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Current HR Operating Models are not fit for the future.  The implementation of the Ulrich model in the 1990s was driven by changes in technology, the need to demonstrate value for money, development of the HR Services landscape and a focus on more HR Strategy.  Ulrich’s research was built on trends which were transforming the IT and Finance sector at the time; including shared services, outsourcing,  manager self-service, and ERP technology enablement.  The ultimate goal was to spend a higher proportion of HR resources on delivering HR Strategy, and less on HR administration.

The Ulrich model delivered some benefits, but patchy implementation gave mixed results.  So after all the effort, the question remains – why is HR no more strategic now than in 1995?

 

The HR Business Partner (BP) role was introduced as a strategic partner and account manager for HR Services, however there have been challenges with the timing of the introduction of the role.  Launching BPs before HR Shared Service Centres have started leaves them with an impossible task of balancing transactional workload with the strategic expectations of customers.  In my experience of training BPs, I observed the ‘rule of thirds’ in larger organisations; a third are excellent, a third would be excellent with time and development, and a third will never be ‘strategic’ BPs.     The Business Partner is stuck between a rock and a hard place in a mismatch of expectations. 

In my view the great promise of HR ERP Technology has not delivered. Most organisations do not have one interconnected system for HR records, Recruitment, Learning, Payroll, Compensation Management, Succession Planning tools and Performance Management.  Many multi-million dollar transformation initiatives, based on HR Technology, have not delivered their goals, been late or over budget damaging the credibility of HR to transform organisations. 

HR has built a set of specialist functions that work well in silos, for example in Talent, Learning, Reward, Recruitment, Employee Relations, but don’t often work together as a whole to deliver HR Strategy.  There is evidence that we are not spending a higher proportion of our time on delivering HR Strategy as we did in the 1990s, from research carried out by Professor Edward Lawler of the University of Southern California. We have not made progress in improving the productivity of managers through enabling self-service tools. According to Towers Watson, 56% of organisations now require HR to approve transactions, which was certainly not the original vision of the Ulrich model.

The Ulrich model was developed from external drivers relevant in the 1990s but we now have a different set of drivers in place, and should re-evaluate our current structures.  Now is a good time to review our HR Operating Model, with over 50% of organisations with more than 5,000 employees in the process of re-organising their HR department, from bringing in a new leadership team to redesigning HR services from the bottom-up. 

 

Technological innovation has provided big changes in the workforce.  It has also provided more opportunities to deliver better HR Services to a mobile, and more global, workforce.  McKinsey estimate that the automation of knowledge work will have an economic impact of $5-7 trillion dollars, displacing workers with technology.  Workforce changes mean we have high youth unemployment in some areas, a jobless recovery, an ageing workforce that will need to work into its 60s and 70s and localised skill shortages, for example in science and engineering.  The demand for talent is constant.

So where do we locate our businesses in an economy with high unemployment? Do we need a core set of employees on permanent contracts and flexible contractors who provide the right skills at the right time? Which employee services can we deliver through mobile devices?

HR is becoming increasingly fragmented and hived off into HR Services and specialist advice.  There is a growing need for more HR Strategy, yet there is less capability to deliver it.  There is a demand for support to transform organisations, yet HR has struggled with the change management, technology deployment and Organisation Design required to transform itself.  The HR Services market is moving every quarter with new entrants, mergers and acquisitions.  New skills are required in analytics, influencing behaviour change, vendor management and procurement, and for HR to be workforce technology ‘evangelists’.

So what can we do?  We can learn from the experiences of implementing the Ulrich model, but challenge parts of the model that are no longer applicable. 

1. Understand the changes in your workforce now and in the future, and assess the likely impact on your organisation

2. Challenge current and future HR skills you have and will need in the future

3. Review technology innovations and partner with organisations that have a passion for improving workforce productivity

By focusing on the journey and not the end destination, you can move towards a HR model that will provide the HR Strategy glue enabling you to adapt and respond to future drivers of change. 

Join in the discussion on HR Transformer Blog or at the Tucana HR Change and Transformation 2013 Conference where Andy Spence is delivering his keynote speech on Future Trends in HR Operating Models.

