efficient and effective?
The perception of the HRBP role—just like the perception of HR itself—is changing.
Organizations like Accenture are putting senior people in HRBP roles because of the
impact they can have. SAP is rotating senior people in COEs into field partnership
roles. And with stronger Self-service platforms, more focus can be directed to
strategic issues as opposed to operations and administration. There is also growing
recognition that to become a trusted business advisor, more senior-level experiences
and skills are needed. There is a dearth of development programs for HR in general,
and it is time that the strategic role of HR Business Partner receives its fair share of
developmental opportunities.

The Decade of HR
The Key Skills for HRBPs
In order to make the transitions first discussed by David Ulrich (Polite, Police, Partner,
Player), the local business partner must become a trusted advisor who speaks the
language of the business, understands organizational issues and follows through
on commitments.7
HCI surveyed over 12,000 alumni and convened a board of
HRBP advisors to identify the critical skills that HRBPs need to be successful. Three
groupings of capabilities emerged.
Understanding the
Business
Leveraging Talent
Becoming a Consultant
and Implementing
Change
Business Acumen
The Business Impact of
Effective Talent Practices
Consulting Skills
Financial Literacy
The Whole Workforce:
Employee and
Contingent Workers
Taking the Perspective of
Business Unit Leaders
Financial Justification
for HR Initiatives
Building Trust
Implementing Change
and Influencing Others
Analytics
Strengthening
Engagement, Collaboration
and Retention
Creating Compelling
Cases for New Initiatives
Making More Data-driven
Decisions to Leverage
Success and Anticipate
Problems
Strategies for Improving
the Workplace and
Workforce
HR becoming a Partner
and Player
These three groupings are interrelated. For HRBPs to be accepted and successful,
they must understand the business and speak its language. They need to leave HR
jargon and rigid processes behind and become an influential member of the business
unit. These are the “table stakes” to get in the game. Next, because HRBPs are
focused on the people assets of the business unit, there will be ways to improve these
assets and leverage their success. Specific actions that improve the workplace and
workforce will be suggested, but then these have to be implemented. These are the
skills related to Becoming a Consultant and Implementing Change. Influencing Skills
are particularly important in persuading colleagues and partners. All three groupings
are necessary but not sufficient by themselves to enable HRBPs to be successful and
become a trusted, credible business advisor and partner.
Table 1:
Key Skill Group for HRBPs

The Decade of HR
The Challenges Ahead
1. Be Data Driven
It is evidence, not intuition, tradition or convenience that should dictate actions and
business decisions. HR in general, and HRBPs in particular, have been slow to become
as disciplined and systematic as other major contributors to the organization. The
argument goes that data about people are less accessible, objective and valid than
data about production lines, technology cycle times and financial return. Added to
this belief is the perception that HR people are good with words, but not numbers. It
is time to fight these myths with data, models, tools, research and methodologies that
bring just as much rigor to decisions about people as those for tangible assets.
2. Drive Business Outcomes
As David Ulrich has said, HR must add value from the outside in.7
It is about the
strategy and business goals of the organization, not about HR measures or processes.
HR Business Partners must adopt the same agenda as their business leaders, and as
we have seen, people play an enormous part in affecting these outcomes. If HRBPs
are to be seen as credible contributors that add real value, they must think like their
business unit leaders and be accountable for the same outcomes and results. They
need to be concerned with such outcomes as improving revenues, reducing time
to market, enhancing quality and streamlining costs; and not with such HR-centric
measures as cost to hire or number of people trained.
3. Become Coaches
As HRBPs become more accepted, credible and valued, they will be asked to coach
key members of the business unit, whether managers, directors or leaders. This
developmental role is a logical next step in the value that HRBPs can bring to the
organization, and is increasingly important in fast-paced, ever-changing environments
in which new challenges are faced every day. Coaching is not nearly as significant
an intervention in stable, secure times; but these hardly exist anymore, even in the
most seemingly mature businesses. HRBPs will need new skills, tools, experience and
wisdom to be able to achieve this next step in becoming a trusted advisor.
4. Navigate Change
Gary Hamel has said that the single biggest characteristic of our time is the
unrelenting and jarring change faced by organizations of all types and traditions.9
The military first coined the phrase VUCA—volatility, uncertainty, complexity and
ambiguity—to describe the defining characteristic of the world today. While CEOs
talk about disruptive innovation, VUCA and organizational transformation, they seem
to forget that before organizations can change, people must. Since barely 20% of all
change initiatives are successful, there is ample room for improvement, and HRBPs
are the ones that must drive this process at the business unit level. This requires a
deep understanding not just of the rational but emotional aspects of change, and a
rich tool set that is taken from successful change initiatives.
HRBPs will need to work closely with business unit leaders to navigate through
turbulence. CEOs often think in terms of Darwinian logic that survival depends on the

