HR Confidence on the Rise
by Robert Levy
After two years of recession, human resources leaders believe their work during the recession has heightened their value in the eyes of executive leadership, and they are looking toward increasing their impact this year.
Those are two of the key findings of a recent survey, "State of the Union in HR: Looking Ahead to 2010," co-sponsored by HRToolbench and Arbita, which sought to answer these questions: Following one of the most challenging years for business in recent memory, what does 2010 hold for HR? Can HR expect more of the same? Or is there cause for optimism?
Valued Business Partners
Based on answers from 400 survey respondents across multiple levels of HR and companies of varying sizes, the general consensus is that cause exists for optimism. After cuts in jobs, benefits and wages during the past two years, HR professionals across the board are anticipating brighter days ahead.
The best news may be that many believe performance during the recession has earned HR respect as a business partner. Many businesses turned to HR during the recession to help make often difficult decisions about job cuts. It appears this reliance has enhanced HR's value in the eyes of executives and front-line managers.
But while many survey respondents believe stature has improved during the economic downturn, they also acknowledge they continue to face an uphill battle in dealing with the fallout of the recession during the slow turnaround. Many HR practitioners are seeking ways to contribute directly to organization success, reflected in the finding that performance management will be the most significant focus in 2010; 74 percent of respondents said they are highly likely or likely to be engaged in helping managers define and communicate performance expectations to employees.
A rebound in the job market could, however, add a degree of difficulty to HR's job, as well as contribute to HR's heightened respect from senior executives. Once employees sense they have more employment options, retaining key personnel will become a critical HR issue.
During the downturn, as job markets tightened and layoffs became more widespread, many employees were simply looking to keep their jobs. As hiring rebounds in 2010, a key focus for HR will be on the tools to improve retention of top talent: implementing career paths, defining the organization's talent needs and skill levels, adjusting salary ranges to assure competitive pay practices and focusing on training.
A Rebuilding Year
Other survey highlights include:
a) Forty-eight percent of all respondents believe HR's role in their organizations will be stronger after the recession. The same number believe front-line managers have come to rely more on HR than before, and more than a third of respondents believe the current recession has led senior executives to view HR as a more important business partner.
b) More than half of the respondents are highly likely or likely to conduct competitive salary market research and adjust ranges to assure competitive pay practices.
c) Sixty-one percent of respondents are highly likely or likely to be focused on enhancing their internal employee communications to help build employee commitment and understanding.
d) Two-thirds of respondents said reducing the cost of employee benefits will be a top priority in 2010.
e) Performance management will be a significant focus in 2010 and workforce retention and development will gain in priority in 2010.
f) HR professionals in general are anticipating a rebuilding year for training in 2010.
HR's Priorities for 2010
How will HR professionals leverage their increased value to their organizations in 2010? The survey results reflect a belief that as the recovery takes hold and people management issues become more critical, workforce performance and productivity will continue to be strategic imperatives, whether businesses are fighting for survival or looking to take advantage of improved business conditions.
Survey respondents identified the top targets and initiatives for 2010:
a) Performance management.
b) Retention.
c) Compensation.
d) Workforce development.
e) Training.
f) Employee benefits.
1. Performance Management
Defining and communicating performance expectations to every employee.
Improving individual performance and connecting the work of individual employees to business objectives can have a powerful impact on an organization, and talent management tools and technology will be paramount in providing the data HR leaders will need to support business leaders during the coming year.
This alignment is a major and critical challenge for HR that will require in-depth understanding of business objectives and extensive coordination of employee performance data. In 2010, HR professionals expect to actively contribute to their organizations' business performance, and they expect to help managers execute on business strategy through more effective employee performance management.
a) Sixty-nine percent of respondents expect to make the performance management process more ongoing and collaborative, and also want to align individual employee performance goals with the broader strategic objectives of their organizations.
2. Retention
Implementing career paths and reducing voluntary turnover.
In 2010, HR anticipates hiring to reignite, leading many to believe that a key HR focus will be retaining key employees. One of the identified retention devices will be to provide employees increased career path planning services.
a) Fifty-two percent of respondents are highly likely or likely to implement career path planning as a retention device.
b) Fifty-one percent are highly likely or likely to be searching for ways to reduce voluntary turnover in 2010.
3. Compensation
Conducting competitive salary market research, adjusting ranges to assure competitive pay practices.
Compensation priorities in 2010 will bolster efforts to attract and retain key talent. Again, this trend indicates that HR anticipates a rebound in the hiring market. Adjusting salaries to a market rate and communicating the total value of base pay, variable rewards and employee benefits are effective retention strategies.
a) Forty-seven percent of respondents say selective pay adjustments will be based on conducting competitive salary market research.
b) Workforce development: Defining the talent needs and skill levels required to execute on their organizations' planned business strategies.
c) HR apparently is anticipating the need to plug talent gaps created during the job and budget cuts of 2008 and 2009 and is preparing to be more strategic in 2010 and beyond.
d) Seventy percent of respondents are highly likely or likely to focus on defining the talent needs and skill levels required to execute on their organizations' planned business strategies in 2010.
e) Fifty-seven percent anticipate creating detailed staffing plans supplemented by finding creative ways to source outside talent.
f) Forty-nine percent also indicate that implementing technology to manage resumes and job applicant flow will be a priority.
