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HR Must Take the Lead

HR should devise strategies to guide their organizations through the current economic turmoil, according to experts who spoke during the second day of the HR Technology Conference®. Other sessions focused on leveraging Web 2.0, research on performance management, ways to approach cultural changes and issues affecting HR outsourcing.

Friday, October 17, 2008
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The second day of the HR Technology Conference and Exposition┬« began with the annual Industry Analysts Panel, where four of "arguably the smartest [people] in the world about HR technology" offered their opinions on a range of subjects -- from the future of Software-as-a-Service and the uses of Web 2.0 technologies to coping with economic turmoil and naming some of the vendors they like most.  

The analysts on the panel, praised by conference chair and HREOnline columnist Bill Kutik, were Jim Holincheck, managing vice president at Gartner; Lisa Rowan, program director at IDC; Zach Thomas, senior analyst at Forrester Research; and Naomi Lee Bloom, managing partner at business and technology consultancy Bloom & Wallace.  

While the panelists offered some advice to the audience on ways to cope with the economy, some audience polling at the start of the session indicated there has only been moderate impact thus far.  

Using instant-polling devices, two-thirds (66 percent) of the end-user audience indicated there had been "no effect" on the purchase of technology by their companies due to the economic situation, while nearly one-quarter (23 percent) said purchases or subscriptions to new software and services had been postponed and 11 percent said "some" purchases had been eliminated.  

On the vendor side, 44 percent said their companies had seen or projected no decline in revenue because of the economic turmoil. Nearly two in 10 (19 percent) said their companies had seen or projected a 20-percent decline in revenue; 14 percent said a 15-percent decline; 9 percent said more than 20 percent; 8 percent said a 10 percent-decline; and 6 percent said 5 percent.  

But all companies be prepared, said Bloom, who urged the audience to spend the weekend first, putting their personal financial situation in order and then, coming up with some strategies to guide their organizations through.  

"You need an intelligent plan to make sure you hold on to the key players in your organization," she said. "Make sure you are spending whatever limited dollars you have on what will make the biggest difference."  

Rowan encouraged HR to make sure whatever initiatives they pursue have "real business value," while Holincheck acknowledged that HR leaders will "have to make some hard choices" in the days ahead.  

He said the "things to focus on are cost savings and risk mitigation."  

The war for talent is shifting from recruiting to retention, said Thomas, so it's important for HR to concentrate on developing its key talent -- as well as determining how to identify just which employees are key for the organization.  

Retention strategies must also include an understanding of the generational issues at work, Bloom said, noting that companies will need to accommodate, for example, older workers who are unwilling to work seven days a week, while at the same time, accommodating younger workers "and their way of working and their way of learning."  

Web 2.0 -- elements such as wikis, instant messenger and social networking -- is surely a part of that, all of the analysts agreed, although the concept may be "a little bit overhyped right now," Holincheck said.  

At the same time, however, he agreed with Thomas that Web 2.0 offered potential for HR in the areas of learning, mentoring, sourcing and collaboration. And companies need to understand, he said, that "the horse is already out of the barn to some extent."  

"The reality is that workers are already using them today. The question is, how do you work with [such technologies] ... within your corporations," Holincheck said.  

When Kutik brought the questions around to discussing specific vendors in the HR technology field, beginning with Oracle's long-awaited Fusion application, Holincheck told the audience that "I don't think you can have Fusion be part of your [upgrade] plan" at this point, as there is no definite date when it will be delivered, although some "edge-area" applications will be available this year.  

As for talent-management suites, Rowan said Lawson's ERP system does a good job at offering the "breadth and depth of capabilities," while some of the niche best-of-breed vendors included Softscape, Authoria, SuccessFactors and Taleo.  

Thomas "largely agreed" with her assessment, adding Plateau to the mix. He cautioned the audience, however, to look at the history of the vendors to determine their capabilities "because they are all a little bit different -- not better or worse, just different."  

