HR 3.0: 10 ways to accelerate the transformation of the HR function

IBM recently produced a study on the transformation of the HR function and how to accelerate it. This study was produced in collaboration with the Josh Bersin Academy, so you can expect to find in it the essence of Bersin’s reflections, which, as a common marketing practice in the software industry, only serve as a pretext for the vendor to speak out.

I will therefore begin with an overview of the study before commenting on it.

  • HR reinvention is underway
  • 10 axis to transform HR
  • The fine line between research and marketing content
  • The manifesto of the obvious
  • Key areas of focus
  • Sweet dreams
  • A certain lack of ambition
  • Conclusion

HR reinvention is underway

The study’s starting point is that after having been essentially administrative since its inception, the HR function plays an increasingly important role in the business dimension of companies.

Today there are three types of HR departments:

  • HR 1.0: focused on compliance, administration and process efficiency.
  • HR 2.0: integrated centers of excellence focused on empowering and training business players to deliver solutions where they are needed.
  • HR 3.0: represent less than 10% of organizations, transforming the HR function into an agile consulting entity that provides services to the business and uses design thinking to deliver solutions.

According to the report, the good news is that this transformation is within everyone’s reach because ” the disciplines of design thinking, the use of highly intelligent cognitive tools, and a focus on transparency, inclusion, and change are all goals you can achieve“.

The conclusion :

  • Humanity is at the heart of the cognitive enterprise: while companies must transform themselves under the impact of “global disruptions“, new business models and new technologies, it has never been more important to increase the skills of employees.
  • HR 3.0 is a business imperative: executives all agree that the HR function needs to be reinvented. “Guiding principles of personalization, skills at the core, data-driven decision-making, transparency and agility are at the core of the journey to HR 3.0“.
  • The best companies are already embarking on audacious programs that help to identify 10 major areas for HR function transformation

And these 10 axis are :

10 axis to transform HR

1 – Measure employee performance continuously and transparently

Why ?

A constantly changing environment requires continuous and transparent feedback and measurements to be able to adjust in real time.

How ?

Set up a permanent feedback system, transparent and shared objectives, use analytics to link development initiatives to their results (doesn’t that remind you of the “disconnect” between HRTech and WorkTech?).

2 – Invest in the new role of leadership

Why ?

Today’s leadership is now based on collaboration, listening and the ability to act in uncertainty. The behaviour of leaders must be characterized by agility, communication and adaptability.

How ?

Invest in the development of leaders, use artificial intelligence to detect new leaders, strengthen transparency through continuous dialogue.

3 – Build up—and apply— capabilities in agile practices and design thinking

Why ?

In order to respond to external changes, companies need speed and iteration, which is no longer the case with waterfall projects.

How ?

Train HR in design thinking, build trust by co-creating solutions with employees, implement solutions iteratively and improve them through user feedback.

4 – Pay for performance —and skills—in a fair and transparent way

Why ?

Today’s generation demands transparency and fairness in compensation systems.

How ?

Establish objectives in terms of transparency in line with the company’s values, use artificial intelligence to identify biases and compensation gaps, value the acquisition of critical skills at market value.

5 – Continuously build skills in the flow of work

Why ?

The action of learning can no longer only take place episodically over dedicated time but also occur “in the flow of work”, when necessary, while the employee is working.

How ?

Increase the visibility of today’s existing skills, use digital and AI to create personalized learning experiences for everyone, promote a culture of continuous learning that rewards the acquisition of skills.

6 – Design intentional experiences for employees

Why ?

A good employee experience should not be sporadic or accidental, but the result of a program that is continually developed and improved. These experiences must be meaningful, simple and consistent.

How ?

Use analytics to listen to the voice of employees, design employee experiences

7 – Modernize your HR technology portfolio

Why ?

In HR 3.0, experience takes precedence over process excellence and HR technologies must evolve accordingly, including a common enterprise-wide HR data architecture.

How ?

Move HR systems to the Cloud, use Artificial Intelligence to improve the HR experience, develop Data, Machine Learning and AI skills in HR.

