DSE HRT Bootcamp HR business Partner June 2012 1
Agenda 1 2 3 4 The role of the HR Business Partner HR Business Partner the current state Organisational design Lessons learned implementing the HR Business Partner role 2
1. What is HRT? Objectives of HRT projects About 80% of all HRT projects are implemented primarily for cost savings 2 out of 3 HRT projects are implemented with an eye towards standardising processes Filling the gap between HR capabilities and business needs Senior business executives want HR to be more effective Only 4% describe HR as highly effective in addressing the needs of the business 60% describe HR as moderately effective People and HR are often treated separately: People issues are considered strategic HR issues are perceived as administrative HR is often out of the loop on strategic issues. Companies that rarely or never consult their senior HR team on key business issues: Mergers and acquisitions (63%) Compliance and regulation (26%) Talent (25%) 3
The role of the HR business partner
HR Business Partners are a key element of the transformed HR function Shared Services Shared Services respond to employee inquiries and processes HR transactions in order to significantly reduce HR Business Partner and COE involvement in routine administrative tasks and inquiries (e.g., benefits, payroll, data maintenance). A Service Center is a type of Shared Service. Vendor Managers can reside within Shared Services. 5 Business Partner HR Business Partners are dedicated to providing business unit specific strategic and consultative services to executives and line managers related to the people-related issues impacting their business unit. Business Partners broker technical talent (e.g., benefits design, compensation design, organization development) from the COEs to deliver HR solutions. Vendor Manager Vendor Manager is responsible for ensuring that the vendor partner provides contracted activities, measures performance against the SLA and coordinates vendor activity to meet current operational, future capacity and project needs. In addition, the position assists both development and operational teams in implementing application and process related changes and enhancements. Vendor Managers can reside within the COEs, Shared Services or as its own HR Role. Centers of Expertise (COE) COEs are comprised of teams of technical HR experts (e.g., benefits design, compensation design, organization development) who are shared by the business units. COEs provide strategic, design and consultative services to HR Business Partners and assist the HR Service Center in resolving complex issues. Vendor Managers can be within the COEs. Outsourcer The strategic outsourcing of noncore competency functions and/or those that are more efficiently delivered by the third party allows the HR function to improve HR service delivery, while reallocating resources to more value-added activities.
Our clients are consistently asking us for our opinion on HR Business Partners What does the title HR Business Partner? really mean? How many HR Business Partners do we need? Where do I find quality HR Business Partners? Is it possible to develop my people into HR Business Partners? How do I measure the impact of my HR Business Partners? 6
What is an HR Business Partner? Confusion around the role Ask ten people what it means to be an HR Business Partner and you will probably get ten different answers. There are tons of roles, all with the title of HR Business Partner, underpinned by different job profiles and commanding a range of salaries. There is clear variation both in terms of role accountability and expectations. 0 Deloitte Touche Tohmatsu. All rights reserved. 7
Operational and Strategic role One enables the other The business partner role complements a strong operational excellence role Strategic focus Strategy Partner Change Agent Processes People Administrative Expert Employee Champion Operational focus 8
What is business partnership? HR Business Partners are dedicated to providing service line specific strategic and business consultative services to Partners and Directors, aiming at delivering people solutions to business problems. Business Partners broker technical expertise (e.g., compensation & benefits design, organization development, learning management) from the HR Centers Of Excellence to deliver HR solutions To be successful, HR Business Partners must be actively involved in the development and execution of business strategy, moving beyond the play of policy police, regulatory watchdog and provider of administrative HR services. To be successful, HR Business Partners must not only master the basics of HRM, they must also have a deep understanding of business strategies, operations, and requirements. 9
The impact on the business of the different categories of HR Business Partner varies the Strategic Partner has the greatest impact Strategic Partner 33% Impact Operations Manager 11% Impact Emergency Responder 8% Impact Employee Mediator 8% Impact Source: Corporate Leadership Council 11
So what should the Strategic HR Business Partner do? Strategic HR Business Partner will: Operate as an internal business consultant Have significant access to senior executives and help to shape business strategy Build strong credibility at senior levels Understand industry trends and anticipate the impact on the workforce Drive manpower plans based on business strategy 2+ years ahead Have a strong dependency on other HR roles within the Service Delivery Model Be relatively few in number and aligned to profit and loss accountability within the organisation design Examples of Strategic HR Business Partner Projects: Customer Service transformation (supporting movement from product-led to service-led organisation) Analysis of link between employee engagement / absence management and associated costs Talent Management strategy (Exiting Baby- Boom Generation and supporting Generation X&Y) M&A integration Supporting Outsourcing and Offshoring strategies Managing large-scale cost reduction programmes Organisation Design There are currently few successful examples of true Strategic HR Business Partners within industry. Where this function does operate, it is often carried out by the Corporate Strategy team rather than HR. 12 HR Business Partner need to have a deep understanding of the business
