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The first step to HR transformation: Owning the past

How assessing HR’s past efforts can lead to a better future

There’s no question that Human Resource organizations have been evolving for years and continue to do so today. What’s not as clear is who’s driving those transformations. If you think the HR department is already successfully navigating wide-scale evolutionary changes, you’d have a lot of company…but you’d be wrong in most cases. 

Rather than HR presenting an evolutionary (or revolutionary) proposal to the executive team, it’s often the C-suite that pushes human resources teams to transform and asks HR for concrete plans on how they intend to accomplish that transformation. It’s now time for HR leaders to step up and take control.

Unfortunately, over the years, many HR organizations have lost the trust of both management and employees. As a result, the business may be reluctant to let HR steer because of that trust gap. In order to move forward with transformation—and gain the support from other business leaders—HR must restore that trust. 

The first step? Own your past.

Top workforce priorities for CHROs

Maintaining organizational culture
Managing hybrid workforce
Addressing employee mental health and burnout
Addressing physical safety on site
Improving technology options for virtual teams
Providing additional benefits
Adjusting compensation
Planning for policy changes related to immigration

Q: What are your top workforce priorities for 2021?
Totals may not add up to 100% due to rounding. Source: PwC US Pulse Survey, March 12, 2021: CHRO base of 94

For a better future, learn from the past

HR executives must recognize that while many traditional HR departments did a fine job, there has been—and continues to be—significant room for improvement. If HR leaders can’t assess how well or poorly they handled previous initiatives, they won’t have a foundation on which to transform their organization. 

For one thing, HR organizations sometimes damaged employee confidence or trust because of broken processes, confusing compensation and promotion strategies, or mistakes in recruiting, development and performance reviews.  

At some companies, for example, past HR leaders may not have thought through all the steps needed to achieve successful talent acquisition, and some recruiters may not have sourced job candidates appropriately or fairly. Sadly, talent acquisition hasn’t always been objective, raising concerns about bias in hiring and promotions, which may have led to distrust of the HR organization. In fact, some HR organizations are only now beginning to prioritize their diversity and inclusion (D&I) policies. 

Another common problem has involved technology implementations. HR executives haven’t always stopped to ask, “Why are we doing this?” and “How specifically can this tech help us?” Consequently, they often ended up with a mediocre mix of off-the-shelf technologies and broken customizations. A better way forward? Consider technology that modernizes the HR function with streamlined processes and systems.

Too many HR leaders just digitize a broken process (instead of fixing it first) or move to a self-service platform (without thorough evaluations or employee input). The result? HR still has a broken process—but now the whole company knows about it because the employees have access to the technology. That leaves HR to handle complaints and explain any failures to top management, while frustrating employees in the meantime.

Rebuilding processes and trust

HR should prove itself to employees and management, but to earn that trust it has to show both competence and character. Many CHROs have made great strides in this area during the past year, as HR has been at the center of some of the most pressing workforce challenges related to the pandemic: the shift to remote and hybrid work, employee safety, workforce mental health and wellness, advancing diversity and inclusion, the creation of new benefits designed to support employees and much more. CHROs are at the heart of redesigning work.

Build on that success by taking a close look at how HR is functioning now. Consider these issues:

  • Are we nailing the foundations? For example, are our payroll processes and systems functional? Do people get the pay they are supposed to receive in a timely manner?
  • Is the hiring process fit-for-purpose, or is it overly arduous for hiring managers?
  • Is onboarding organized and effective, or does it take months for new hires to learn how to do things, get the appropriate paperwork filed and/or obtain the right technology?
  • Can HR execute effectively as it’s currently designed?

Showing competence in these basic, functional tasks is critical to build trust in the HR function. If employee trust was broken in the past, it first must be repaired before HR can start to build a more innovative and successful future. 

Likewise, if business leaders lack confidence in HR’s ability to launch meaningful initiatives, pivot if things go awry and learn from its mistakes, it will be harder to gain their buy-in on a larger transformation effort.

Actions to move forward

Focus on the employee experience: HR policies and practices like the ones mentioned above often result in stagnant, unproductive and unwelcoming company cultures. In contrast, companies with HR teams that plan strategically and innovatively — keeping their employees top of mind—are able to attract quality talent: engaged employees who enjoy their jobs and help their firms be more successful. 

Push back against unnecessary processes: Just because something is new doesn’t mean it adds value. Push back against unwanted and unnecessary processes, approaches and tech implementations—even if they’re recommended by top management. Instead, HR should ask key questions such as: Is our investment in HR balanced? Does our recruiter-per-employee ratio make sense? Should we make an investment that’s higher than the industry benchmark because we need to grow our team—or because high-touch interactions are essential to our company’s success? How can we improve the recruiting experience?

The challenge is to achieve balance in your decisions. Employees don’t necessarily want to add another bot to their devices, and many are already suffering from bot overkill and “choice anxiety.” Companies need to determine what a successful employee experience needs to be without the confusion that comes from providing too much information. 

Use AI responsibly: In an effort to free up time for its staff, many HR organizations use AI to scan resumes—some without establishing usage guidelines beforehand. AI should be used judiciously in HR applications, but many HR professionals don’t realize its limitations. While AI works well for lower-level, high-volume recruiting, it should not be used for critical positions that require an eyes-on approach. And, as always when algorithms are involved, HR must constantly check its AI system for bias and unfairness—steps that many HR professionals don’t know they should take.

Examine HR’s role and purpose: It’s especially important to get answers to these fundamental questions: What is it that we in HR do? What is our purpose? What are the priorities for this year, next year and moving forward? What do we want to be known for? And perhaps most critically: What do we not want to be known for?

A strong foundation for the future

As an HR executive, it’s essential for you to assess where your organization is now and where you want and need it to be. If HR’s current state doesn’t align with the desired future state, it’s time to make changes. The best tools for understanding your past—so you can rebuild trust and own your future—are assessment and reflection. 

HR leaders who own their past and learn from it are better prepared to take charge, earn the trust of employees and other business leaders, and move forward to a more innovative, employee-focused future.

Contact us

Justin Sturrock

Justin Sturrock

Partner, PwC Australia

Diane Youden

Diane Youden

Principal, PwC US