Is your Human Resources team losing you money?

HR transformation isn’t a project any more – it’s a division that’s constantly looking to evolve itself to suit the needs of the business.

Many organisations are starting to realise there is a lot of transactional activity which could be dealt with in a better way, and enable HR staff to focus on the more value adding, customer-centric activity.

More is being demanded of HR as a function; both in the retention and development of talent, and the relationship with new outsource vendors. Many of the challenges currently stem from systems in place that aren’t always ready for change.

In a recent chat with Grant Baker, General Manager of People and Culture in Shared Services at Energy Australia, he raised some interesting comparisons to share around the area of talent: “If you take the top 200 employees within the company, they’re worth around $58 million dollars. Let’s just imagine for a second that figure was in a share portfolio. You’d expect a lot of robust reporting. Just because it’s humans they don’t seem to have the same value.”

Where to focus

To focus on learning, development and retention, HR will need to improve policy and processes, making self-service accessible – enabling managers to do more and reduce the traffic that comes into the HR function.

This gives HR time to look at what is core to the things which are essential to the business. Enhancing the learning and development offering is a great example – at Energy Australia they’ve been really clear on their approach to broader talent management. Grant explained the wider impact on the team: “HR doesn’t have to be the huge team it used to be; we used to have business partners doing work which could or should have been done elsewhere, either via shared services or automation.

Value in using data

HR metrics is an area which hasn’t previously been done well. Energy Australia shifted the dial for reporting, looking at things from a different point of view: “If we were to quantify the talent in the business clearly from a pay point of view, it’d be a massive number. It’s extraordinary to think we don’t know enough about the people that contribute to that number.”

You need to have a real handle on people, but also how it stacks up from a benchmarking point of view. Take SuccessFactors for example – it’s those tools to really demonstrate cost per hire relevant to the market,” Grant explained

Challenges

This rapid period of change won’t come without its challenges beyond the obvious IT change. The behavioural challenge can have a serious impact on the bottom line of the business.

Grant highlighted the two key sides to this; HR employees and employees previously serviced by HR:

“Managers will have to learn to embrace self-service and be a little less reliant on the former HR business partner for the activities that should be stopped or owned elsewhere.

“There’s a wider challenge for the HR team as well; you’ll be taking out a large part of their quick win work which is extremely valued by their business unit. They’ll now find themselves having to say no to things and really challenging that same unit.”

Join Grant Baker at the HR Transformation Summit 2014 where he’ll be delivering the presentation ‘Driving Culture And Enhancing Employee Engagement For Your HRSSC’.

Inside Johnson & Johnson: Transforming the HR function across 14 countries

After working across the SSON portfolio for a couple of years now, I’ve seen few key trends starting to emerge.

One that really stands out is the heightened focus on the HR function. I first noticed the theme during the 2013 Shared Services and Outsourcing Week, which saw a huge increase of HR professionals in the room. Since then, it’s continued to be a hot discussion topic. So, what’s causing the spotlight to shine on HR? And, perhaps more importantly, how can this core function that affects every single employee help drive a smarter business?

To uncover some answers, I recently caught up with Cherrie Porter, Senior Human Resource Director at Johnson & Johnson. She’s responsible for ensuring the successful transformation of the Human Resource function in 14 countries across Asia Pacific. Cherrie is going to be kicking off our HR Transformation stream during Shared Services and Outsourcing Week Australasia 2014 and it’s looking set to be a packed room.

We discussed the changing role of HR, the importance of taking a staged, tailored approach and the pitfalls of change management during a transformation project.

SSO Week has seen massive growth in number of HR attendees, why do you think that is the case?

It’s one of those things where I don’t know exactly what’s caused it, but I think some of it is driven by the fact that HR is becoming more sophisticated as a function and the professional HR people now working in that function really do want to be part of the strategic activities, the more value-adding activities rather than the pure transactional piece.

HR wasn’t always seen as a profession that required qualified people in the role. In its own right, it’s now starting to be elevated to where it should be.

Why was the decision made to standardise processes at J&J over the 14 APAC countries? Did you face any integration issues?

We’ve approached it on a couple of different levels. Historically J&J has operated as a very decentralised company, meaning that in any one of those 14 countries there could be multiple operating companies.

In Australia there are four, in China 13, in Singapore nine, each with a different number of companies; it’s meant that there has never been a head of J&J in Australia.

Firstly, we standardised processes, not across Asia Pacific as a whole, but at a country by country level. From there we said: ‘OK Australia, here are your four ways of doing different transactions for HR, pick one. You can start with a fresh sheet of paper; just pick the one you think is the best option and build on that.’

