THE HR IMPACT ANALYSIS

Human Resources Manager, August / September 2012

The HR function has struggled to gain more influence within the company for as long as we can remember. With our model, we will show how this can be improved – from the strategy discussion to the organizational development of the HR function.

Market

• What are the trends in the various markets we are doing business in? 
E.g.: political developments, changes in legislation etc.
• How has our business developed – market shares, revenues, profit?
• How is our company positioned in the market?
• How are our competitors doing? What are their key strengths?

Organization

• Are the responsibilities in the organization clearly allotted?
• Are there any plans for new facilities or acquisitions?
• What products are planned to be launched and what is the schedule?
• Are there any plans to outsource activities?
• How high is the commitment of the employees in your department? 
How do you measure it? (e.g. by an employee survey)

People

HR is in possession of the data for these questions. Nevertheless, the answers should be discussed.

• How many open positions are there? What is the candidate pipeline per position?
• What does our succession planning look like? What backups do we have for key positions? Who are the high potentials?
• How do you rate the competence, experience, qualification of our employees compared to our competitors?
• How do you assess the performance of the senior executives? How do we measure their performance?
  
  

Deriving HR measures

Now, the responsible HR managers have to find answers to the challenges the business is facing.

Every single item in the matrix is examined with respect to the contribution HR can make in this area. The discussion of the topic ‘new business markets’ aims for instance at finding out whether the employees have sufficient know-how in these markets to assess if there are sufficient competent candidates in the target market or whether it is necessary to work with expats.

When business priorities are discussed, this will frequently include topics in which at first glance no HR activities seem to be required. With the following example, we would like to show that in these cases as well, HR implications may be hiding under the surface. The following is a fictitious discussion between an HR business partner and a managing director:

HR: You mentioned in our discussion that in Latin America we have a competitive disadvantage to the main competitor. What do you base this statement on?

MD: Their sales growth is simply considerably higher than ours.

HR: I am sure you have analyzed the reasons for this?

MD: Sure. Essentially, our main competitor launches its products considerably faster than we do.

HR: Is this due to the competitor’s better ideas or to the fact that they just work faster?

MD: We have great ideas as well, mostly even better ones, and often even before the competitor, but our products are simply launched too late!

HR: What is the reason for coming in later?

MD: Our projects are frequently subject to delays.

HR: What causes these delays?

MD: The transitions between the various phases in the development project take too much time. Employees want to be perfect. We have been trying to optimize the process for a long time – without any success so far.

HR: It is not a bad thing when employees strive for quality. What exactly is the problem?

MD: The employees simply want everything to be perfect – always. Our company stands for quality, and I cannot change this culture.

HR: It is important to fulfil our quality standards. However, to be successful, we will have to be faster – have I understood this correctly?

MD: Exactly.

HR: In a perfectionist culture, employees often are reluctant to take decisions, even when the specifications have been met. If these are not detailed, the problem is aggravated.

MD: I have not seen it from that perspective. Can you help us there?

HR: Yes, gladly. I will let you have a suggestion within the next few days.

MD: Great!

The dialog partners discover the core of the problem through persistent questions. Prerequisites are that the HR manager understands cause and effect in the business context, does not let up easily and sees himself as a genuine partner of his managing director.

Of course, HR will in the end not always be able to solve the issue or play a central role in it. But without HR, it will often not be resolved at all.

In our example, the next step is to initiate a project in which the company culture is analyzed on the basis of an employee survey. The responsible managers will use the results to decide which concrete measures will be taken.