Investing in HR Careers Through the Crisis

There is a danger in the current environment that we stop investing in the careers of our HR people. Research from the last recession in 2008 by McKinsey showed that successful organisations continued to invest in long term skills whilst taking tough short-term decisions. These so called ‘resilients’ delivered TSR growth 150 points above ‘nonresilients’. Is there a lesson for HR today? We need to make the tough calls to survive but we must continue to invest in what really matters to make HR resilient and ensure we thrive in the future.

Careers in Chaos

The uncertainty of the current crisis has increased individual career insecurity, but the old order and predictability associated with the traditional career hasn’t been the norm for years. HR careers have changed from a formal towards a more market-driven focus. Indeed the concept of what a career looks like has changed – not only in HR but more generally – from a traditional, predictable ladder, where individuals followed a career path within one function and where career moves were primarily vertical, to something more chaotic based on unpredictable opportunities, networking and personal reputation building. Our traditional understanding of the career as a series of upward moves, with increasing income, status and security within a functional area and often within a single organisation, has been challenged. New ways of thinking about careers suggest that lateral and horizontal movement has become more commonplace and a wider variety of alternatives exist in place of traditional routes.

Faced with this more chaotic HR career context and greater individual mobility, what can organisations do to build HR capability, beyond fishing in an ever-smaller pool? In the face of increased job insecurity and narrowing promotion opportunities, employment relations now take the form of a personal, transactional contract in which the individual seeks personal development in return for individual employability. This raises interesting issues for the nature of the career, promotion, training and development opportunities provided by organisations. Whilst it is realistic to expect the individual to take greater control over their careers, is there a danger that this encourages the best HR professionals to become more self-reliant and liable to move organisations? The psychological contract has changed, so what can organisations do to keep up their side of the bargain or risk losing their best people?

Research shows that the critical success factor that differentiates the successful HR functions, in terms of developing their capability and individual career offer, is their long-term ethos and focus on sustaining their investment until it really bears fruit. This ethos is one of investing in the development of the function rather than simply leaving it up to market forces or individual initiative. Where there is a commitment to developing the capability of the function that is sustained across the economic cycle and linked strongly to a future vision of what the organisation requires from HR, we see much stronger evidence that they are building sustained and effective HR capabilities.

It is easier to invest in developing HR in larger organisations, where there is a greater depth of experiential growth opportunities and more room (and budget) for learning and personal growth. On the other hand there is greater potential exposure for HR professionals in smaller organisations since there are greater opportunities to operate across the full breadth of HR activities. The disaggregation of HR in many large organisations into Business Partners, Shared Services and Centres of Excellence is creating a challenge in developing both breadth and depth. In the old model HR generalists by definition had a broad skill set balanced with the need, as the HR contact point, to have sufficient depth of expertise in the areas where their partners depended on them for advice. In our current model there is a danger that HRBPs lack depth whilst the specialists lack breadth, resulting in ‘stovepipe’ careers, where people reach the level just below the top lacking a key driver of their success as an HRD. The challenge in developing our people is to create experiential opportunities to develop depth and breadth.

The pressure on HR development is also growing as the function downsizes and the focus on productivity increases. There is therefore an ever-growing struggle to fund development of the function itself and to find the slack to allow people to learn and grow when the pressure on them to deliver is increasing. Indeed, the current crisis has brought the requirement for a different, more commercial, more situationally-relevant HR capability to the surface as organisations’ need for long-term HR policies and processes has been replaced by the need for a more agile response to help organisations survive today but also reset and build the capability to thrive in a totally unpredictable future.

So supporting HR career development is a set of paradoxes:

• More pressure on HR to deliver therefore no time to develop HR
• Need for greater capability in HR vs. Laissez-faire approach to career development
• The balance between individual and organisational needs
• Moving people to develop them vs. disruption to organisational continuity and building contextual understanding
• Business partners vs. experts
• Specialism vs. proximity to the organisation
• Strategic vs. operational
• Need for commercialism vs. HR professionalism
• Developing key non-HR skills especially commercial awareness vs. developing HR specialisms

This raises a fundamental question: does one size fit all? We believe that the key in answering many of these paradoxes is to define the capabilities against organisational needs rather than a generic model. In fact, we observe that not enough organisations are using this situationally dependent approach, with the result that they are not seeing the return on their investment and questions are being raised as to why HR is spending time and money on itself when it is perceived to be offering a less effective service relevant to the needs of its customers.

• Do you have, and have you sustained, this long-term commitment to developing the function and the individuals within it?
• How much time are you spending creating the system conditions, especially securing your CEO’s support, to generate the investment in HR capability-building?
• Are you creating experiential opportunities to develop depth and breadth?
• Are you managing these pressures to create time and space for people to learn and improve?
• Have you spent time upfront really understanding what you are trying to develop?
• Are you balancing developing strategic skills with building the fundamental underpinnings of HR?
• Are you developing an approach to career development that matches the future needs of the function in your specific organisation?

https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/bubbles-pop-downturns-stop

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