4. Training
Focusing on developing the current talent within their organization.
HR professionals are anticipating a year of rebuilding for training programs in 2010. This will require deep understanding of workforce training needs and providing focused training courses to optimize training resources.
a) Sixty-three percent of respondents are highly likely or likely to be focused on developing the current talent within their organization.
b) Fifty-four percent of respondents are highly likely or likely to identify the competency levels and skill gaps of current employees as a basis for establishing training priorities.
5. Employee Benefits
Finding ways to reduce employee benefit costs.
a) Forty-eight percent of all respondents believe HR's role in their organizations will be stronger after the recession. The same number believe front-line managers have come to rely more on HR than before, and more than a third of respondents believe the current recession has led senior executives to view HR as a more important business partner.
b) More than half of the respondents are highly likely or likely to conduct competitive salary market research and adjust ranges to assure competitive pay practices.
c) Sixty-one percent of respondents are highly likely or likely to be focused on enhancing their internal employee communications to help build employee commitment and understanding.
d) Two-thirds of respondents said reducing the cost of employee benefits will be a top priority in 2010.
e) Performance management will be a significant focus in 2010 and workforce retention and development will gain in priority in 2010.
f) HR professionals in general are anticipating a rebuilding year for training in 2010.
HR's Priorities for 2010
How will HR professionals leverage their increased value to their organizations in 2010?
The survey results reflect a belief that as the recovery takes hold and people management issues become more critical, workforce performance and productivity will continue to be strategic imperatives, whether businesses are fighting for survival or looking to take advantage of improved business conditions.
Survey respondents identified the top targets and initiatives for 2010:
a) Performance management.
b) Retention.
c) Compensation.
d) Workforce development.
e) Training.
f) Employee benefits.
1. Performance Management
Defining and communicating performance expectations to every employee.
Improving individual performance and connecting the work of individual employees to business objectives can have a powerful impact on an organization, and talent management tools and technology will be paramount in providing the data HR leaders will need to support business leaders during the coming year.
This alignment is a major and critical challenge for HR that will require in-depth understanding of business objectives and extensive coordination of employee performance data. In 2010, HR professionals expect to actively contribute to their organizations' business performance, and they expect to help managers execute on business strategy through more effective employee performance management.
a) Sixty-nine percent of respondents expect to make the performance management process more ongoing and collaborative, and also want to align individual employee performance goals with the broader strategic objectives of their organizations.
2. Retention
Implementing career paths and reducing voluntary turnover.
In 2010, HR anticipates hiring to reignite, leading many to believe that a key HR focus will be retaining key employees. One of the identified retention devices will be to provide employees increased career path planning services.
a) Fifty-two percent of respondents are highly likely or likely to implement career path planning as a retention device.
b) Fifty-one percent are highly likely or likely to be searching for ways to reduce voluntary turnover in 2010.
3. Compensation
Conducting competitive salary market research, adjusting ranges to assure competitive pay practices.
Compensation priorities in 2010 will bolster efforts to attract and retain key talent. Again, this trend indicates that HR anticipates a rebound in the hiring market. Adjusting salaries to a market rate and communicating the total value of base pay, variable rewards and employee benefits are effective retention strategies.
a) Forty-seven percent of respondents say selective pay adjustments will be based on conducting competitive salary market research.
4. Workforce Development
Defining the talent needs and skill levels required to execute on their organizations' planned business strategies.
HR apparently is anticipating the need to plug talent gaps created during the job and budget cuts of 2008 and 2009 and is preparing to be more strategic in 2010 and beyond.
a) Seventy percent of respondents are highly likely or likely to focus on defining the talent needs and skill levels required to execute on their organizations' planned business strategies in 2010.
b) Fifty-seven percent anticipate creating detailed staffing plans supplemented by finding creative ways to source outside talent.
c) Forty-nine percent also indicate that implementing technology to manage resumes and job applicant flow will be a priority.
5. Training
Focusing on developing the current talent within their organization.
HR professionals are anticipating a year of rebuilding for training programs in 2010. This will require deep understanding of workforce training needs and providing focused training courses to optimize training resources.
a) Sixty-three percent of respondents are highly likely or likely to be focused on developing the current talent within their organization.
b) Fifty-four percent of respondents are highly likely or likely to identify the competency levels and skill gaps of current employees as a basis for establishing training priorities.
6. Employee Benefits
Finding ways to reduce employee benefit costs.
Mercer is predicting an average 7.4 percent increase in health costs for 2010, on top of four consecutive years of annual 6 percent increases. Despite the rapidly escalating cost of health care:
a) Forty percent of survey respondents do not expect to transfer more of the cost of benefits to employees.
b) Sixty-three percent of respondents say they and their benefits vendors and consultants will be working strenuously to find ways to reduce the cost of employee benefits.
Although HR respondents anticipate brighter days in 2010, talent managers should take the following steps to maximize their impact and fully capitalize on their increased stature within organizations:
a) Develop effective performance management.
b) Improve employee communications.
c) Minimize turnover.
d) Develop competitive compensation strategies.
e) Define the organization's talent needs and workforce skill levels.
[About the Author: Robert Levy is president of HR Technology Solutions Inc. He has more than 30 years of experience in human resources management as an HR executive, employment attorney and senior consultant.]
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