8 – Apply data-driven insights

Why ?

Data enables HR to make fact-based decisions in line with corporate strategy. The use of internal and external data enables better decisions to be made.

How ?

Take into account data external to the company for a 360° knowledge of the workforce, invest in AI to decipher this data, use this data to improve the performance of individuals and of the organization.

9 – Reorient and reskill HR Business Partners as strategic advisors

Why ?

From now on, the HR Business Partner must exclusively take on an advisory role for senior managers.

How ?

Rethinking the role of the HR Business Partner as a strategic advisor, developing business and industry knowledge among HRBPs, strengthening the relationship between HRBPs and business management to demonstrate their value.

10 – Source new talent strategically

Why ?

At a time when talent has never been more important, it must be sourced both pertinently and very quickly.

How ?

Create personalized candidate experiences to engage and lure top talent, define and implement a strong employer brand aligned with corporate strategy, use AI ethically to build a diverse, flexible and adaptable workforce.

This is a very quick summary of the report that you can download to have something more complete and detailed.

Now this is what inspires me.

The fine line between research and marketing content

The first thing to keep in mind when reading a study of this type is that its vocation is not ( only ) to inform you but to promote products or services. No study is devoid of ulterior motives.

When Bersin (or other) publishes a study under its name it is a marketing action to make its brand, its offer and sell its services. I hope that everyone has understood this. It’s a normal marketing practice that has nothing to criticize but we must be aware of it.

When Bersin or someone else lends his pen to a vendor (in this case IBM but it could be any vendor) it is not free for the vendor and therefore it must be useful to him at the marketing level.

In other words, don’t expect the study to focus on something the vendor doesn’t know how to do, a product they don’t offer, or an area where their competitors outperform them.

IBM is present on the HR market, but with the will to differentiate itself on the IA and Analytics dimension. There is no need to ask why the concept of the cognitive enterprise bursts into the landscape and why there is AI at every stage of the recommendations.

Again, this is a completely normal practice, but you have to be aware of it, that’s all.

If Bersin had written for SAP or Oracle he would certainly have put the emphasis on other topics, which is not to say that the AI talk is unfounded and only exists to please IBM. Just maybe the others have other things to emphasize: this kind of study never lies because it engages the credibility of its author, it simply focuses on different topics depending on the sponsor.

Once these clarifications have been made, we can get to the heart of the matter.

The manifesto of the obvious

Unless we have just reconverted you to HR after a career in catering or plumbing, I don’t think you’ll be surprised by any of the proposed areas: we’re in the realm of the obvious.

So I agree it’s better when it is said and the only fact that there is still “HR 1.0” is proof that there is still work to be done to make the profession aware of “HR 3.0”.

But in all honesty I always manage to find in this kind of document a salient point that surprises me, which I would not have thought of, or on the contrary a controversial point with which I disagree.

Here none of that. Everything is indisputable and does not lend itself to criticism. But in fact, it’s even too conventional and flat. To take just the point on recruitment, it is appallingly flat and I am not talking about the new role of leaders

And then let’s talk about the very term HR 3.0, which for me smells good the 2000s, but is just an old-fashioned marketing trick. Already because we are far from having reached “2.0” in a uniform way. Then because if Web 2.0 was a reality, if Enterprise 2.0 made sense, going further in this direction is a gimmick. At best it just makes you realize just how far behind the HR world is compared to the “old” world of manufacturing, which has long since moved to “Industry 4.0“.

Key areas of focus

However, there are a few major areas that should capture our full attention. I have identified some of them in no order of priority.

Let’s start, since we have already talked about it, with the data/IA/Analytics dimension. Of course it is better to make decisions based on data than on intuition but that is not my point. Before we get to that point, there is an urgent need to instill a real data culture in the HR world, which is an essential prerequisite.

As long as we’re talking about data, the subject of modernizing the application portfolio comes up. I won’t dwell on the move to the cloud, which is a no-brainer, but on an enterprise-wide data infrastructure. And I’ll go even further. In a previous article I was talking about the disconnect between “HRTech” and “WorkTech” and this may be the time to address the problem by including non-HR data (business data) in the scope of data used by HR.

