For the regular human resource professional no HR conference is ever complete without the perennial presentations involving the role and contribution of the function. Indeed subjecting itself to periods of deep self-analysis seems to an occupational hazard for many human resource professionals. The source of the problem is often a perceived inability to demonstrate a value-added contribution to business performance. The lack of a hard quantitative data and cost benefit analyses to prove the value of HR programmes and initiatives is often viewed as a fundamental weakness by some sections of the profession.
But is this general lack of self-confidence and belief amongst so many HR professionals justified? Are other functions equally guilty of the faults that HR people frequently accuse themselves of? I believe that the answer is a definite yes! But the interesting point is that these other functions do not seem to suffer the same feelings of self-doubt and worth. Apart from the cliché jokes about the size of marketing budgets and the sheer numbers of accountants employed both the marketing and finance functions enjoy for the majority of time high levels of credibility and influence within their organisations.
The fact is that if subjected to a rigorous analysis many marketing departments would find difficulty in trying to justify the effectiveness of many of their expensive initiatives and campaigns. The old joke about only fifty- percent of the marketing budget being effective but the problem being we don’t know which fifty- percent characterises the difficulty. But marketing departments are very skilled at using data and analysis to present their case. Added to which they naturally know quite a lot about how to package and sell an idea or proposition. The result is little time devoted to worries about value added contributions.
Equally in most organisations few people dare to question why there might be 300 people working in finance or why the company’s budgetary processes lead managers to fight and compete amongst each other rather than beat the competitors. Is there not a strong need to differentiate between good financial management practices and information and accountants simply being accountants? Can we not ask difficult and far-reaching questions of many finance functions and their practices? Such as why is it that 70-80% of our managers do not really understand the basics of financial accounting? Is it not the role of the function to enable managers to manage finance effectively? If it is then why does finance appear to be kept as some kind of big secret? Would we not all make better decisions and ultimately more money if managers had a more effective understanding of the numbers? Good questions I would argue but you rarely discover a finance function debating or worrying about its contribution or value. - Although some of my more informed finance colleagues tell me this is beginning to happen in enlightened companies.
So what is it that these other functions appear to do so well and HR professionals do not? Quite simply it is because these other functions know how to market their services and put together a business case effectively whereas the many HR functions do not.
Lots of HR functions do add tremendous business value to their organisations but unfortunately they fail to market their good work within the organisation. Consequently people frequently overlook their inputs or indeed criticise their efforts. The result is a function that endlessly beats itself up about its perceived role and credibility.
So how do we change this negative cycle? To begin to take action on the marketing front a HR team needs to begin by addressing the following fundamental questions:
1. What are we?
The essence of any marketing strategy is being clear as to what the product or service offering is. So the critical question is what is the HR function? Administrative service, business partner, change agent, or business performance improvement group? Unless we are clear about our mission and role it is always going to be difficult to be focused. In marketing focus is key to success.
2. Our Customer Profile -Who is our customer?
Being clear and focused as to who your customers or clients are is the next vital question. You cannot market anything unless you target your customers. So a HR function must identify it’s various customer segments – The Board, senior & middle management, staff, trade unions, external groups and bodies etc.
3. Our Product & Service Definition
Quite simply this involves defining what your customers actually want as opposed to what you think they want. Do they want a simple and administratively efficient department or a leading edge service to assist managers in coping with rapid change? Or do they in fact want both? You have to always be working back from the customer’s perspective not your own. Forget this vital element and any function is soon going to be in trouble.
4. Our Service and Product Provision
Having identified what your customers want we then need to define what it is we are currently providing? The critical issue here is to never ever confuse what we are selling with what our customer actually wants to buy. This is perhaps a big challenge for any professional function. Not to allow our enthusiasm and professionalism to get the better of us and to impose on the organisation initiatives and programmes for which there is no real demand. Classically for many of us HR professional’s self-interest gets in the way of business needs. Such that whilst we love our new fashions and approaches the rest of the organisation could not care less!
5. Our Customer Perception
What is our internal image and customer perception? The HR function needs to be clear as to the perceptions their customers have on the levels of service that are being provided. And there is no value in thinking that you are doing a great job when the general perception of your customers is that you are doing an awful job. Surveys are an obvious way for the function to audit its service provision. If the results are negative in this area then any function will need to work very hard on altering the image.
6. Customer Value Perception
Does the customer think they are getting value for money? What sort of feedback do you receive from your line colleagues?
“Your department is fantastic – how do you manage to do so much with so little resource!” or “What do you do all day – there are so many of you?” Naturally the objective is to get a high rating.
7. Expansion and Distribution Policy
What is our approach to servicing our customers? Are we focusing on some specific groups such as Divisional Heads, Plant Directors or Sales Managers?
How do we organise ourselves to deliver our services and products? Are we a central group or devolved to the business units? Ultimately we have to be clear as to the methods by which we plan to deliver our services so that we can communicate this to our customers.
8. Our Communications
How do we communicate our services to the customers? What approaches do we adopt? What are the key messages we deliver? Can our customers repeat our messages? Do they understand our role and contribution?
9. Our Targets and Finances
On what basis are we measured? How are we funded? What this means for our operations and service offerings?
