Thank you to those of you who commented on my previous post on this topic. Continuing this theme with one last look back to some of the lasting impacts of the 2008-2009 recession on the HR function, I offer three additional perspectives:

4) We became more process-oriented.

With the reduction in funds for new capital investments, organizations started looking closer at what they already had in place and how they could improve on it. While the vast majority of companies have systems in place for core HR, Benefits, and Payroll, most started looking at what additional processes could be automated or self-service-enabled in order to gain efficiencies and effectiveness, but mostly to reduce costs. Moving from transaction-oriented, organizations today are becoming process-oriented, meaning they are taking a holistic view of business activity and integrating processes across functions, such as pay-for-performance, development and succession planning, and staffing and workforce planning. While we still have ways to go, there is a definite movement toward process-oriented HR.

5) We became more talent-focused.

Talent Management has been the fastest growing area in the HR space for the last several years. Organizations are finally executing on what they have long maintained, that people are the most important asset. Gartner’s Jim Holincheck at IHRIM’s Global Forum in Chicago this past year reported that Talent Management grew ~7% through Q2 of 2009 while core HRMS revenues grew just ~4.5%. Clearly the HRMS market has matured while talent management is still in its infancy, but there is a definitive movement toward a more talent-focused HR approach and there will be no turning back. With a talent-focused approach, HR moves another step closer to becoming that elusive HR business partner.

6) We became more business-centric.

The successful HR professional today, post-recession, is a hybrid developed out of varied experiences who realizes the need to be business-centric, metrics-minded, systems-savvy. While many HR professionals may be stuck in an administrative quagmire, unable to focus on more strategic issues due to a lack of tools and strategies to eliminate and automate much of the administrative backbone of HR, there are few who don’t realize the importance of business knowledge and financial acumen to be a successful strategic partner to the business. Business-centric means understanding the role that HR strategies and services play in driving business growth — sales, revenues, and profits.

Other ideas?  What do you think has changed forever for HR as a result of the last two tumultuous years? I’d love to hear from you!

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• 50-65% of CEO’s and executives feel that talent management is at the top of their list of concerns; yet 2/3 of employers have no plans in place to do anything about it.
• Long-term planning for talent management does not make sense; because of the dynamic nature of business, and the rapidly changing competencies (knowledge, skills, abilities, aptitudes, etc.) required to meet today’s needs and those in the short to mid-term. Who knows what competencies will be required 10 years out — when most employer business plans only extend 1-5 years out?

An interesting conundrum to say the least. How do we reconcile this paradox of being strategic partners supporting the business long-term goals but without the crystal ball to see into the future? Please share your thoughts on how you’re resolving this dilemma.

Thanks, Paul, for pointing this out to all of us!

Few would argue that we live in a global world. Yet, exactly what we mean by “global” varies widely depending on whom you are talking to and what you are talking about. Globalization can mean simply that a company has offices outside their home country and sells their products and services in other countries. There may be little communication or sharing across these offices, but the company is operating globally nonetheless. On the other hand, globalization can mean that a company offers one global service or product to the world, and each of the country offices serve as conduits to the local market. And, of course, global can also mean anything along the continuum between these two extremes.

Likewise, few would argue against the assertion that the world is becoming increasingly more global. Yet there is a growing awareness of greater instability and uncertainty in the world than ever before. The current financial crises with subprime interests rates in the U.S., the political instability in the Middle East and Asia, the growing imbalances between the rich and poor, and global warming are some of the factors affecting our world and causing some retrenchment – some people might even say breakdown – in globalization.

According to Pankaj Ghemawat, global strategist, Harvard professor, speaker, and author, too many people are spouting off about the flattening of the world, the death of distance and the disappearance of differences across countries. These rantings are what Ghemawat calls “globaloney” – the illusion of a borderless, flat world and hence the tendency to overestimate the extent of and process of globalization. The fact is that most economic activity – including direct investment, tourism, and communication – happens locally, not internationally. In addition, the differences across countries and cultures are larger than many people realize. Ghemawat goes on to explain that in our “semi-globalized” world, one-size-fits-all strategies don’t stand a chance. Instead, companies must expect cross-border differences and be able to reconcile the discrepancies in a way that makes sense for them based on their culture, business goals, and current state of international development.

The problem is that globalization isn’t easy – in fact it’s downright complicated. Cross-border integration, various languages, multi-cultural communication, diverse people, organizations, and business practices make understanding and managing the process of globalization a difficult task – difficult, but not insurmountable. To be successful we have to think about globalization as a process – a journey to a final destination of complete cross-border integration that we may never reach, or not reach within this century. So the questions we should be asking ourselves is how global should we be? What are the important areas of the HR function to make global and what areas should be left local or regional? How do we reconcile the seemingly paradoxical differences across countries and businesses?

Ghemawat offers an approach he calls the AAA Triangle which focuses on strategies optimized for adaptation (adjusting to differences), aggregation (overcoming differences), and arbitrage (exploiting differences). The three A’s represent three distinct types of global strategy that companies can pursue. Adaptation seeks to improve performance by maximizing the company’s local presence. Aggregation is a way for companies to expand beyond their home country, delivering economies of scale by emphasizing regional and global operations; this involves standardizing product and service offerings and grouping together development and production processes. Finally, Arbitrage is the exploitation of differences between national and regional markets, often by shifting separate parts of the operations in different places, for example, call centers in India, manufacturing plants in China, and research and development offices in Poland.

What is your company’s global strategy? What are you doing in HR to support it?