Defining the Role of the HR Business Partner

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1 THE RBL INSTITUTE MINI FORUM WHITE PAPER SERIES JULY 2014 Defining the Role of the HR Business Partner Jayne Pauga & Joe Grochowski Participating Members: Frances Hemming Meek ADIA Crystal Lannaman BASF Chris Sena & Kelly Wilson Cardinal Health Chad Taylor Dell Dawn Black Intel Tammy Winnie Kellogg s Erica Dudley M&G Investments Charlie Burns Rio Tinto Stefan Seiler UBS HR professionals as business partners have unique information, insights, and recommendations to deliver competitive advantage. The HR Business Partner model has existed for many decades when effective staff support functions, including HR, have contributed to business results. Formalizing how HR professionals may create more value as business partners has been of increased interest among our Institute members in recent years. Often viewed by companies as co-pilots of business units, HR Business Partners (HRBPs) must demonstrate a high level of competence in order to adapt to changing customer, company and/or business unit changes. As business partners, HR professionals help their organizations define and deliver organization capabilities that add value to employees and line managers inside the organization and to customers, investors, and communities outside the organization. Key Questions Addressed 1. What are the key competencies and behaviors required to be a successful HR Business Partner (HRBP) in your organization? What do you expect your HRBPs to know and do to create value for the business? 2. How do you help your HR Business Partners focus on strategic work and reduce time spent on foundational/transactional work? The Six Competencies that Matter Most The RBL Group has spent the last 25 years studying the competencies of HR professionals and how these competencies affect the perceived effectiveness of HR professionals and business performance. Since 1987, RBL has collected data from over 60,000 HR professionals and line managers providing the most comprehensive empirical view of HR competence. The most recent study, conducted in 2012 in partnership with the Ross School of Business at the University of Michigan and regional partners across the globe, has identified six competency domains to be an effective HR professional (refer to Figure 1). In the recent round of our competency research, we found that effective HR professionals function in six roles: 1. Credible activists earn a reputation for business value through their consistent delivery and proactive stance on business and HR issues. 2. Strategy positioners who go beyond knowing the business to being able to position the business to win. 3. Capability builders who create aligned and sustainable cultures that shape the right organizational identity. 4. Change champions who are able to both initiate and sustain change at the individual, initiative, and institutional levels. 5. HR innovators and integrators who design and deliver solution-focused HR practices. 6. Technology proponents who use information to improve decision-making. Information captures a wide range of

2 Figure 1: The Six Competency Domains current trends: the cloud, big data, analytics, workforce planning, metrics, scorecard, and so forth. Behind each of these information trends is the fundamental capability of leveraging information for competitive advantage both within HR and within the entire organization. As a capability, information is less about data and more about decision-making; less about information and more about insight and impact. HR needs to be very clear about what choices can be made to help an organization win through talent, leadership, and culture, then define choices and collect data to make informed choices. HR should also build the capability within the larger organization to gather, import, bundle, share, and utilize information in ways that create information asymmetries between their organizations and their competitors. Strategic Positioner: Interpreting the global business environment Decoding customer expectations Co-crafting a strategic agenda Credible Activist: Earning trust through results Influencing and relating to others Improving through self awareness Shaping the HR profession Capability Builder: Capitalizing organizational capability Aligning strategy, culture, practices, and behavior Create a meaningful work environment Change Champions: Initiating change Sustaining change HR Innovator and Integrator: Optimizing human capital through workforce planning and analytics Developing talent Shaping organization and communication practices Driving performance Building a leadership brand Technology Proponent: Improving utility of HR operations Connecting people through technology Leveraging social media tools 2

3 The RBL Group asserts that HR competencies do not exist for their own sake. Rather, HR competencies exist to enhance business performance. A major problem with most competency models is that they ask the question, What are the competencies of HR professionals? This is the wrong question. The question should be, What are the competencies of HR professionals that have the greatest impact on business performance? Our statistical analysis of our data over the past 25 years has addressed both of these questions in detail. HR Business Partners Being a business partner may be achieved in many HR job categories. HR professionals generally work in one of four positions in a company. 1. Corporate HR: As business partners, corporate HR professionals define corporate wide initiatives, represent the company to external stakeholders, meet the unique demands of senior (and visible) leaders, leverage cross unit synergy, and govern the HR function. 