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Vin Lucas, the human resources director for Schweppes Australia, manages the company’s 1800 employees, with 25 reports who help him with the job.
In many ways, Lucas illustrates all that is changing within the human resources profession.
For example, Lucas meets every quarter with every other member of the Schweppes C-suite – the chief financial officer, the chief information officer, the director of communications, director of science and technology, and the head of supply chain among them.
Lucas is a key contributor to every operational element of the business. “I have an HR forum with every one of those functions every quarter, so we understand their needs and how to support them short-term and mid-term – up to three years. I also have an IT relationship person who meets with IT monthly.”
His job is to help leaders lead as much as to help the whole 1800-member staff to be effective in their roles. And this approach is part of a global change, a new survey has found.
Helping leaders develop their skills is ranked as the second most urgent issue by HR professionals in a survey by the Boston Consulting Group, called Creating People Advantage 2012, due for release on Monday. The survey collates 4,288 responses from 102 countries, 88% of them HR executives, and also includes 63 interviews with executives, both in HR and in other roles.
The transactional functions of HR that were once a big part of the job – managing personnel, contracts, payroll and training – are still part of the business of the HR department, but the strategic role is becoming a greater part of the best HR departments.
Lucas has restructured the HR function at Schweppes to get the transactional activities as automated as possible, and then to create case managers for business issues, and a group dedicated to HR planning. “We are doing less of the hand-holding,” he says.
Former general manager of HR at Coles supermarkets, Martin Nally, says the best HR departments are now helping leaders to be better at what they do. “If the HR group can encourage leaders to behave in certain ways, it can have a profound effect on performance of a company,” Nally says. “For example, if people don’t have role clarity, HR says to managers, ‘It is your role to help people to know what is expected of them, and to get them to author and know their role’.”
GM Holden’s executive director of HR, Mark Polglaze, says the focus is on strategy and business results. “Everything we do is about looking for a business result, so you are not doing HR for the sake of HR,” he told LeadingCompany recently. “That doesn’t mean we don’t talk about employee engagement or being a workplace of choice, but we talk about that in the context that these things drive an outcome for the business.”
Nally says there are some “sparkling examples” of organisations that take the management of their people seriously; but there are many that do not. “Unless HR has a business focus they will always be in the wilderness. In the 80s, an industrial relations commissioner was quoted as saying he didn’t think enterprise bargaining would work because management isn't not mature enough. I am not sure anything has changed.”
Lee Scales, executive manager of people and development at Unisuper, says she is fortunate to have a CEO who “gets it”. “Others might keep HR in their box,” she says. “And HR are their own worst enemy. They go down the road of initiative overload in an effort to get under the nose of the CEOs.”
It doesn’t work. HR initiatives that are not tied to business outcomes are seen as a cost, and are cut at the first sign of financial pressures (often to the relief of the staff members who have had to endure them).
CEOs must also take some of the blame for ineffective HR departments; they need to provide their HR leaders with more operational experience, says Nally.
Andrea Hayden, director of human resources for technology company, Attachmate Asia Pacific, doesn’t wait to be told by her CEO to get onto the front line, however.
“The real key for me is to get out with the businesspeople,” Hayden, who has a degree in psychology and economics, told LeadingCompany last month. “I spent a few years working for Tabcorp. We had a dummy games room and I spent a day playing the machines, getting a feel for what punters look for, and then going on the road with the pokie technicians. What do they face? It is about spending time in the business with the front line.”
Hayden worked in retail and general office roles before picking up an HR role.
Polglaze, who has a psychology degree, worked in workers’ compensation for an insurer before persuading an employer to give him a job in HR.
Scales worked in a variety of roles at the National Australia Bank before taking up human resources, and branded herself as a “people person” and a “change leader” rather than an HR professional.
For leading companies, HR is inextricably linked with industrial relations. Both Polglaze and Lucas manage unionised workforces and have managed industrial action.
Lucas, who studied HR and did a business degree, developed a keen interest in industrial relations. “I spent 10 to 15 years working in supply chain in industry – trying to modernise the manufacturing workforce – and in workplace reform.
“The challenge is to create a connection with workplaces, engaging with people to get the best out of them. Industrial relations in Australia is described as hard. It saddens me that employees, employers and unions can’t come together to be more futuristic in their thinking; it is more about protecting the past than possibilities for the future.”
Lucas has no aspirations to climb into the top job, but Polglaze would like to be a CEO one day. As the HR role becomes more entrenched in the executive suite, opportunities for HR directors to become chief executives are increasing. When GM Holden’s chair and managing director, Mike Devereux, is away, Polglaze is one of the executives who acts in the top leadership role.
The future of human resources
BCG’s report found that HR executives are not really abreast of some impending issues. Their survey respondents ranked of “low current and future importance” such issues as:
But all the HR executives LeadingCompany spoke to for this story are well abreast of the issues. Lucas is already automating and outsourcing transactional HR functions, and Polglaze believes globalised shared services and people management is on the increase as “not many subsidiaries do it well”, and says widespread outsourcing is just around the corner.