Holincheck's selections of modules included Plateau, Saba, SumTotal and Cornerstone OnDemand for companies interested in learning, performance management and succession planning.  

For performance management and comp, he said SuccessFactors, Softscape and Authoria were best of breed, and mentioned Halogen as a good choice in a "limited market."  

For performance, comp and succession, it would be "another eight vendors," he said.  

"I don't see any one set of vendors dominating. It's really the set of modules [each vendor offers]," Holincheck said.  

He also said that the trend toward SaaS would continue to be adopted by vendors, but that on-premise installations would remain a vital part of HR technology solutions.  

"Most customers don't care," he said. "They want to pick the best product to meet their business needs."  

He suggested HR leaders focus on the product first and on the delivery model second.   

Leveraging Web 2.0

Averbook, president of Knowledge Infusion of Minneapolis, had a simple message for those attending the "Updated Great New Technologies Just for You" session: If you're not using Web 2.0 technologies today, you probably will be some time soon.

For the first time, participants at the HR Technology Conference┬« were able to bring their own laptops and follow a session along in real-time as Averbook toured a variety of Web 2.0 offerings, including social-networking sites, blogs, wikis and RSS feeds.

Along the way, Averbook detailed some of the ways these tools could be leveraged by HR to engage employees and facilitate information and knowledge sharing.

In particular, social-networking software provides HR with a powerful tool, he said, noting that hiring, onboarding, employee engagement and training represent a few of the areas that could benefit from it.

"Facebook and LinkedIn know more about your employees than you do," said Averbook, who walked attendees through the process of setting up a Facebook account -- and outlined some its capabilities.

Averbook recalled how one HR executives he spoke to believed none of his employees were registered on Facebook. But when he demonstrated that more than 2,000 of them were actually on the site, the executive's immediate response was to ask what could be done to stop it, Averbook said.

Instead, he said, the executive should have asked how he could replicate it.

About half-way through his presentation, Averbook asked how many attendees were using Facebook to recruit potential candidates. Only a handful of the roughly 250 people in the room raised their hands.

"Employers need to go to where the people are -- and that's [sites such as] Facebook," he said.

As companies begin to pursue a digital HR -- or Web 2.0 -- strategy, Averbook said, they might want to start off with an incubator or pilot project.

"Start small, but think big," he advised, noting that it's not only "the future of technology, but it's also the future of HR technology."

Performance Management  

Key to achieving an integrated talent-management strategy is the implementation of enterprise-wide performance management, said Chris Howard, vice president of research at Bersin & Associates, at a session entitled "What You Still Need to Learn About Performance Management."  

As he reviewed the company's study of 700 HR professionals as well as vendors, he noted that performance management "is a very immature area of enterprise technology, which means there are a lot of companies doing it."  

And a growing number of organizations are looking for help from those vendor companies, he said. The research showed that the number of respondents who had a vendor solution for performance management jumped from 11 percent in 2005 to 27 percent today.  

More than one-third (36 percent) of the respondents still had paper-driven systems -- although 80 percent of them were looking at vendor solutions, Howard said. Three in 10 (31 percent) had an in-house solution and 6 percent had no solution.  

He noted that 34 percent of the survey respondents said that performance management was the HR strategy that had the highest impact on the business, followed by competency management at 31 percent, sourcing and recruiting at 27 percent, leadership development at 17 percent, learning and development at 15 percent, and both succession planning and workforce planning at 11 percent.  

"We believe it's much more than simply a one-time annual review process of your employees," he said. "From a strategic perspective, it's all about management practices."  

Enterprise-wide performance management, Howard said, goes well beyond the compliance, paper-driven performance reviews that are common in most companies, and even beyond some of the competency assessments, cascading goals and succession planning initiatives, among other things, that have been adopted by more advanced organizations.  

An enterprise-wide system, he said, involves performance management strategies that are tailored to the employee, employee groups and job roles. It moves beyond directing or motivating the employee and goes into engaging the employee.  

It will involve strategic talent planning, including having comprehensive profiles of employees and using that information to make staffing decisions for today and the future, Howard said.   