2. Embedded HR: As business partners, embedded HR professionals work as HR generalists within organization units (business, function, or geographic). They collaborate with line leaders to help shape the business strategy, conduct organizational diagnoses to determine which capabilities are most critical, design and deliver HR practices to accomplish strategy. 3. HR specialists: As business partners, HR specialists work in centers of expertise where they provide insights on HR issues such as staffing, leadership development, rewards, communication, organization development, benefits, and so forth and they advise business leaders and HR professionals on how to turn insights into impact. 4. Service centers: As business partners, HR professionals who work in service centers add value by building or managing technology-based e-hr systems, processing benefit claims and payrolls and answering employee queries. These individuals may work inside or outside the company. A common oversight is to solely define the embedded HR generalists as HR Business Partners, undervaluing the other critical roles of HR professionals. RBL Institute Member Examples All companies represented on the call define the competencies required to be an effective HR Business Partner. A number of firms on the call use RBL s HR competency model as the basis to define the competencies required of their HR Business Partners. Here are some examples of how companies on the call define the competencies to be a successful HR professional in their respective organizations: ADIA: Each client group (i.e., each asset class) at ADIA has dedicated HR resources in a relatively new centralized HR function. The HR members dedicated to each client group include: Organizational Development professionals (e.g., organization design, structure, culture), Talent Management professionals (people development, developing nationals), and an HR Generalist (with a focus on recruitment and compensation). They are all dedicated HR resources for ADIA s client groups, but it is not a dedicated HR structure. For example, OD or Talent Management professionals may be working with three to four departments. ADIA is working to get HR more embedded into the client groups. BASF: BASF uses a competency model similar to RBL s competency model with foundational expectations set around business acumen and personal credibility. Managerial courage is key as the competencies are lived through their consulting, change management, organizational effectiveness, or even organizational design and development. HRBPs needs to embody managerial courage to challenge the status quo, manage conflict effectively, and drive innovation. BASF expects their HRBPs to be more innovative so that HR can find new ways to support and drive the business. This requires HRBP s to think from the outside-in (the ability to translate the larger business context and key stakeholders of BASF and add value to the business by delivering the talent, leadership, and capabilities to succeed). Cardinal Health: Cardinal Health also uses RBL s competency model and has a number of initiatives underway to build out those competencies. For example, their Impact Program is designed to build HR capability around the six RBL competency domains and includes meetings with about 20 HR VPs to discuss the competencies and how to emulate them. Cardinal Health s HR function is strong in the area of HR Innovation & Integration. They are currently focusing on developing their HRBPs to move into a true Strategic Positioner role, which will require a better understanding of current business challenges and how to add value given the strategy and key stakeholders. Cardinal Health is also extremely effective at executing on a strategy and making things happen. But as with many large organizations, finding the truth on strategy is sometimes a challenge for HRBPs because the sheer number of vertical business units, interfaces, and horizontal projects makes it hard to get absolute clarity on the true corporate strategy. Two areas where Cardinal Health is evolving the competency model include: Analytics: Being able to provide their business partners with insights upfront. They have a lot of data, but it is diverse and dispersed. M&A Capability: Given the amount of M&A activity in their business, HR is working with business partners to do cultural assessment as part of M&A due diligence. Dell: Dell has a large COE that handles transactional HR activities. They have a staffing organization (posting jobs, sourcing talent, etc.), a compensation team (partners with HRBPs on transactional analysis), a large HR operations and employee relations team (regulations, investigations, etc.). Dell also has a small group of global HRBPs that work across 4 global business units. The role of the HRBP at Dell is to work with senior leaders to solve their business challenges. For example, Dell s HRBPs help business leaders with the change management, talent development, technologies, and the right talent required to compete and win. HR Business Partners at Dell: Have to build relationships across cultures Have to have exceptional networking skills Help leaders identify top talent Help leaders with development for succession plans Enable leaders to leverage technology (HR self-service, HR analytics) Dell is in the process of defining an HR business partner model. What is the lifecycle of an HRBP? A lot of Dell s HRBPs are coming from their COEs. But there are higher-level expectations for the HRBP role. Dell looks at three areas: 1) foundational strengths (e.g., manage initiatives), 2) the ability to identify emergent issues (e.g., anticipating issues on the horizon, knowing the financials of the business, using 3

