The eight hot HR issues for 2005-2007

As we scoured the world to bring you the latest in strategic HR thinking, we came across an outstanding interview with leading management guru David Ulrich. In the interview, conducted recently by the Conference Board of Canada, David emphasised that the 21st century will belong to those with good human resources and organisational capabilities. The reason for this is simple: For the first time in the history of management, it is the human mind that is the primary creator of value.

The quality of people and their level of engagement will be critical factors in corporate health and survival. So how will HR executives deliver? They will reduce the time they devote to administrative duties. By dealing with on-going issues such as rewards, benefits, pensions, and labour relations, good HR executives will forge a greater alignment between the HR function and the strategic objectives of the organisation. In Ulrich’s view, the following eight strategic issues will dominate HR minds for the next two years

Building your leadership pipeline is a must:
When it comes to succession planning, many organisations still argue that “they will cross that bridge when they come to it.” But identifying and grooming successors is critical. The most successful global organisations, such as General Electric, 3M and P & G, engage in systematic succession planning to ensure a seamless transition. These organisations believe in having a slate of high-potential leaders.

Leadership must be dispersed:
The complexity and uncertainty in today’s business environment demands a high degree of quickness and adaptiveness in organisations. This can come only with a new definition of leadership. Organisations must focus on leadership as a role rather than a function. Individuals within an organisation must be called upon to exercise leadership within their areas of influence. All high-performing organisations foster a culture that encourages individuals to exercise leadership. Over the next few years, HR leaders will focus on creating an organisational culture that demands leadership of all employees.

Employment branding gets you the talent you seek:
No market is more competitive than the market for employees. The war for talent is fierce and is likely to become more so with the massive numbers of employees retiring in the next five years. Top organisations are moving beyond the vanilla “employer of choice” concept to a more rigorous strategy of attracting and retaining the right employees through “branding.” 3M’s focus on innovation, for instance, creates an employment brand that attracts innovators from the available talent pool. In a tight labour market, a weak employment brand identity can present a brick wall for even the most creative hiring and retention strategies.

Organisations must capture a bigger portion of the employee mindshare:
Hiring top talent is one thing; keeping talent and getting its full engagement is another. Talent is mobile. Organisations must also capture a bigger portion of the employee mindshare. Research shows that employees operate, at best, at about 60 per cent efficiency despite a whole host of programs designed to enhance engagement. Companies’ strategies to gain employee commitment are often flawed and ineffective. For instance, pay raises may be a great short-term motivator, but motivational theory research shows that money satisfies only to a certain extent. After that, people look for meaning in their lives.

Organisational capacity must exceed the rate of change:
Change in the knowledge economy is non-linear. Its complexity and speed causes tremendous unpredictability. The organisation that will thrive in this environment is one in which the rate of learning exceeds the rate of change. Competitive edge has shifted from the product and the technology to more than just “people.” Competition today is between the processes different organisations use to ensure that their employees are trained and up-to-date. In high-performing organisations such as GE and Pepsico, in which CEOs personally drive the learning agenda, learning cascades down throughout.

Get ready for a heterogeneous workforce:
Recent immigration patterns have sharply internationalised our labour force. This, combined with the fact that baby boomers will soon retire at a predictable high rate, means that our workforce will comprise a higher proportion of visible minorities. In this context, valuing diversity takes on a new urgency. Diversity must move beyond being a purely intellectual exercise to becoming an inherent organisational value. Some companies have already begun investing heavily in formally ingraining diversity into their culture. Organisations that don’t follow suit will be unable to fully maximise the talents of their entire staff.

Line managers must communicate effectively with employees:
Research shows that the major weakness in organisations is communication. Line managers, who tend to focus on bottom-line results, often need reminders about the importance of ongoing communication with staff. Employees’ levels of motivation are dependent on how well line managers communicate. It’s not about sending numerous e-mails; it is about effective face-to-face communication. When the going gets tough, effective communication is key. It can make all the difference between a motivated staff with a positive attitude and an unmotivated, disgruntled group of people.

Measurement leads to credibility:
With increasing investment in human resources management, it is only natural that boards and CEOs demand HR to show returns on investment. The HR function will be called upon to create meaningful measures of HR performance. Traditional HR measures focus on activities (eg, the time it takes to hire people, the number of individuals who have taken training programs). But senior management will no longer accept such measures from a function that is so critically important for organisational excellence. HR executives will need to show they are building organisational capabilities. As Ulrich said in his interview with the Conference Board, “rather than measuring the number of people hired, we should focus on the quality of people hired. How well do they help the organisation innovate, change, and deliver other capabilities?"