Each organization, he said, will need to determine its own priorities, however, in creating its processes -- depending upon its culture, size, global reach, industry, type of workers and maturity of the processes and the business itself.  

But the biggest barrier to implementation, he cautioned, will be "rolling it out and getting people trained."  

When looking at software solutions, he said, make sure the process fits with the company's procedures and make sure it's easy to use for the end-user.  

Relocation DrivesVolkswagen

Attendees got a concentrated, comprehensive lesson from Volkswagen and The Newman Group on how best to approach a complete cultural redirection by incorporating the right talent-management campaign.

Mike Beamish, executive vice president of human resources for Volkswagen Group of America, in his session entitled "VW Gets Very Talented to Grow 10 Times!" shared the story of his company's dramatic headquarters move from Auburn Hills, Mich., to Herndon, Va., which started in September 2007 and will end this December.

But the change has involved far more than two headquarters sites.

As part of Volkswagen's "New Vision for the U.S." campaign, it has involved a strategic relocation of 400 positions to Virginia with an additional 150 employees who were specially invited there to lead the change.

More importantly, it involved the implementation of a whole new company structure and culture that would support the 2,500-employee organization's goal to sell over 1 million cars in the United States by 2018 and eventually employ 2,000 more in its Chattanooga, Tenn., facility.

Overall objectives of the move, Beamish said, were to re-energize the company and its U.S. brands by leveraging its new corporate home; create a dynamic culture that values trust, collaboration, customer orientation, creativity and performance; create a leaner, more market-driven organization in the new location; simplify or reduce processes and support systems by focusing on the organization's core competencies; and eliminate redundancies and overcapacities in the organization.

"Collaboration was needed and communication was critical if we were to broaden in this way in the United States," Beamish said.

So was an entirely new employee profile. Employee moves weren't simply arranged. With Newman Group's help, those making the move were carefully selected through a brand new profile that combined an entirely new set of core competencies and employment-value-proposition attributes.

"It all came down to determining competencies and profiles of people who could drive the culture change Volkswagen wanted," said Ed Newman, president of the Newman Group. "Competency management is the DNA of a change of this magnitude."

Newman started by reviewing the competencies Volkswagen had in place, a list he called "fairly dated -- focused more on skills and competencies for job traits, not for corporate goals."

Using the objectives of the move as a base, core competencies went from automotive-focused skills to traits such as innovation, teamwork, customer focus, performance-driven approach and change-leadership skills. Leadership roles were redefined around leadership, management, professional status, technical and administrative.

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Once the new competency framework was in place, 14 separate focus groups were established to survey the 150 employees who would be invited to the new location and who would eventually lead the corporate change.

So far, the transition is working well and is being noticed by all corporate leaders.

"This has been a huge opportunity for us to take a step forward," Beamish said. "People used to think of HR when a problem occurred or when we introduced something that didn't make business sense, Now, the strategic direction we took is being noticed throughout, and is already driving our growth. This puts HR at Volkswagen on a new level." 

Overhauling HR Silos

In a joint session, Hewlett Packard's vice president of human resources, Laura Desjardins, and Bobby Yazdini, Saba Software's CEO, brought their shared story of HP's people-management, talent-management and career-development transformation to conference attendees at a session entitled "Hewlett Packard Puts it all Together."

In an overhaul of once-siloed HP business groups that has most recently included the acquisition of Plano, Texas-based EDS, the newly transformed HR focus called Grow@HP is "much more than learning management now," said Desjardins. "It's now much more into experiential learning in real-time."

A key element of the Grow@HP initiative, which started close to three years ago, is something HP calls "People Promise," an integrated platform that brings data into one global process and collates career frameworks throughout the Palo Alto, Calif.-based, 310,000-plus technology company.

It's no longer just about competencies and goals, Desjardins said. "We're now taking in data on people's geographical experience, business group experience, customer experience, functional experience ... . We want to start to grow people along these lines.

