What challenges for HR in 2012 ?

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Summary : At the dawn of a year that’s expected to be rather difficult, businesses face conflictual choices. On the one hand there are the traditional formula to get prepared for the impact, on the other hand there’s the feeling that anticipating the shock won’t be enough and preparing to get beyond may be a better solution. Withe the same causes producing the same effects, keeping the same structures and functioning models while cycles are getting shorter and the need to adapt to fast transitions may be a dangerous option and rethinking the organizational whole a tempting one. What options will CHROs chose in 2012 ? A recent survey shows that indecision and even contradictory choices prevail. But, beyond the words, vital choices will have to be made. Jack Welsh once said :”When the rate of change outside exceeds the rate of change inside, the end is in sight”. Will he be heard ?

Businesses are facing a paradoxical and challenging equation for 2012. On the one hand the crisis make them wonder about the future and how to have as little exposure as possible to what looks like a major threat. This usually make them freeze their projects and get rid of anything that may load them down when the shock will happen. But, in the other hand, there’s the feeling that this time things will be different. That the old formulas won’t work anymore. That if they content themselves with absorbing the shock, saying to themselves they’ll restart and recover after…they may not restart at all. That, beyond the economic crisis, there’s a crisis of management and organization models that caused the eratic behaviors that lead us to the point we’re now.

So there’s at the same time the reflex of keeping quiet, still and the feeling that a new way to recovery has to be found. Even the idea that there may be other ways to anticipate the shock. So the question is to know how businesses in general and HR in particular will manage this apparent contradiction. I found some pieces of answer in a survey made by TNS-Sofres for CSC in 8 countries.

Four main points

• Attracting and retaining talents is less important than one year ago (76% vs 80%)

• Training and education budgets will be downsized by 34% respondents

• Organization transformation is the new priority (80%)

• Less hirings and more downsizing.

In addition, 78% of CHROs think that CEOs expect them to focus on management effectiveness, 59% on the role of middle managers. The importance of a good social context and strengthening connections between people is mentioned by 64% of respondents.

So, what does it mean ?

The trio made of organization transformation, management effectiveness and role of middle managers is coherent and suggest that businesses have chosen to adapt instead of passively wait to absorb the impact. But to adapt to chat ? Beyond these nice sentences there are two options : adopting a “safety posture” like for an emergency landing or re-learning to fly.

If the second option is chosen, it’s worrying to see less budget for training and education. Not all change management programs need it but it matters for all people what will see their job evolve, change. Do the word “transformation” mean that more resources will be allocated to change management ? Possible but not sure at all. A big mistake would be to focus on the structure and overlook people, to tackle process related issues without transforming them. Thinking that human change follows organization one is a mistake. People and organizations change together, one another. People may even lead organization change, but organization change alone won’t change people.

On the other hand, if the purpose is to adopt a model based on agility, resilience, a more organic form of organization, the future may look more promising. With what’s expected for 2012, faster market transitions and shorter cycles, crisis or not, it’s essential to adopt agile and resilient models. As a matter offer that’s the lack of agility and resilience that will turn any end of cycle into a crisis rather than into a new cycle because of the time needed to accept the end of a well-known and mastered situation and imagine the future under the angle of new opportunities instead of loss.

The structural inability to keep up with the pace of the knowledge economy then of the digital economy made businesses look for their growth on financial market rather than operational excellence and innovative business models. We all know the result.

As Jack Welsh said : “When the rate of change outside exceeds the rate of change inside, the end is in sight”

So what ? Toward more rigid organizations with less living matter to face the shock or more agile or resilient ones to go beyond it ?

Future will tell