Saturday, May 12, 2012

Make Sure You're Spending Your Time Wisely

HR professionals tell me that while they are intrigued by the idea and promise of HR's strategic potential, their 100-hour weeks just don't have room for much of that.

The way HR spends its time tells us about its evolution and effectiveness. Since 1995, the Center for Effective Organizations has conducted the "Achieving Excellence in the HR Function" study.

HR leaders were asked to allocate 100 percentage points across several HR activities. We have results every three years since 1995, covering strong and weak economic activity, and several eras of HR evolution. In every year the percentages are very similar, with "maintaining records" receiving about 14 percent, "auditing/controlling" at 12 percent, "human resource service provider" at about 30 percent, "development of HR systems and practices" at 17 percent and "strategic business partner" at about 25 percent. Perhaps HR has changed in 15 years, but the data suggest that how HR leaders spend their time is remarkably similar. The difference in the surveys is never more than one or two percentage points.

Every year, we also ask HR leaders to recall how they spent their time five years before the present survey. Again, the results in every survey since 1995 have been within two percentage points. However, the estimated percentages show a different pattern when HR leaders are recalling five years earlier versus their current estimates. Five to seven years ago, they always recall "maintaining records" at about 23 percent, "auditing/controlling" at about 16 percent, "human resource service provider" at about 33 percent, "development of HR systems and practices" at about 14 percent and "strategic business partner" receiving about 14 percent. HR leaders recall evolving away from administration toward strategic partnership. Yet, the data suggests that things haven't changed. For talent managers this means efforts to promote HR strategy still face an uphill battle if the time allotted to strategy is not sufficient.

Is 25 percent of time on strategic partnership enough, or do those who spend more time achieve better results? Certainly, the answer will vary, but our data suggests that spending more time on strategy seems to lead to greater HR and organization success. We examined three outcomes: HR's strategic role, HR effectiveness and organizational performance. HR's role in strategy was measured this way: 1=HR plays no role in business strategy; 2=HR is involved in implementing the business strategy; 3=HR provides input to the business strategy and helps implement it; 4=HR is a full partner in developing and implementing the business strategy. HR effectiveness reflects ratings on 11 questions about different HR goals such as change management and cost effectiveness. Finally, organizational performance reflects a question on how the organization has performed on its strategic goals relative to its peers.

The pattern is again consistent across all three outcomes. Time spent maintaining records, auditing/controlling and providing HR services are all negatively correlated with all three outcomes. Time spent developing HR systems and practices is slightly positively associated with the three outcomes. Time spent on strategic partnership is strongly and positively associated with all three outcomes. The implication is that HR organizations that spend less time on activities other than strategic partnership and more time on strategic partnership also report a stronger strategic role, greater internal HR functional effectiveness and even greater overall strategic organizational performance.

Through activities such as being a member of the management team, being involved with strategic HR planning, organizational design and strategic change in the day-to-day work of our profession, can we hope for anything to change? Perhaps a return to a simple, old school tool of time tracking may prove enlightening. Gather some data on how your HR professionals spend their time. If you are like the companies in this study, you may find the answer has barely changed in decades, and it matters for many of your key outcomes.

By John Boudreau | Talent Management [About the Author: John Boudreau is professor and research director at the University of Southern California's Marshall School of Business and Center for Effective Organizations