 

 

By Mike Loginov, CEO, Ascot Barclay Group and co-founder, Executive Risk Magazine

Certified Chief Information Security Officer and cyber security advisor to the UK Government, Department for Work and Pensions, G4S, Vodafone and the Metropolitan Police, among many others

Workshop leader – Cyber Security: The Essential Role of HR on 24 September, part of HR Change & Transformation 2013, London

 

Cyber Security in HR – Who Cares?

Every senior manager in every UK organisation, as far as we’re concerned. According to the National Audit Office, the UK is 20 years away from having the skills required to improve cyber security. So when it comes to individual companies, HR should be highly involved in ensuring that employees have the knowledge and abilities to prevent cyber crime.

There’s really no getting away from the risks that cyber insecurity can create. 91% of UK businesses and 73% of households have internet access, which makes them potential targets for cyber criminals. If you think ‘well, it won’t happen to us’, consider the following statistics produced by the Government:

  • Cyber crime costs UK businesses £21 billion each year, with £9.2 billion lost through intellectual property theft
  • Espionage accounts for £7.6 billion, with companies involved in tendering activities and large volumes of financial transactions being particularly vulnerable
  • Online theft costs £1.3 billion, with financial services, construction, support services and the voluntary sector being targeted
  • Large companies are susceptible to losing customer data, which costs £1 billion each year.

And don’t think that cyber criminals always target the big boys. The Federation of Small Businesses reports that 41% of its members were victims of cyber crime in the last year; common problems were viruses, hacking and security breaches.

Why HR Should Care More

So we’ve established that cyber crime could be coming to a portal near you. If you work in HR, you could be forgiven for thinking that cyber security is a technical issue that’s best left to the IT experts. However, it’s essential that everyone in HR understands that an IT system is only as good as the people who use it.

That means every employee who emails data, processes information or uses work smartphones, tablets or laptops within their jobs is part of the problem and solution. A staff member who is ignorant of safe IT working practices is a risk whom cyber criminals will target. A staff member who is cyber crime savvy is an asset in preventing anything untoward happening.

If you ask any expert in the cyber security field about the best ways to combat criminal activity, they will all include the provision of training and awareness sessions to employees. Enter the HR function, which can devise the appropriate training and development opportunities for its organisation.

Here’s a useful checklist that HR can adopt when recommending a programme of upskilling in cyber security to the executive team:

  • Research the risk to your specific organisation.  Quantifying it in monetary terms always grabs more attention than theoretical concepts.
  • Identify which employees need to be trained at which levels. If you don’t know where to start, a cyber security cultural audit should steer you in the right direction. Ascot Barclay Group offers this assessment free to qualifying organisations.
  • Devise an appropriate training programme that covers the gaps. This should encompass general awareness sessions through to specialist qualifications such as Ascot Barclay Group’s Cyber Security Awareness Certification Programme for IT Professionals. From there, it will be possible to cost the training and compare it with the potential losses involved in doing nothing.
  • Check that existing policies and procedures are robust enough. If they don’t specify problem behaviour in relation to IT, they should be revised and reinforced. A YouGov survey suggested that as much as 25% of people transfer work files between office and home so it’s up to HR to clarify what behaviour is and isn’t acceptable.
  • Include refresher information within the action plan. While it’s easy for bad habits to return after a certain period of time, timely reminders should help to keep employees on track.
  • Support the IT department to make the IT policy a live one that is discussed at team meetings and between managers. For example, employees are notorious for selecting easy passwords or even sharing passwords when they shouldn’t so the policy should be as specific as possible on actions that will put the organisation at risk.
  • Work in conjunction with the IT department to determine who should be able to see what on the system. User access is an important part of cyber security, and it’s worth spending time on creating protocols that state which roles can view and edit within each section.
  • Develop protocols that support employees to report suspicious emails, policy breaching behaviour and weaknesses in the system. Staff should know exactly how and to whom they should speak and they should be confident that their concerns will be treated seriously – even if they come to nothing in the end.

The only department that is able to deliver on such a checklist is HR. In terms of who should care about cyber crime, it’s clear that HR must make its prevention a staff development priority.

Mike Loginov FRSA C|CISO

CEO, Ascot Barclay Group

www.ascotbarclay.com

Cyber Security: The Essential Role of HR (workshop, 24 September 2013, London)

… part of HR Change & Transformation 2013

Download the brochureVisit the website

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 By Dr JT Kostman, Global Leader of Human Capital Analytics at AIG and speaker in the ‘Metrics & Analytics’ stream at HR Change & Transformation 2013, 26 September, London

It turns out that in business, as in life, Darwin was right. Those organisms best able to adapt to their circumstances are the only ones destined to survive.