4 data to identify trends), and 3) the ability to bring in new thinking (e.g., executing on areas where leadership may be uncomfortable and pushing leaders when needed). Dell knows that if HR wants to be ahead of the curve they need to be edgy (what RBL refers to as HR with an attitude ) and be in front. Intel: Intel is in the process of centralizing HR to support global business units. Like others on the call, they have COEs for transactional HR work. Intel s HRBPs have to: know the business, build relationships, have problem solving skills (use data), be good listeners, and be owners so the business leaders will go to them. They also have to be able to identify gaps, anticipate, advise and coach leaders, and influence leaders. Kellogg s: Kellogg s developed its own HR competency model, using the RBL competency model as a source of input. Competencies of current emphasis for HR are: talent management (e.g., identifying current talent, developing talent, and identifying future business needs), change management, organizational effectiveness, analytics (getting HR comfortable with using data to provide insights), culture and engagement, and business partnering. HRBPs have to have the foundational functional skills, but they also have to be effective strategic HR planners, coaches, and have the business acumen to anticipate and address emerging business needs. M&G: The competencies and behaviors expected of HRBPs at M&G emphasize commercial understanding of the business and market context. Additionally, the financial services industry is heavily regulated so M&G s HR professionals need a risk and compliance mindset. They also have to be able to build strong client relationships, demonstrating influencing skills, credibility, and effective communication, to become trusted and sought out advisors to clients. HRBPs are expected to maintain their technical skills, deliver BAU and projects, and role model positive behaviors such as team work both internally and in external interactions. Rio Tinto: Rio Tinto is currently defining the HRBP role using its existing competency framework. They have mapped the HRBP competency profile to the RBL HR competency model and find it aligns well. Some current areas of emphasis are around: business acumen, workforce productivity, leveraging analytics, stakeholder engagement, and driving change. HRBPs at Rio Tinto have to be able to diagnose the needs of the business and then proactively offer solutions. How HRBPs position and communicate solutions is essential given there are always competing business priorities. Having conversations to get buy-in is paramount. HRBPs also foster teamwork and collaboration with shared services and COEs to broker the work and make sure they work together to deliver solutions to the business. UBS: UBS is currently focused on making their HR structure, which includes COEs, service centers, and HRBPs, more efficient. There are three key objectives to make the model more efficient: Position HRBPs as strategic partners and change agents, not only as managers of HR processes. Build relationships with business leaders and within HR. HRBPs have to build internal relationships with those that help them deliver solutions to clients. HRBPs have to understand the strategy and then be able to provide strategic consulting advice to leaders on culture and the people strategy. The key competencies for UBS HRBPs include: Commercial and business acumen The ability to work systemically Assertiveness: confidence, taking the initiative, and being proactive (not reactive) to the business leader s issues (more akin to a professional advisor to the leader). Be more influential: have an impact based on good analysis and strong reflections. Like others, managing the many internal and external interfaces of HRBPs is a challenge. UBS is working to help manage the level of interfaces. Reducing the Transactional Work for HR Business Partners Companies will continue to require fewer HR professionals to do transactional administrative work. Newly emerging information and communication technologies will continue to be applied to improve the efficiency of HR administrative work such as payroll, benefits administration, entry-level staffing, and employee record keeping. Some HR activities will be centralized to reduce redundancies, to optimize natural synergies, and to leverage economies of scale. As companies continually grapple with the challenges of focusing on the most important wealth creating activities of the firm, it will undoubtedly be the case some nice-to-have but strategically unnecessary HR activities will be eliminated. (Dave Ulrich and Wayne Brockbank) The intent of the business partner model is to help HR professionals to integrate more thoroughly into business processes and to align their day-to day work with business outcomes. The goal is to get HRBPs focusing more on deliverables (what the business requires to win) than doables (what HR activities occur). RBL Institute Member Examples ADIA: In ADIA s client team model, HR generalists interface between the client team (OD, Talent Management) and the departments as well. HR generalists have access to all the HR specialist functions. The emphasis at ADIA is more about making the connections (right HR resources and experts) to have a solution implemented. Transactional work is sent to HR experts. BASF: BASF is currently working on an assessment of HRBPs to determine the work they are currently doing and identifying work that can move to the service center. The HRBPs spend their time on the needs of the business first (the roadmap) and then the people agenda required to deliver on the roadmap. BASF encourages their HRBPs to say no to activities for the sake of activities or a laundry list of needs versus identifying those key actions that will drive the biggest return in-line with the business direction. As BASF s SVP of HR likes to say, If business leaders don t get upset with you, you re not doing your job. Cardinal Health: At Cardinal Health, the focus is less on transactions and more on outcomes (an outcomes orientation). For example, before they think about performance reviews, they think about how it impacts the business. The goal is to shift the mindset from the event to the outcome (e.g., cost savings, growth). As a part of their Impact Program, HR conducts an environment scan of the organization to help define the organization capabilities for the businesses. Dell: Dell s HR function is asking management to leverage more HR self-service on their upgraded platform with new search features. If leaders don t use the self-service platform, 4