These fundamental questions are best addressed by a HR team in some form of strategic workshop, which is conducted away from the day to day pressures of running a HR department. The discussions generated can often be heated and challenging, particularly where customer perceptions are raised. Debates may also question practices that have been jealously guarded and held onto by some personnel for many years. It is a good idea in such cases to secure some independent survey results so as to deal with the emotions that can be generated around potential criticisms of existing methods and practices. .
The result of such a session should be a clearly focused HR group that knows what its priorities are and what it needs to be doing to promote itself within the organisation. At the same time we should also seriously consider following some other important guidelines to help us demonstrate value and contribution to business performance.
The use of factual bottom line measures
This is a particularly difficult challenge for the HR community. It might even be described as the Holy Grail of the HR function as for year’s, experts, academics and HR professionals have been working on complex equations and algorisms to try to solve the problem. And whilst no real definitive answer has yet been developed I am not entirely convinced that this is where the problem really is. Clearly if some fundamental equation was developed it would be a great asset to the HR function. But after so much effort and research a real solution still seems out of reach. Although with the onset of knowledge management and intellectual capital there is a new impetus behind the questions.
Being practical and pragmatic in outlook I tend to believe that the real problem involves HR people adopting the wrong approach and outlook. Many managers I believe fully appreciate the difficulties involved in trying to justify and demonstrate the cost benefit of certain HR and training initiatives. They understand that other factors impact on the situation to make clear linkages that may be difficult to prove. So perhaps it is not true to say that managers are always saying, “prove that training works.” What many managers do appreciate however are HR functions that work hard at trying to develop linkages and in so doing speak the language of the business rather than HR jargon.
To give a simple example my experiences lead me to believe that the vast majority of managers are not interested in training techniques or competencies. What they are interested in are the following:
- Increased sales/revenue
- Greater customer satisfaction
- Improved quality
- Reduced costs
- Lower levels of wastage
Interestingly all of the above items are potential outputs of training or other HR programmes and initiatives. But many HR professionals fall into the trap of talking features not benefits. They focus on their techniques and methods rather than the potential business benefits – which is what really interests the line manager. This is a classic error in selling and marketing anything. In a sense we may become victims of our professionalism. Getting caught up in our own little world of exclusive jargon and new techniques whilst excluding the outside world.
To further develop this theme it is critical that HR functions use some basic measures when seeking to influence line managers about people and business issues. Most functions should be able to calculate the following ratios, as they should be easily obtained from information that already sits around the organisation.
- Average sales per employee
- Average costs per employee
- Average profits per employee
- Compensation/revenue percentage
- This is the percentage of compensation divided by total revenue
- Average training costs per employee
- Average training hours per employee
But in my experience many HR functions neither know this information or for that matter think in such terms. This is where they again miss out on major opportunities to market their contribution by establishing the linkage between people performance and profitability. Whilst the above ratios are not startling in their originality their regular use illustrates a function that is trying to communicate and function in the language of the business. The challenge I therefore believe is really about attitudes and not the development of complex financial and mathematical models.
As a further example the use of a simple cost benefit matrix to help explain and explore different training approaches to line managers can work wonders for the quality of debate. The fact that a discussion about training issues can be structured around costs and benefits rather than the usual qualitative, “I feel and think” arguments, that characterise so many HR discussions, creates an immense difference. HR issues suddenly become very tangible and relevant. The interest levels rise, managers’ get more interested and the function’s credibility as business partners grow.
So we have to present our work in the language of the business. Of course many successful HR people have always worked on this basis. They have understood the skills and techniques necessary to achieve successful levels of influence. The easy part is that we can all copy these techniques and with a little effort and practice enjoy the benefits.
Market Your Successes
Don’t be afraid to promote a successful initiative or training programme across your organisation. If you have a project that been a fantastic success make sure the organisation gets to hear about it. Talk about it; present it as a case study at internal meetings or conferences, write articles in the company magazine. Encourage those mangers involved to talk about the benefits of the programme. In marketing terms there is no better or more effective piece of business that comes from a happy customer referral. So spread the good news around. Too many HR functions have a mistaken belief that their excellent work will always go recognised. Forget such magical thinking. You need to make sure that the benefits of your existence are made clear to everyone. Remember a lack of confidence is not a characteristic of marketing departments so be bold and assertive.
Find out where the business is hurting. If there are people or organisation problems involved then this is where you should go to try to offer assistance. Don’t spend time in areas that do not matter. If you can help a manager in trouble the chances are you will have a customer for life. So try to focus on issues that are giving the Chief Executive or other business leaders sleepless nights.
Influence Key Opinion Formers
Think about who the key players are in your organisation? Ask yourself if you work hard on influencing them as regards the role and contribution of HR. If you ignore them you may find yourself losing out in the next round of restructuring. Keep influential people in your sights. Make sure they are aware of your work and it’s benefits. Try to help them and their agendas.
To some people some of these actions might sound like empire building. They are not. They are simply aimed at helping any HR function focus on their customers. The fact is that we are all witnessing a strong corporate focus on support functions. The search is to identify the real business contribution in order to justify the costs. If you are not adding value in today’s environment, regardless of what function you work in, it will not be too long before someone comes along and starts to ask some demanding and difficult questions. By adopting a marketing approach to HR work the function can begin to gain the benefits of improved business contribution and credibility. If you still doubt it just take a look at your colleagues in marketing and finance the next time they are presenting their figures and charts!
Join the upcoming "Becoming a High Performance HR Business Partner" open program 14.10.2013-16.10.2013.