Reinventing Human Resources Departments

Like many of us today I spend my share of time on social media sites like LinkedIn, Digg, Facebook and others.

LinkedIn particularly I find to be a great forum for exchanging ideas, asking and answering questions and just "chatting" with colleagues. One of the things I find disappointing is that I still see frequently on LinkedIn are questions like:

• What sucks the most about your HR department?
• Does your HR department bring any value added to your organization
• How as an HR professional do I generate respect and credibility?

I have been in and around the HR profession for over thirty years and even though I have "progressed" to C level roles both in human resources and operating departments it pains me to hear discussion I heard when I was graduating from college and my advisor pleaded with me not to "waste" my talent in Personnel.

As recently as yesterday I was with a colleague in a related field who lamented that when he attends local SHRM meetings the discussion is mostly defensive or compliance oriented rather than discussing solutions or being proactive.

Human Resources needs to re-define itself and the timing is no more critical than today.

A recent article I read made a statement I agree with whole heartedly and have been preaching for the last 36 months or more:

Employee engagement and retention are emerging as two of the biggest challenges facing business in the next decade!

Because of the economic downturn many C level executives are doing what they have always done during times of economic uncertainty; focusing on the numbers. They assume because of high unemployment that employees are just grateful to be employed or replacement talent is readily available. This is both horribly wrong and short term thinking for a number of reasons:

• Recent studies find employee satisfaction is at one of its lowest points in 50 years!
• The U.S. economy is estimated to be operating at a 30% rate of efficiency with further erosion occurring because of loss of trust stemming from layoffs and economic insecurity.
• Employee turnover is estimated to cost the U.S. economy $5 trillion annually
• The costs of "presenteeism"; employees who are employed, but largely un-engaged is estimated at another $200 billion annually.

That's right, those numbers are trillion with a "t" and billion with a "b". One could conjecture that fixing these issues could fund a national health care initiative and probably go along way to solve funding issues in education, poverty and other areas.

So what can HR professionals and departments do to help address these issues and increase their stature and contribution, I would submit several things:

Change your role

I expected my HR teams to provide three primary services to our internal clients: technical expertise, facilitation, and project management. Our role is to provide the right tools to management to select, motivate, and retain the right staff. They are responsible to learn and use those tools. I don't expect managers to be experts in ERISA or COBRA, but basic competencies like setting expectations, giving feedback, taking corrective action, and linking individual goals to organizational goals are management competencies, not HR competencies.

Develop and implement an employment brand

Engagement starts with the hiring and selection process. Organizations that achieve excellence are clear about their brand internally and externally. Candidates and employees know what the organization stands for in terms of values and vision. They may be flexible about process, but they are ruthless about adherence to those values and principles.

Create a pipeline

Great HR organizations are constantly monitoring their "pipeline" of talent. They are proactive not reactive. If turnover or growth occurs they have strategies in place to quickly identify and deploy the right talent. They don't scramble.

Integrate your systems

I am old enough to remember when the total quality movement was "new". You didn't inspect quality in, you built it in. So many times I see organizations approach their HR initiatives serially; we will work on our recruiting system this year, compensation next year, performance management next year, etc. It doesn't work. These systems must be integrated and more importantly they must link clearly and directly to your business strategy.

Foster and cultivate a culture of innovation

You are either moving forward or you are regressing. Great companies don't follow best practices, they create them. They don't wait for the competition to come up with the next idea, they constantly challenge their own thinking and reinvent themselves. I personally ascribe to that model by doing some of the following:

• Hiring the "right" people
• Creating an optimal environment
• Managing "whole" people
• Moving from compliance to "commitment"

If you want to know why I encourage you to do these things right now, here are my reasons:

• Demand for talent- over the next 15 years the demand for “experienced” talent will increase by 25% and the supply is expected to decrease by 15%!
• Less than 30% of organizations worldwide have an engagement strategy today. Do you want to lead or follow?
• Engaged employees have a turnover rate 51% lower than un-engaged employees and a per capita productivity rate 18% higher.
• I guess my last reason would be that if you are an HR professional aren't you tired of sitting in the cheap seats? This is our time, it is up to us to take it.

Personal Accountability

This has always been an interesting topic to me. Some of the events of the last few weeks ranging from athletes punching one another out to kids returning to school seems to make it particularly relevant.

A colleague and I were discussing this topic the other day especially as it pertains to health care. Isn't it interesting for all the debate about whether there should be single payer, a public option, how much it will cost, etc. there is little discussion about the individuals role in the whole health care discussion other than as a beneficiary.

I have some pretty strong opinions on this topic. Among them I believe that all Americans should have access to a basic level of health care much like public education and that until we provide that the costs will never really be managed.

I also believe that individuals have a right and responsibility to participate in the management of their own well being and health. We don't talk about that very much. I would venture to say that the majority of Americans who have health insurance are also covered by a group plan- employer, government agency, association, etc. so they have little understanding of how much their health care actually costs and care less until it impacts them in the way of increased co- insurance, higher deductibles, denied claims, or related activities.

I have mentioned a couple of other related concepts regarding health care like our inefficient delivery and focus on the costs of processes rather than paying for outcome based management, but this is a different issue.