As the world becomes increasingly complex, and the resources needed to ensure survival become ever scarcer, species have a tendency to divide along preordained lines. Some adapt, thrive, and survive – while others simply go the way of the Woolly Mammoth. Large, lumbering, and unable to accommodate to a new way of life, the unfortunate non-adapters wallow for a short time in antiquated obsolescence, and then… poof. On to the next species. History simply turns the page.

Over the past hundred years or so, the Human Resource profession (as it is called in its current incarnation) has undergone more changes than most organizational functions. From humble beginnings as a part of Payroll at the inception of the Industrial Revolution, Labor Relations took center stage in response to increased unionization in the 1930’s, while the birth of Personnel Departments coincided with increased opportunities for employee exploitation in the 1940’s. It was nearly 1950 before the American Society for Personnel Administration (ASPA) gave way to the Society for Human Resource Managementand those 28 founding fathers began to sound the clarion call for a newly formed “profession” that should claim its “rightful seat at the table.” Despite a brief blip from the Positive Psychology folks at the beginning of the extant century (in efforts to cash in on the Maslovian notion of Eupsychian Management, and its modern incarnation, Employee Engagement), that is where things have stood – with one notable additional wrinkle.

Sometime in the 1970’s (no one remembers exactly when; we were distracted by dangling disco balls, powerful pharmaceuticals, and polyester suits), the corporate world was beset by the PC Police; and Political Correctness, in all its ignominy, found its home – guess where – in HR. With corporations reeling from the social salvation brought about by Civil Rights Movements, Feminism, and Fair Employment Legislation,  companies were finally being brought to heel and made to account for their historical inequitable treatment of… well, everyone; with the possible exception of the middle-aged well-educated white males who held every position of economic worth. In capitulating to this overdue shift in attitudes, the Titans of Industry did what they do best; they threw money at the problem, closed their collective eyes, and hoped it would go away.

HR Departments, it was decreed, should serve as ex officio ombudsman for the exploited masses yearning to be free – while keeping the peasants as far from the corporate castle walls as practical. While the resultant democratization of opportunities proved to have a positive impact on most areas of organizational life, in HR itself, the pendulum seems to have swung too far afield.

HR, let us agree, has perhaps the most crucial charge of any function in a modern economy. When the means of production, profit, and perpetuation of the organization shift from land to labor, people are the indisputable profit drivers. Whether the product is a product, knowledge, or service, the sole strategic differentiator in most modern organizations rests with the skill and will of the workforce. So if HR services have become so crucial, what are the reasons – as Fast Company deputy editor Keith Hammonds offered in a 2005 cover story – Why We Hate HR.

While Hammonds’ article still bears re-reading (despite countless panel discussions, the profession still seems to have not heard his message), there is an additional reason for the increasingly institutionalized contempt for Human Resources that Hammonds failed to cite, and which many of our colleagues have failed to consider: The revolution of evolution.

Every corporate function that has proven its continued worth has eventually matured to realize a degree of specialization; an ability to blend with business needs to occasion a sort of managerial meiosis. Consider the bifurcations that have been occasioned within most of the critical corporate functions: Payroll spawned a complement in Finance; Sales begat Marketing; Technology gave rise to Analytics; and the spinoff of the CEO’s operational responsibilities found a much needed home under the auspices of the COO. In a similar vein, it is long past time for HR as a profession to introspect and examine what it does well – and divest itself of its complement.

While the increased egalitarianism that has come to pervade most modern organizations has made an indisputably positive contribution, the increased maternalization of the HR function in many organizations has left them with little more than cloisters of nattering nannies that bear a disturbing resemblance to a perpetual episode of The View. With a seeming self-anointed charter to infantilize employees, tell everyone to eat their vegetables and not run with scissors, and cluck knowingly at the “children” in their charge, many HR Departments have lost sight of their raison d’être; to serve as facilitators for effecting profits through people.

While this trend has become increasingly prevalent in organizations that have succumbed to ad infinitum meetings of the HR equivalent of the Red Hat Society®, there are those who have resisted institutional emasculation and are increasingly coming to embrace their role as true stewards of Corporate Human Capital.

