Telecommunication Development Bureau Transforming HR: Global Trends and Emerging Practices Lecture 2 ITU Regional Workshop on Strategic HR Management Cairo Egypt April 2008

Telecommunication Development Bureau HR as Change Manager HR as change agent in close cooperation (being a part of the solution and not the problem) Identifying behaviors and values that support change in line with new corporate goals and challenges meeting market and owners requirement Motivate, Implementing new rules and procedures that reinforce and reward desired behaviors Implementing effective communication strategies to influence acceptance of change, and build a new culture in the organisation

Telecommunication Development Bureau HR as Change Manager Driving Cultural and Behavioral Change in the organisation was found to be the second Top HR Challenge by respondents to a Mercer Survey HR is responsible for creating an environment where people want to come to work, contribute while they are there, and stay long enough to make a difference. The Challenge for organisations, be they commercial, or regulatory, is to become an employer of choice. Establishing an Employer of choice Status is HRs responsibility. Implementing new rules and procedures that reinforce and reward desired behaviors HR must help create a Corporate culture that is the dramatic force behind being employer of choice.

Telecommunication Development Bureau Discuss Successful Change What are the desired behaviours What demands to become the employer of choice How to combine these Exemplify

Telecommunication Development Bureau Communication Make sure that your line managers think effective communication. Succession Planning Build your leadership pipeline. Diversity Move your organization beyond intellectual diversity. Measurement Focus on meaningful Measures KPI. PRIORITIES FOR HR EXECUTIVES OVER THE NEXT YEARS Capacity building Ensure your organizational capacity exceeds the rate of change. Leadership Redefine leadership, and demand it of every employee. Employment Branding Create a brand for your organization in the labour market. Employee Involvement Capture a bigger portion of the employee mindshare. Role of Strategic HR Role of Strategic HR

Telecommunication Development Bureau The Mercer Transformation Study, 2006 How HR sees itself vis a vis the business Organizations seeing HR as a source of value to the business 84% Organizations with HR strategy linked to long term business objectives 58% HR consider itself strategic partner to the business 67% HR have active input to the board, mainly on talent and leadership issues 94% HR directors report to CEO62%

Telecommunication Development Bureau The Top Human Capital Challenges Acquiring + Retaining Key Talent60% Driving Cultural + Behavioral Change in the Organization 44% Building Leadership Capability30% Increasing Line Manager Capability to handle people Management Responsibilities 21% % of Participants

Telecommunication Development Bureau The Top Human Capital Challenges % of Participants Placing constraints On headcount (making do with less) 19% Implementing People Changes resulting from changes due to operational performance 19% Implementing Succession Planning13% Reducing Overall Human Capital Costs 11%

Telecommunication Development Bureau The Top Three HR Challenges, show that transformation is clearly on the Agenda of HR Executives in Europe The Top Human Capital Challenges

Telecommunication Development Bureau New challenges for HR Challenge Increasing workforce productivity Constraints on Headcount Encouraging organisational innovation Implementing people changes resulting from changes due to operational performance Response 22% 20% 18%

Telecommunication Development Bureau New challenges for HR Challenge Measuring human capital contribution to business performance Response 17% Lack of consensus around the Organizations strategy/direction 16% Reducing overall human capital costs 16% Resourcing and managing HR issues in a new geographies for the company 15%

Telecommunication Development Bureau New challenges for HR Challenge Managing human capital during and after an acquisition or merger Workforce planning Increasing the return on investment in remuneration Coping with aging workforce Response 15% 14% 12%

Telecommunication Development Bureau Observation The major challenges for HR are evidently linked to transformational issues and human capital strategy Matters of processes, technology and administration are becoming less and less of a challenge to HR The verdict? HR is moving up the business value chain

Telecommunication Development Bureau What HR functions will matter in the future? Function Human Capital strategy Today 40% 2-3 yrs 64% Talent Management 49%55% Change Management 42%38% Leadership Development 49%52% Organization Design Organization Development 21% 35% 18% 40%

Telecommunication Development Bureau What HR functions will matter in the future? Operational excellence within the HR Function Today 46% 2-3 yrs 32% Workforce Planning 31%24% Succession Planning 24%27% Industrial Relations 32%19% Risk Management 18%17% Function

Telecommunication Development Bureau Primary Drivers Of HR Transformation Part of Broader Organization with Transformation Process 38% Response to Changes in the Organization 27% Leadership Changes in the HR Function 13% Company-Wide Cost Reduction mandate 8%

Telecommunication Development Bureau Primary Drivers Of HR Transformation HR not adding Value in its existing Role6% CEO/business Leader Mandate for Change in the HR and/or other Staff functions 5% Change in Domestic Market environment and Regulation1%

Telecommunication Development Bureau HR as a Strategic Partner HR is active participant when discussing Business Wide Issues76% HR Drives or develops methodologies to drive change in the organization70% HR is expected to translate Business Strategy into Human Capital Strategy for the Business 67% HR is part of Business Operations Planning 63% % of Participants What Convinces you that HR is a Strategic Partner?

Telecommunication Development Bureau HR as a Strategic Partner What Convinces you that HR is a Strategic Partner? % of Participants HR brought in early to significant business issues/opportunities57% HR is expected to help improve efficient output56% HR builds and/or links data sets to provide enhanced decision support41% Other2%

Telecommunication Development Bureau Role of HR Understanding Business and driving Change are coming up as top Symbols of a partner role for HR. There is a clear set of Expectations of a different role for HR within the New Environment (include sustainability). But what exactly does HR do?

Telecommunication Development Bureau Where does HR spends ITS Time? Employee Relations13% Staffing12% Compensation11% Payroll10%

Telecommunication Development Bureau Where does HR spends ITS Time? Training10% Labour/Relations8% HRIS/HR Applications7% HR Department Management7% Organisational Development6%

Telecommunication Development Bureau Where does HR spends ITS Time? Scaled Time + Attendance4% Non-Retirement Benefits3% Retirement Benefits2% So 40% of HR Time is still spent on Transactional and Compliance related activities, while only 15% time spent on strategic partnering.

Telecommunication Development Bureau Challenges for HR HR still very strong in its traditional functional areas and has adequate Skills here. The biggest Barrier to HR playing the new role is the Skills Barrier (not business and strategy related). But needs to acquire a new set of competencies to be able to adequately play the Business partner role.

Telecommunication Development Bureau New Skills/Competencies Required Ability to Improve Customer Service (care) Process and Manage Projects (efficiently used) Technology Deployment (tech change) Business Understanding (survival-sustainable) Financial Understanding (Wacc)

Telecommunication Development Bureau Strong Skills in the HR (History) Functional HR Experience53% Interpersonal Skills52% Interviewing Assessment Skills49% Team building Skills ??49% Record Keeping/Data Maintenance46% Customer Service CRM ?41%

Telecommunication Development Bureau Skills that are weak/very weak Business Strategy Skills55% Financial Skills50% Cross-functional Expertise (Multi disiplinary skills 48% Cross Analysis and Measurement (Market analysis) 44% Organizational Assessment / Job design 43%

Telecommunication Development Bureau Skills that are weak/very weak Business intelligence data analysis and reporting 43% Process Management/Process Improvement 39% Change Management39% Project management38% Business Understanding35%

Telecommunication Development Bureau Where is your organization, is change necessary or not? Who is your competitor ? Do your staff fear changes ? Why do you have the best knowledge – and do not need to change ? What is the worst thing that can happen to your staff Be realistic and honest – values (transperency) Critical issues