Sample: HRBP Process Related Responsibilities Below is a sample HRBP Role profile outlining the process-related activities that a HRBP can be responsible for. Notice that administrative tasks are not within the scope of HRBP role. Process-Related Activities Strategic Staffing Identify and build key talent segments and provide input to workforce plan/staffing model Work with managers to execute workforce plan and strategy Interview candidates as necessary (critical talent and senior level positions) Provide coaching to managers Resource allocation New Hire/Termination Manage business justification Work with outplacement counselors Provide coaching to managers Review and analyze turnover data Learning Identify business needs for learning Provide input on solution development Performance Management Facilitate sessions with leadership to develop and communicate business goals and objectives Drive continuous performance improvement Coach managers on developing appraisals and delivering feedback Resolve performance rating disagreements Provide coaching and guidance to managers on promotions, demotions, and transfers Leadership Development Succession Planning Future state/forecasting talent needs Rewards Meet with leadership to discuss salary guidelines Finalize salary plan/budget Provide consultative guidance and coaching to managers on pay for performance philosophy and implementation Work with managers to resolve disagreements Analysis/differentiation Employee Data Administration N/A Benefits Market benefits programs to employees Time & Attendance N/A Payroll N/A Employee Relations Receive grievances and disciplinary issues (critical talent and senior level positions) Employee Retention Conduct business unit feedback sessions Develop process to cascade findings to the organization Coach managers on communicating feedback Retention plan based on analysis Develop game plan to address issues 14
HR Business Partner the current state
HR still to become a strategic business partner: EMEA A Mercer study revealed that 65% of human resource departments perceive themselves as a strategic partner to their business. However, in reality only 15% of activities carried out by human resource departments across Europe, the Middle East and Africa are related to pure strategic interventions, according to 500 human resource directors surveyed by Mercer. All the directors surveyed believed that HR is a strategic partner because it is an active participant when discussing important business-wide issues. (Benefits & Compensation International, March 1, 2011)
So why can t HR Business Partners be more strategic? The top reasons why HR BPs are not more strategic can be categorized according to Infrastructure, Capabilities and BP Service Delivery Infrastructure Poor data availability to make data driven decisions Poor technology infrastructure and compromised administrative efficiency Limitations of the CoE Limitations of the SSC Challenges of operating internationally Capabilities Capabilities Not enough HR people with the credibility, core competencies (i.e. business acumen) and consulting skills to perform the role Line Manager capability or reluctance to perform the people management role Limited talent pool for the new BP BP Service Delivery HR operating as a Customer Relationship Manager and a broker of specialist HR services Mismatch of HR BP to the business leading to poor line-hr partnerships There is a lack of understanding of the importance of measuring the value of HR interventions / Human Capital and a lack of capability in applying metrics to HR solutions 18
Typical HR Business Partner Challenges Top Reasons HR Business Partners Have Not Fully Delivered on the Strategic Promise of HR The absence of a clear business strategy with which HR can work in the absence of corporate strategy, business partners must understand the value drivers of the business unit The role is insufficiently defined leaving business partners without comprehensive role clarity requires a clear definition of HR business partner roles in conjunction with other parts of HR Line managers do not believe HR has the capability to work with or understand business strategy must deliver and manage HR value proposition and brand The troubled history of relations between HR and the line (e.g. HR still seen by some as the regulators of employment rules) requires real culture change which HR must lead There are not enough HR professionals with the skills and credibility to perform the role the skill set must be bought or built The role does not sufficiently account for true customer requirements (managers may be more likely to want more operational than strategic support) HR needs to educate the business on HR value Line managers are reluctant to perform people management responsibilities and continue to push back their responsibilities to BPs manager scorecards must clearly articulate/measure people management responsibilities Poor technology infrastructure and compromised administrative efficiency continues to require BPs to perform administrative activities remaining admin roles must be removed from BP scope to another party 22
Organisational design
HR Business Partner Benchmarking Organisation No of FTES No of HR BPs FTE ratio Thomson Reuters 50,000 251 1:199 RBS 85,000 333 1:255 Rolls Royce 21,000 65 1:323 ABN Amro 93,000 279 1:333 Prudential 6,500 17 1:391 Orange 11,000 21 1:523 Merrill Lynch 45,000 63 1:714 Lloyds TSB 80,000 92 1:866 24
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