The Corporate Leadership Council recently reported on a growing contingent of CEOs and Senior Executives in the most forward-thinking organizations who have “seen the light”; supplementing the transactional necessities of traditional HR with the transcendent and transformational capabilities of metrics and analyses via Human Capital Analytics (HCA). Organizations in every sector – from Financial Services and Pharmaceuticals, to Consumer Products and the Public Sector – are increasingly following the lucrative lead of thought-leaders at companies like Google, who now ensure that, “All people decisions . . . are based on data and analytics.”

While the transition from the traditional perspective of policing, punishing, intuiting and assuming, gives way to the transformational tools of science, analyses, and understanding, there will no-doubt be holdouts.  As Upton Sinclair once offered, “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” But as CEOs and Senior Executives increasingly come to recognize the extraordinary benefits that come from a rigorous approach to Human Capital Analytics, the jig may be up for those HR Departments that stubbornly cling to the past – and inevitably become extinct.

 

JT Kostman PhD, July 2013

Speaking at HR Change & Transformation 2013, London – download the full brochure

Dr. JT Kostman is an Industrial & Organizational Psychologist, Mathematician, and Data Scientist. He recently served as Global Leader of Human Capital Analytics for AIG – that is, until he saw the light…

Image  —  Posted: 30 July 2013 in Metrics & Analytics
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Guest article by Anita Lettink, VP Northern Europe, NorthgateArinso
Keynote speaker at HR Change & Transformation 2013, 25-26 September, London – www.tucana-uk.com

20130606-210257.jpgThat’s the conclusion you might arrive at if you’ve followed HR Technology publications in the last year or so. Ever since Workday came onto the market, SAP bought SuccessFactors, Oracle acquired Taleo and SalesForce introduced Work.com, there’s been a lot of emphasis on the fact that HR in the 21st century must be build on cloud – and HR ERP is dead.

It seems that only HR is hit by this “strictly cloud” virus. I haven’t observed it (yet) in other business areas, where ERP still has a lot of klout. So what’s going on, and why is it happening to HR?

I’m a bit old school – where I come from, when we need new functionality, we create an overview of functional requirements first, technology requirements second. And we look closely at what we already have and how to create a solution that adds value. We don’t start with: it must be cloud.

Besides, many companies, subject to complex labour agreements and local regulations, have invested heavily in systems that are tailored to their needs. They are not ready to rip and replace that investment. In parts of the world, like Europe, there are many HR factors that influence payroll on a monthly base which means your HR solution must support all of that. And of course, all those rules and regulations change frequently, so your vendor better have a good support and maintenance system in place that aids in being compliant.

So I am proposing a more balanced view: yes, HR in the cloud can be great, and yes, HR ERP has its benefits too. It all depends on what you need, and on what you already have (invested in). In fact, a hybrid might bring you the best value for money by protecting previous investments while adding new HR services.

After all, this is HR we are talking about – absolutely necessary but certainly not an area where your employees should spend most of their time in awe of the system. Let’s be reasonable: an HR solution must work, it must be reliable and flawless and that’s about it.

Cloud or ERP for HR: The Fundamentals

The first post in this summer series on the state of HR Cloud and HR ERP looks at the basics.

When I talk to clients about choosing between Cloud and ERP for HR, there are many questions that need to be answered, but the fundamental choice follows from the answers to these three questions:

1. How standard do you want to be/can you be?

2. Can you do without legacy processes & data?

3. Single or multi-vendor policy?

The most important difference in moving from ERP to Cloud is that you must decide how you feel about giving up the control that you currently have on your processes and systems. In return, you will benefit from the standardization that a cloud vendor can provide. Look at this picture:

ERP_SAAS

As you can see, I’ve included 2 more solutions for sake of completeness: Cloud ERP and BPAAS. These are not strictly technical solutions as they include processes and services, but when you start evaluating your move to the cloud, it’s always good to know that there are options.

Of course Standardizaton and Control are not the only topics that must be discussed when you choose your new HR System. I’ve created a list of other topics and they will be the subject of my next post.

Anita Lettink, 2013
Anita will be delivering an exclusive keynote presentation – “The State of HR Technology Today”, explaining current and upcoming tools and trends for HR and business, at the HR Change & Transformation 2013 international summit in London on 25 September.