The Decade of HR
fittest, where fittest is perceived to mean “strongest”. But this perception is flawed
because, for example, dinosaurs were quite big and strong, but now are only seen
in animated movies. As Darwin understood, the essential attribute is adaptability, not
strength; and adaptability is about people making changes. Once again, the HRBP role
is vital to navigating through turbulence and helping to create sustained success.
5. Build Meaningful and Sustainable Cultures
Culture is the way decisions are made in organizations. It is what happens when no
one is looking. Culture is certainly leader-driven, but it does not have to be leader
dependent; in fact, a culture so dependent on one personality or presence will likely
not survive. Every organization has a culture; the question is whether this default
culture is what is intended or desired. Some believe that culture is too big, amorphous
and too difficult to change; but increasingly there is ample evidence of organizations
that have taken a very systematic approach to shaping the type of culture that matters
to various constituencies, not just those in the boardroom. Values have become
more than just words on a poster and have been the beacons for making decisions,
attracting talent and creating a new compact with employees.
HRBPs, in conjunction with their business unit leaders, need to shape the context for
a meaningful workplace. These “opt-in” cultures pay tremendous dividends, literally.
Kanter has studied what she calls “vanguard companies” and has determined that they
regularly outperform peer companies that do not have strong values, a meaningful
purpose and who over-rely on rules to guide behavior.
The Time is Now
This is the Decade of HR, only if we make it so. The business results are clear
and unambiguous: it is the people processes that distinguish great from average
organizations. It is easy to replicate the tangible assets of an organization; it is very,
very difficult to mimic culture and people practices. These are the things that matter
to enduring success, and we know this because the business evidence is too great
to continue to ignore. HR needs to get over its inferiority complex, stop apologizing
and seize the opportunity. We need to focus on the strategic role of the HRBP and
realize that all the strategy and great thinking will go for naught unless it works at the
business unit level. We need to develop HRBPs and equip them for success. And we
need to develop an attitude and a bold point of view so that we are not just partners
but leaders in moving our organizations forward. Turn on the spotlight; it is time to shine.
“I came to see in
my time at IBM
that culture isn’t
one aspect of the
game; it is the
game.”
Lou Gerstner,
former CEO, IBM

The Decade of HR
NOTES
1. Michaels, E., Handfield-Jones, H. and Axelrod, B. (2001). The War for Talent.
Boston, Massachusetts: Harvard Business School Press.
2. Benett, A. (2013). The Talent Mandate. New York, New York: Palgrave
McMillan.
3. Amabile, T., Fisher, C. and Pillemar, J. (2014). “IDEO’s Culture of Helping,”
Harvard Business Review, January-February, 2014.
4. Kanter, R. (2009). Supercorp. New York, New York: Crown Business.
5. Breitfelder, M. and Dowling, D. (2008). “Why Did We Ever Go Into HR?”
Harvard Business Review, July 2008.
6. Bersin, J. (2013). Predictions for 2014. Bersin by Deloitte. Deloitte
Development, LLC.
7. Ulrich, D. and Broadbank, W. (2005). The HR Value Proposition. Boston,
Massachusetts: Harvard Business School Press.
8. Ulrich, D. and Ulrich, W. (2010). The Why of Work. New York, New York:
McGraw Hill.
9. Hamel, G. (2007). The Future of Management. Boston, Massachusetts: The
Harvard Business School Press.

The Decade of HR
About the Author
David Forman joined HCI in 2005, and currently serves as Chief Learning Officer.
As CLO, Mr. Forman is responsible for curriculum design, development of HCI’s
certification and designation programs, and serves as a liaison to HCI’s academic
and learning communities worldwide. Prior to HCI, Mr. Forman designed, developed
and implemented technology-based training solutions for leading organizations,
including IBM, Federal Express, DuPont, Deloitte Touche, Exxon, Microsoft, the
Ford Foundation, the Children’s Television Workshop, Sony and ATT. Mr. Forman has
written over 40 articles and books in the fields of human capital, globalization, training,
evaluation, return on investment (ROI), and instructional design; and is a frequent
presenter at major industry conferences and seminars, both in the United States and
abroad. He is also the principal author and developer of the Global Learning System
for the Society for Human Resource Management (SHRM).

HCI is the global association for strategic talent
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for Strategic Talent Management

2014 The Decade of HR032014

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