5 they can submit a case to the HR operations team, which provides information on what the leader needs for posting a job, the performance review forms, etc. (transactional HR work). Dell is enabling business leaders to use more HR self-service tools to reduce the time the HRBP teams spend on transactional work. Like many other organizations, the challenge is defining roles and responsibilities and what work goes belongs in the COEs and what is handled by the HRBPs. Dell is working to help their new HRBPs be more comfortable with letting go of the transactional work. The focus in the business units is to activate the HRBP team to focus on what the customer views as most important. Intel: The COEs at Intel encourage the business leaders to use self-service so they don t go directly to HRBPs for the answers. The message is to try to get the answer from the CEOs before you go to HRBPs. At the end of the day, Intel is trying to get more time spent on identifying business problems (before the tactical issues). M&G: HR sits on the Board and relevant information is shared to encourage the whole team to focus on commercial issues. The team are also actively involved in projects to improve the efficiency of processes/quality of data, etc. Excellent training is available to HR to increase skills, business knowledge, and challenge ways of thinking. Training for line managers also aims to increase skills and reduce over-reliance on HR for basic day-today issues. HR team resources are monitored to ensure they continue to match the business need, especially given high levels of business growth. HR generalists and specialist teams all liaise directly with the business, giving clients access to specialist support. Rio Tinto: At Rio Tinto the key enablers of balancing the strategic and tactical work are clear governance and service level agreements. HRBPs are client facing but can get dragged into work that should be done via the shared services function. Clear governance, service level agreements, and escalation points are essential to drive accountability and ensure services issues are addressed through the appropriate channels. Rio Tinto does not want leaders to use HRBPs as a complaint department. Kellogg s: Kellogg s has a shared services organization (service center), COEs, and HRBPs. Employees and managers are encouraged to use the self-service tools for transactional HR before sending requests to the shared services organization. Because much of the transactional HR work is centralized in the shared services organization, Kellogg s is enabling their HRBPs to stop doing the transactional work. Kellogg s is in the process of a new transformation to introduce a global business services model across IT, Supply Chain, Finance, and HR. The project includes a task analysis of how HR professionals are spending their time. Kellogg s is setting expectations with business leaders early in the project -- in order for HRBPs to spend their time advancing the strategic business priorities of the business, they will no longer be able to provide the level of personal transactional support that still consumes their time. UBS: UBS has a 2-day development program around their four competencies for all 150 HRBPs across the world. Their development programs emphasize relationship building and opportunities to interact (e.g., visiting COEs, informal breakfast gatherings). UBS is currently thinking about the best way to assess the quality of their HRBPs. Concluding Thoughts HR professionals as business partners have unique information, insights, and recommendations to deliver competitive advantage. In formal and informal business discussions, each staff group brings unique insights to drive business results: finance talks about economic performance with information about revenues, costs, and financial returns; marketing discusses customers with recommendations on targeting key customers, customer response (e.g., net promoter score), and customer connection; operations makes recommendations and systems, quality, and supply chain. When HR partners in these strategy discussions, we propose that they provide insight, information, and recommendations on: Talent: HR professionals are centrally involved in providing the right people with the right skills in the right job at the right time. Talent insights capture future competence as well as commitment and contribution. Leadership: HR professionals help prepare not just key individual leaders, but the collection leadership throughout the organization. They ensure that leaders have the knowledge, skills, and abilities to meet future demands. Organization Capabilities: HR professionals partner with line managers to identify and create organization capabilities such as speed to market, innovation, leadership, risk, collaboration, information leverage, accountability, and fast change. These capabilities (sometimes called culture, processes, or systems) become the identity and personality of the organization. As business partners, HR professionals provide analytics, insights, and recommendations on talent, leadership, and capability to deliver business results. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or using any information storage or retrieval system, for any purpose without the express written permission of The RBL Group.

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