I remember years ago when a new employer arrived in town and declared a tobacco free workplace. People were outraged. How interesting? An employer who took the position that if you knowingly contributed to the detriment of your own health they didn't care to subsidize your real or potential higher expenses so they wouldn't hire you.

We tried to pass a law recently requiring all restaurants to post calorie counts for everything on their menu, luckily it failed. Would we want to extend that to homes like the dram shop laws?

Dram shop laws extend liability to private individuals for serving intoxicated people or allowing them to depart your home intoxicated without at least attempting to intervene. Can you see requiring a menu with calorie counts at dinner parties?

I think a big part of the issue is that of personal competency. Personal competency is that "other" right that constitution provides us with in addition to the concept of personal property.

When we began to industrialize and people left the "farm" many went to work for large employers. Large employers responding to both collective bargaining and offering competitive compensation began offering "fringe benefits" including paid time off, retirement and pension plans, and group health insurance benefits. A few years ago it was not atypical for employers to pay all the costs for health insurance for employees and their dependents. Employees had no idea and didn't care what they cost. Add these third party payer systems to advance health care techniques, technology, and a few other things and we created a trillion dollar health insurance industry, and very high expectations.

Very few employers to my knowledge even today talk extensively with their employees about ways they can contribute to lowering health care costs. The idea of "mandated" health screening, enforced wellness, and sliding employer contribution rates based on lifestyle health care costs would probably be seen as some type of corporate fascism. Your employer shouldn't be able to tell you how to manage you lifestyle, right? Even if they pick up the majority of the cost....

I believe until we address the personal accountability issue and employers
actively engage and educate their employees about the root causes of many of the costs we will only be addressing part of the problem. What do you think?

So You Want To Be A Leader?

This is actually the topic of a presentation that I used to do for our local Chamber of Commerce leadership development program as the last chapter of an eight month development program. Our intent was to send them out with both a sense of empowerment and accountability to something larger than themselves and their companies.

I among others have had the opportunity to discuss and debate what differentiates leadership and management on the "pages" of this blog, linkedin, and a number of other venues as have thousands of others smarter than me.

I ran across a summary of an interview with Robert Dolan, Dean of the Ross School of Business at the University of Michigan, on BNET that I think summarized it it more succinctly than I have ever seen or heard before. He stated, "a manager maintains the status quo and delivers profitability, a leader performs three essential functions-

• they develop and encourage great talent merely with their presence
• they see new opportunities and innovations and push the organization to pursue them
• they act as a moral compass for the organization and role model the appropriate adoption of the organizational values and principles."

We can argue for decades about all of the other characteristics and attributes, but what I really like about Dolan's point is that they describe action and doing rather than passivity.

I found this summary especially timely because I hear the media and others starting to declare that the recession is "over". It is over because the stock market is moving up and large corporations are starting to declare profits again. I guess the fact that they expect unemployment to remain in double digits for the foreseeable future and that we have a health care crisis represents a rounding error. Not to me.

I like to think of myself as a realistic optimist. I was hoping that the recession would serve as kind of a national wake up call on a number of key societal issues. As anyone who has read my blog, my book, or other publications knows I am a big fan of engagement, true engagement. That is a system where stakeholders align in a common purpose. Studies show that organizations who adopt and maintain engagement strategies outperform their competitors in every key dimension. I was hoping the recession would cause more organizations to recognize that engagement is not only necessary, it is good for business.

I still remain hopeful that the "end" of the recession doesn't mean we think we have solved the health care issue. We have a very expensive system that delivers health care inefficiently and with pretty poor outcomes.

I am also a fan of personal competency. Getting away from the corporate and governmental codependency that has dominated our economic model for the last several generations. Employees need to be given an opportunity to engage and in return they need to be educated and expected to play a role in decisions about their health, their long term economic security, and generally be financially literate.

Much of the debate around leadership is whether leaders are born or "taught". Is it a series of characteristics or traits or is it behavior? I kind of like the behavior model. If you have capacity and you don't do anything with it are you really a leader? I think that is similar to the point Malcolm Gladwell made in Outliers, a high IQ in and of itself is no guarantee of spectacular success either personally or professionally, you must apply it.

When I look at where we got to and how we got there I have to tell you I see a lot more people in business and government who are managers- protecting the status quo and profitability; than leaders, individuals who develop deep talent, challenge their organizations to innovate, and act as moral compasses and role models not only internally, but externally.

Even the debate over health care represents an interesting model; we recognize it is compromised, but we seem (at least our "leadership") to embrace significant change in a model that doesn't work in delivering against key performance measurements.

I heard earlier this week that the performance bonuses paid out by the major financial institutions exceeded their recorded profits. Am I the only one who missed the logic of that decision?

How can we declare the recession is ending with record unemployment?

So for me I like Professor Dolan's definition of leadership. To his three characteristics I would add two more of my own:

• Come to work every day prepared to be fired for doing the right thing.
• Think about your "legacy", what you leave behind more than your "career", what you take with you.

It would appear to me that if you choose leadership rather than management as defined by Dr. Dolan you might not find the field nearly as crowded. What do you think?