Managing in a period of unprecedented austerity

The pressures on HR to deliver value during turbulent operating conditions have probably never been higher. Faced with a multitude of competing challenges, often characterised by mantras such as ‘Being smarter/quicker’, ‘More-for-less’ and ‘Invest-to-save’, HR functions have to find a way, increasingly in the face of savage budget cuts, to demonstrate and justify their value contribution.

The extract from a recent KPMG report provides an overview of the difficulties often faced by HR in securing credibility with organisations’ senior executives:

“When the marketing director comes to the executive board meetings he presents data on our customers, and we are given enormous insight about their buying habits, their aspirations, their concerns and their hopes. We have clear demographic data and we can predict with real accuracy how patterns will evolve. But when HR presents information about our employees, it is less precise, less concise, less insightful and less predictive.”

This points to the need to get some basics right – in fact, HR should be able to provide ‘brilliant basics’ in terms of reporting accurate, reliable information which is useful to the business, before it can begin to assert itself as a value-adding contributor in the strategic HR space.

Therein lies a paradox; HR functions which show a determination to get the basics right may be viewed as simply pre-occupied which administration, and therefore a taken-for-granted administrative cost or burden, to the detriment of bigger ticket items, such as the organisation’s Employer Brand. This paradox was succinctly explained by Martin Tiplady, HR Director, The Metropolitan Police Service:

“We were characterised as an administrative and rather bureaucratic HR service and it was evident that we had to do something about that to add greater value to the organisation.”

……Perhaps putting it another way, we should be more highly regarded for our input into the resourcing strategy for the 2012 Olympics than for our ability to design a new sickness form.”

Navigating through this paradox requires skill, determination and often significant investment. In the case of The Metropolitan Police Service, £42 million is being invested to create the paradigm shift from administrative support to valued business partner. Clearly, these resources are not available to the vast majority of organisations, particularly during a period that Gillian Hibberd, the current president of the Public Sector Personnel Managers’ Association (PPMA), has described as ‘unprecedented austerity’. I agree with these remarks, not simply from a public sector viewpoint, although it may be hit hardest, but in all sectors.  

The essential elements of the HR paradox remain the same. Undoubtedly, technology can play a part in resolving these, and I have set out some ideas in an expert guide, kindly reproduced with the permission of the PPMA. Other themes associated with transforming HR services during these volatile and difficult times will be explored in my blog in the coming months.