Boston Consulting Group European Association for Personnel Development Future of HR in Europe 2010 Boston Consulting Group European Association for Personnel Development

What is HR? Management of people within an organization 3 major areas: - staffing - employee pay - defining/designing work Purpose: maximize productivity by optimizing effectiveness of staff Task is unlikely to change despite increasing pace of change: “the basic mission of human resources will always be to acquire, develop, and retain talent align the workforce with the business and be an excellent contributor to the business" Source: Gubman, Journal of Business Strategy Future of HR

HR tasks (1) Staffing - hire & fire - job design/ job descriptions - job performance Pay & benefits Future of HR

HR tasks (2) Training & development - on-boarding - informing - new skills - safety training - professional/ technical education - supervisor / management training - leadership development Labour relations Health & safety Future of HR

Future of HR

Critical challenges Managing talent Managing demographics Learning organisation Work Life balance Managing change/ cultural transformation Leadership development Measuring HR performance Performance management Employee commitment Diversity Corporate social responsibility Managing globalisation Shared service. Outsourcing HR Re-structuring organisation Big 5 9 other issues Future of HR

Future of HR

Managing demographics Learning organisation Work Life balance Big 5 Managing talent Managing demographics Learning organisation Work Life balance Managing change Future of HR

Report survey 1355 senior executives 27 European countries Views on 17 topics in HRM Follow-up interviews with senior 100 executives Future of HR

Summary Top 5 are most important capabilities for future Top 5 are where companies are currently weakest Only 30% have begun to tackle all 5 Because of migration willingness, top 5 affect Europe as a whole Importance if all 17 topics varies between countries Future of HR

Managing talent (1) Shortage of good talent is world-wide Companies preparing to migrate to emerging markets likely to increase in 5-8 years Needs for talent reflects business’s strategic plans Need to identify (1) specific future types of employees (2) best routes for finding them Future of HR

Managing talent (2) Highly skilled talent to be sourced world- wide Reduced company loyalty Retention of talent requires: (1) tailored career tracks| (2) attractive rewards (3) full use of talent’s interests, skills, abilities Employment offer to align with desires of talent and employer’s own brand image Broaden talent search to diverse groups Offer meets gender, ethnic needs & goals Future of HR

Managing demographics (1) Ageing workforce demands re-assessment: (1) loss of capacity & knowledge (2) ageing workforce Loss of capacity – steps to take: (1) how will workforce change 5,10,15 years? (retirement, attrition, recruitment) (2) What kind /how many employees needed /which function? (3) Difference between (1) & (2)? (4) Plans to address shortfalls & surpluses Future of HR

Managing demographics (2) Ageing workforce - implications: - productivity - capacity to work in shifts - different ways of motivating - potential to innovate - illness - absenteeism - cost of labour Future of HR

Managing demographics (3) Ageing workforce - steps to take: (1) health care to minimise absence (2) new career systems (3) adapting patterns of shift working Future of HR

Learning organisation (1) Need: (1) Speed of change in global economy (2) Help staff cope with complexities Failure of education to equip new workers with skills to keep pace Business success dependent on linking training with strategy Future of HR

Learning organisation (2) Choose learning strategy BEST suited to company culture; - in-class, on-the-job, distance, action learning Greatly boost on-the-job learning opportunities - job rotation, counselling. Coaching Return on investment (ROI): - define & measure what expect. Get from learning investment - tangible outcomes, measurable goals - follow-through Future of HR

Work Life balance (1) Boundaries between private and work life blur Jobs assessed by how job: - helps balances life’s demands - furthers personal goals & values Flexible work arrangements to attract & retain best talent Appeal to feeling that staff need sense of greater purpose from work Future of HR

Work Life balance (2) Assess what best staff seek to get WLB Introduce new ways of working: - flexible working hours - home-working - job-sharing Adopt corporate social responsibility: - company brand-image - widen market perception & appeal - raise ethical standards of firm - access high-quality staff Future of HR

Managing change (1) World-wide search for new staff brings cultural challenge Entering new markets with greater speed requires cultural transformation HR needs to help line-manager communicate to staff: - need for change - empower staff to make change happen Future of HR

Managing change (2) Change driven from top Top level change-management post Ensure changes are completed and succeed Continual assessment of staff behaviour & reaction Programmes to shape staff performance Change staff actions for maximum effectiveness Future of HR

HR – fundamental capabilities (1) Meeting Big 5 “herculean” task - but not enough for HR Mastering HR processes - systematically assess & improve - increase efficiency & effectiveness of HR - outsourcing/ shared service centres Deliver on recruiting & staffing: - innovate recruitment means for ITC economy Future of HR

HR – fundamental capabilities (2) Deliver on recruiting & staffing: - innovate recruitment means for ITC economy - source new & more diverse types of talent - collaborate with line managers on staffing - internal staff processes & measures Future of HR

HR – fundamental capabilities (3) HR – Strategic partner: - show business acumen - display business pragmatism - equip HR with “business expertise” - measure own performance against criteria: - qualitative - quantitative - financial Future of HR

9 other issues Leadership development Measuring HR performance Performance management Employee commitment Diversity Corporate social responsibility Managing globalisation Shared service. Outsourcing HR Re-structuring organisation Future of HR

Specifics (1) - country, industry, company External/ internal environments: - ageing baby boomers - changing social contract / job for life - declining loyalty to employers - focus of work life balance Business challenges: - technological change - legislation & regulation - cost reduction demands - reorganisation for growth & globalisation Future of HR

Specifics (2) - country, industry, company Assess HR for future demands: - current strengths & weaknesses - capacity to transform - plans to renew/ upgrade Future of HR

Best practice 2 features of high performing HR departments: Named teams dedicated to particular projects (21% higher) Identifiable top level support for HR change projects (65% higher) Future of HR