Another key issue is the transition to an agile culture! This is a major challenge in a world where speed is paramount, where things are constantly changing and where you have to adapt continuously and, therefore, where the good old waterfall approach is totally outdated. But we will see that really implementing agility in co-construction with employees is anything but easy.

I will finish with the HR Business Partners, which if they are an excellent idea at the beginning, often turn out to be a joke and therefore need to be reformed. And I’m not sure that giving them a business culture is enough. On the contrary, as with employee experience, I think we should take the issue the other way around and give this role to business people who have an HR sensitivity (which can be improved) rather than HR people to whom one could try to give a business sensitivity.

Moreover, doesn’t the mere fact that the HRBP exists reflect a deeper problem in the culture of the function? A function that indulges in, whatever it may say, its role as a support function and is reluctant to move to the business side. After all, has finance created a position of “Finance Business Partner”?

I also like the idea of paying at market value, which I see happening in some companies by the way. Today, from the moment you enter a company, you see your value on the internal scale being de-corrected from your value on the market and progressing much more slowly. The result is that at some point an employee will change employer simply to make up for this delay because it is easier to negotiate a hiring than to get a raise. And it seems like nothing, it ruins the whole talent development policy since talents are developed for the benefit of competitors.

Sweet dreams

I won’t elaborate on the HR Business Partner, which is, in my opinion, the result of a cultural misconception from the start.

I’m thinking here of transparency on compensation. Yes for fairness, but transparency is another debate. It’s one thing to make the mechanisms for determining remuneration transparent, but making everything transparent can be highly problematic. There are inevitable inequalities linked to contextual elements. They are inevitable but it is not always good (question of country culture or company culture) to open the Pandora’s box. For example, two employees in the same position may find themselves at a given time with different salaries because one was recruited in a period of crisis and the other in a period of high tension on the market. This is balanced over time, but at a given moment the gap may exist.

And whoever says transparency on remuneration logically says transparency on objectives, and this is a subject I talked about at length recently with another HRIS solution provider about OKRs. We came to the conclusion that transparency at the level of individual and collective objectives did not pose too many problems…. and still. On the other hand, transparency at the level of individual achievement of objectives is a real issue and the answer differs radically from one culture to another. From this point on, it is not easy to talk about transparency of remuneration when it is not possible to talk about the achievement of objectives.

A certain lack of ambition

But there are things that this study doesn’t say, or not very loudly, and that’s too bad.

I’m going to start, once again, with the convergence between HRTech and WorkTech, which I believe is a major challenge for the years to come. It’s both a matter of employee experience (disruption of information and work flows) and the quality of data and HR decisions.

Once this subject has been raised, the next natural corollary follows: the managerial information system. Today we have an HRIS that serves HR and sometimes requires a strong contribution from managers who don’t get much out of it. We need them to keep it alive, but in their role they derive relatively little value from it. The convergence between HRTech and WorkTech should be used to provide value to managers by combining HR and business data.

Finally comes the question of a true “employee service” like we have a customer service, an indispensable pillar of an employee experience worthy of the name. And that really surprises me.

Indeed the study tells us that pulse surveys are an element of HR 3.0 but what do we do once we have the information? You have to act and have a service commitment (SLA type) towards the employee. This is all the more astonishing since Bersin talked about ” Continuous response “ not so long before. Lack of memory?

Conclusion

A study that has the merit of existing and saying things that everyone knows but with a Bersin/IBM ” stamp ” that makes things audible to some decision-makers looking for reassurance.

But a study that is worth more for what it doesn’t say or suggest than for what it says.

Image : escalator by  NJ_Cyn via shutterstock

Bertrand DUPERRINhttps://www.duperrin.com/english
Head of Employee and Client Experience @Emakina / Former consulting director / Crossroads of people, business and technology / Speaker / Compulsive traveler
Head of Employee and Client Experience @Emakina / Former consulting director / Crossroads of people, business and technology / Speaker / Compulsive traveler
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