"Now HR is showing up in all aspects of performance evaluations," she said, "and working to tightly link career development to business strategy, integrate career development into core development processes, and "improve the succession pipeline and leadership capabilities at all HP levels."

Recruiting by Yahoo!

At a session entitled "Recruiting and Engaging Candidates: The Yahoo! Story," two Yahoo! executives -- Carol Mahoney, vice president of global talent acquisition, and Ken Cushman, director of talent acquisition technology -- walked attendees through the revamping of Yahoo!'s career site.

"Without talent," said Mahoney, "we can't be Yahoo! and we can't be competitive."

Mahoney noted that, while the Sunnyvale, Calif.-based company had a strong consumer brand, it didn't have a strong employer brand. She recalled how, when she joined Yahoo!, the company's job sites all had different designs and job listings were the first experience visitors would have with the company. 

Finding the careers site wasn't easy, she said.

Roughly two-and-a-half years ago, Mahoney said, the company decided to build a careers Web site that was "worth looking at."

As a first step, CareerXroads, a Kendall Park, N.J., consulting firm, was brought in to the evaluate the site. They found there was virtually no branding, no consistency between the different markets being served, poor functionality and a candidate experience that was lacking.

In rebranding the site, Cushman said, Yahoo! sought to create a site that provided candidates with the best possible experience to connect with Yahoo! as a place to work.

"We know we're a great place to work, but how do create a site that gets the message across?" he asked.

Eventually, Yahoo! arrived at the brand, "How BIG Can YOU Think?" with the message customized by the target market.

While others might consider rebuilding an organization's career site as a project, Yahoo! viewed it as a product, he said.

In line with that, Cushman said, Yahoo! worked to leverage some of its own technologies and capabilities to help boost the effectiveness of its careers Web site.

"We figured, why not build some of our own products into the site," he said.

Changes in HR Outsourcing

Based on the attendance and attentiveness of those who came to hear Lowell Williams, executive director of global HR services at Houston-based EquaTerra, talk about "What's Really Happening Now in HR Outsourcing?" interest and concerns in the outsourcing arena are high.

Driving the concerns are the massive changes in the global HRO market, the decisions now facing global and domestic HR leaders as they consider outsourcing solutions, and perhaps the overriding fear among many that HRO is a vanishing option.

On the contrary, said Williams, "rumors of the death of HRO have been greatly exaggerated." What providers and clients face now is a sea change.

New, powerful providers have entered the marketplace, he said. Indian providers that have long supported HR and HRIT functions are now open for business on their own.

Hexaware, through its Caliber Point brand, he said, is providing services directly in Europe and will soon in the United States. Tata Consulting is set to announce a new global HRO client and Infosys, WNS and Wipro should not be far behind.

Traditional providers have consolidated or retreated, he told the crowd, and there have been both victories and failed promises of early adopters. The key to making the right outsourcing decision for your organization, said Williams, is to keep up on the changing landscape and be realistic and accurate in spending decisions.

Using one rather telling chart showing EquaTerra's business data from the first quarter of this year, he illustrated the huge differences among HR processes -- in primarily large companies engaged in major outsourcing ventures -- between what is retained by the company and what outsourcers can really do.

HR strategy, organizational development, employee development and succession planning, for instance, showed far less outsourcing ownership -- from 10 percent to 32 percent -- and far greater company retention.

Recruiting, HRIT, benefits and payroll showed minimal company retention, from 30 percent to less than 25 percent, with outsourcers handling between about 70 percent and 75 percent of all functions.

At the bottom of the chart, employee service centers showed 95 percent in-scope outsourcing activity and absolutely no activity retained by companies.

"We're talking about the transactional activity measured by the bodies, ladies and gentlemen," said Williams. "That, right there, is the real world of outsourcing. To some, these are no-brainers. But to others, you may be surprised it breaks down this way."

Before outsourcing decisions are made and money is spent, "these are just some of the things that should be considered," he said.

Read the report from the first day of the HR Technology Conference.

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