Download the detailed agenda and visit the website to book your place at this senior-level and interactive event.

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The Impact of Cyber Security and Social Media on the Global HR Community

Mike Loginov, Ascot Barclay, 27 June 2013

As the internet increases global trading opportunities for business, so it also leaves the door wide open for cyber criminals to exploit the systems of organisations across the world. That includes yours. If you’ve been following the story of Bradley Manning – who passed US classified material to Wikileaks – and thinking that data leaks are a government problem, you’re very wrong.

Do you remember the case of the broker who incurred millions of pounds of losses for his investment bank employer by making unauthorised trades? You may have filed it in the ‘That’s the banks for you’ folder in your brain but it’s a perfect example of the dangers that lurk within the organisation. In other words, the employees.

The big problem is that cyber crime just isn’t being discussed enough within or outside the HR community. We Googled ‘top commercial challenges for global organisations’ and nothing on page one of the results so much as mentioned cyber crime. They covered sustainability, regulation, emerging technologies, economic recovery and pricing pressures, but nothing on data security. With such poor coverage, it’s no wonder that the subject isn’t on the HR radar.

There’s definitely a disconnect between cyber crime’s prominence and its prevalence. According to a report by the ACCA, cyber crime is now one of the top four global economic crimes. Its survey revealed that almost as many organisations were a victim of cyber crime in the previous year as accounting fraud and bribery or corruption.

Why HR Matters

So why should the global HR community sit up and take note? In the past, HR and legal departments were seen as fairly low risk but it’s clear that they contain a lot of confidential information that is a treasure trove to cyber criminals. Just consider the issue of indentify theft alone; those electronic records contain everything that a criminal needs to steal the identity of your employees. And just think what that would do to the organisation’s reputation.

As we mentioned above, the threat cuts both ways. Criminals from outside the organisation can use the weaknesses in your systems and the people who use them to their advantage. And staff within the organisation are capable of misusing confidential data. The common denominator is the employee, which makes cyber crime a high priority within the HR strategy.

On top of this, there’s the issue of social media. Businesses of all shapes and sizes use sites like Facebook, YouTube and Twitter to market their brand. With these online communications channels available 24 hours a day, social media represents an easy way for cyber criminals to access your information systems. So, while you may not have thought that the Marketing function needed much training in cyber crime, it’s clear that they need to be alert to the most common security dangers within internet marketing.

Employees should be regarded as high value assets and potential liabilities. Unless staff understand their responsibilities regarding the storage and use of confidential information, they will remain a risk to the organisation’s reputation. It’s also important that HR understands the interdependencies across the organisation and closes the gaps between functions and countries.

What the Global HR Community Needs to Do

To combat the dangers of cyber crime, HR professionals should undertake the following actions:

  • Develop ‘situational awareness’ of cyber crime threats in the locations in which your organisation operates and where confidential data is stored. A cyber security cultural audit will tell you what the current levels of knowledge of cyber crime are.
  • From this information, a training programme can be devised and delivered, focusing on the greatest areas of risk. Even if some staff have low access levels to company information, they should be made aware of problems and dangers that can exist. For those who have major information management responsibilities, consider investing in a Cyber Security Awareness Certification Programme for IT Professionals.
  • Ensure that cyber crime is placed firmly within the organisation’s risk identification protocols. While the CEO needs to lead on this, it’s essential that HR is able to work with IT to deploy personnel to manage any incidents that do occur. Furthermore, these actions must be consistent and efficient, regardless of where the problem originated.
  • Launch an induction programme that includes cyber crime awareness at the appropriate level. Only HR has the information to discern roles and their relevant user access so it’s their responsibility to lead the way.
  • Give staff clear instructions on the use of portable equipment such as laptops, tablets and smartphones and include the types of behaviour that will result in disciplinary action.
  • Above all, ensure that these actions are carried out at all the organisation’s offices and locations, no matter whether you work in a regional business or a global business that operates on different continents.

— Mike will be running a non-technical workshop specifically designed for HR professionals, to address all these areas, as part of a larger HR summit in London.

 

Cyber Security: The Essential Role of HR, 24 September, London

Part of HR Change & Transformation 2013

Visit the websiteDownload the brochure