The urge to commit to too many initiatives may be one of the greatest challenges facing HR, according to global research by the Hackett Group consultancy.
Overcommitment represents the “greatest transformation hurdle” for HR executives as they attempt to reduce costs, add value, and pursue digital transformation.
With so many critical development areas, and the ongoing demand that they do more with less, HR is simply spread too thin. It’s critical that HR leaders prioritise and make sure they’re not directing resources at too many things. Otherwise, it will be difficult for them to move the needle” – Tony DiRomualdo
Hackett Group’s HR Key Issues research, based on data from 200 global executives, also showed that organisational culture has become the top issue and most critical development area for HR.
“Culture has always been in the top 10,” said Hackett’s senior research director Tony DiRomualdo. “But the move to the number-one spot in terms of both top issues and critical development areas is unprecedented and disconcerting. It speaks to the challenges that both the enterprise and HR have had in coping with the impact of digital business.
“Even if they’re making progress on the technology front, legacy organisational culture is holding the organisation back from achieving its full potential. HR executives are feeling the pressure to help the business move faster, to innovate, take risks and to be more experimental.”
Talent management and development is also a high priority for HR, the research found.
“Adapting talent management capabilities to support change” is the second key issue for HR, and “improving talent management,” “retain staff with critical skills” and “addressing talent/skills shortages” are all in the top 10.
According to The Hackett Group associate principal Franco Girimonte, “We are seeing more and more organisations invest in their talent management processes such as recruiting websites, applicant tracking and assessments, candidate and employee experience, engagement tracking and inner mobility.”
“On top of everything else, our research identifies overcommitment as the top hurdle to HR transformation, which is not hard to understand” said DiRomualdo. “With so many critical development areas, and the ongoing demand that they do more with less, HR is simply spread too thin. It’s critical that HR leaders prioritise and make sure they’re not directing resources at too many things. Otherwise, it will be difficult for them to move the needle.”
Girimonte added: “Achieving a proper balance while transforming the function is critical. As HR technology changes are made, it’s important that they also look at things like their operating model, skill sets, alignment of responsibilities and more. Ignoring this will hurt them in the long run.”
The research also examined HR’s adoption and effectiveness levels for various technologies. It found that HR is more aggressive than other business functions in adopting cloud-based systems, and expects to see a 26% growth in this area.
However, nearly 60% of respondents still rely on legacy on-premise systems, which fall short of expectations more than half the time, despite significant long-term investments.
Robotic process automation (RPA) met respondents’ expectations 83% of the time, although less than 10% of HR functions had completed large-scale deployments. Eight per cent said RPA exceeded expectations while 8% said it fell short.
In terms of digital skills, 76% of respondents said they had “large” or “very large” skills gaps in analytics and modelling, while 67% said the same about “data savviness”.
Asked what the most effective practices used to improve the employee experience the most popular response (23%) was employee surveys and focus groups.
“It’s an uphill battle for HR to improve its ability to support enterprise objectives while moving forward with their own functional improvement agenda,” said Girimonte. “The challenges identified in our research are too numerous to be overcome in a single year.
“Instead, HR leaders should aim to make measurable improvements in capabilities that address top business priorities such as enterprise digital transformation, culture and skills gaps. This will increase HR’s value contribution to the business and help it to secure further support from top leaders for HR transformation efforts.”