The focus is currently on China, there are nine different ways of getting compensation information to Payroll, and there will soon be just one.

Technology also had an impact. Our aim has been to keep things as simple as possible, so we developed a template of how we thought a process should be. That template was taken to different countries to establish if it could work. Sometimes we’d have to change a few things depending on legislation, etc. For example, some countries would require paper copies of certain documents.

Aligning processes to fit the technology template was a challenge; we were faced with some real push back. These new electronic processes interfered with the way things had always been done for years and often required a few cultural shifts. We really had to challenge the value-add on each process and ask how we can become more efficient and effective in the way we’re operating.

Our mantra has been ‘simple, standard, global’ and we really just questioned if it doesn’t fit any of those three… Why not?

Using a phased approach clearly helps achieve success. How does your change management strategy fit in with this and how have you been ensuring continuity and support throughout?

Change management is always tricky, it’s relentless. I’ve been at J&J now for nearly eight years and I’ve been working on this transformation for all that time.

A few years ago we decided to move everybody onto a SAP platform, reengineering all the processes, harmonising all the policies, using an outsourced vendor. We went live with that in several markets.

It lasted three years, and in April 2013, we brought all those countries back into J&J. They’re still running on SAP but now they are under our control, we run them and don’t have our third party vendor doing the transactional work anymore; it’s set up internally.

In the meantime we had to deal with all those other countries that weren’t on SAP.  We had to be flexible enough to say, we made one decision and it’s not really working for us and it’s time to change course, but that doesn’t mean we’ve thrown everything out. We’ve tried to leverage the best of what we had before and revisit that strategy, the vision and the direction. Our vision and direction of the transformation was right (moving transactional work into one area so HR partners could focus on business strategy), we just needed to make some changes to our approach.

As a result, countries went backwards and forwards so they’d probably been on a bit of a rollercoaster. The more progressive HR operators in those countries have jumped on board and got on with it to see where it’s all going. There are still people that are clinging to the old way of doing things, or believing that this is just another fad and if they sit it out long enough it will all go away.

For us the key was to just bite chunks off and move at a pace people are comfortable with. Some of our staff have been here for over 25 years, so it was important to not rush in.

At a country level, China has always been the big challenge for us. It’s the fourteenth and last country that’s coming on board and it’s where we are currently. They’ve looked at the project and seen that it’s not going away and as a result are much more bought into it.

Success builds success; the momentum has led to people more willing to participate. The softer approach, the small steps rather than large leaps, has certainly helped us.  It wouldn’t work everywhere, but it’s something that is working for us, never lose sight of the big picture. We learn from each other and we listen.

Have you been faced with any unexpected obstacles on your journey? Are there any lessons learnt you could share with other organisations on the same route?

Some of them are a little bit sensitive as it’s our own internal doing, such as the battle between HR and Payroll (I’m sure we’re not the only ones that have that). It leads to a lot of politics and has definitely been one of our biggest obstacles, working cross-function, internally.

Change management has also been an obstacle in terms of how people react when things don’t go well. Looking back to the start of our journey, it wasn’t going well with our third party vendor and a brave call had to be made to bring it back in-house. Unfortunately after that, we were almost too scared to move, so we went into this 18 month period where not much really progressed. The countries that had been on the brink of going live were told to hold for two months, it turned into almost two years where nothing happened.

Choosing your external partners wisely makes a huge difference. Spend the time finding a really good fit and someone you can trust and really work with; that makes all the difference if they understand you and what you’re trying to achieve.

Finally, you’re delivering a case study presentation during the Australian SSO Week 2014, taking place in June in Melbourne. What will the audience be able to take away from your session?

If I put myself in the shoes of someone attending rather than facilitating that conversation, it’s those lessons learned that can help the journey. There’s no right and wrong to any of this, it’s just keep your eyes wide open. Ask yourself, if I’m about to embark on this journey what do I need to be on the look out for? It may not be exactly the same as what happened at J&J but it’s still a really good question to have on a checklist. Some of those watch-outs and some of the big ‘ah-ha’ moments, those are the things people will walk away with.

I know myself when I’ve sat in these sessions, it’s reassuring to hear that others are having a similar experience and that you’re not going crazy! It’s a great experience to be with like-minded individuals and take away a few things that are potential pitfalls and traps. I can hopefully help people avoid going far down the wrong path. I don’t know there’s any way to totally avoid it but the eyes wide open is a good way to describe it.