• The eighth round of the HR Competency & Capability Study (HRC2 S) is the most recent round of research with 29,000 respondents in 1,000 organisations.

• The HRC2 S defines how to navigate HR’s impact on results that matter.

Introduction

With eight rounds of research from over 120,000 respondents, and in partnership with 19 global HR Associations, Ross Executive Education at the University of Michigan and the RBL Group have explored how to be more effective in HR for over 35 years.

Making the whole more than the parts

Figure 1 for HRC2 S Round 8 shows the overall model as organised around three questions:

1. What competencies do HR professionals need to deliver results (Path A)?

2. What should be the characteristics of an effective HR Department (Path B) and what individual HR competencies shape HR department effectiveness (Path D)?

3. What business or organisation capabilities should HR help create to deliver business results (Path C) and what individual HR competencies help embed business capabilities (Path E)?

Before addressing insights on each of these questions, an overall result is worth highlighting: HR’s greatest impact on business comes from making the whole more than the parts. The HR department and business capabilities that it helps create have six to eight times more impact on business results than individual HR competencies, consistent with previous research in the book Victory through Organisation. For HR, the concept of the whole being more than the parts has numerous implications:

• It is not enough for HR to focus only on individuals (people, talent, competencies, employees, or workforce), but on the collection of how those individual people join together into organisation (process, culture, capabilities, systems, or workplace), by using what we call a human capability blueprint.

• It is not enough to isolate and improve a single HR practice area (e.g., hiring people, orienting new employees, training employees, or paying employees), but to emphasise the bundling of these separate HR practices into integrated solutions and patterns, often called high performance work systems.

• It is not enough to focus on HR timebased events (annual succession planning, payroll increase, quarterly reviews, or new orientation), but on how HR events meld into and create patterns of activities over time.

• It is not enough for HR to focus on a single stakeholder (e.g., the employee or line manager), but on a broader stakeholder map of employees, line managers, customers, investors, and communities.

Shifting the focus to verbs and outcomes In light of this overall finding, we can offer some insights on each of the three questions:

1. What competencies do HR professionals need to deliver results (Path A)?

We found that there are five competencies HR professionals should demonstrate to deliver business results (see Figure 2).

For 25 years, we labelled competence domains as roles with adjectives defining those roles (e.g., business partner, strategic contributor, paradox navigator, etc.). In this round, we focused on verbs and outcomes (accelerates business; advances human capability; mobilises information; fosters collaboration; simplifies complexity). Roles imply position; verbs imply action. In the crises which started in 2020, HR professionals have had to act expeditiously to respond to the uncertainties and jolts. The HR “role” is less important than the actions that create value for others.

Accelerates business requires starting from the outside-in to recognise market conditions that shift the HR agenda. HR should become business literate to know not only the language of business (e.g., financial, marketing, and strategic ideas), but how the business makes money by adapting to changing market conditions.

Advances human capability refers to what HR contributes to business discussions by discussing human capability: talent (attending to employee needs, particularly diversity, equity, and inclusion in today’s world) and organisation (offering HR solutions in terms of organisation capabilities).

Mobilising information is grounded in the technology revolution. New technologies are emerging daily (e.g., AI, machine learning, IOT, robots, and virtual reality). These technologies create digital information which in turn shapes decision making.

Fostering collaboration is about relationships and working together. It starts by having personal credibility and being trusted and trustworthy. Personal credibility enables HR to form positive relationships with others.

Simplifying complexity is a challenge of today’s increasingly information-laden world. There are so many ideas, but not all ideas have equal impact. Thinking critically means being able to separate the “wheat from the chaff” and focus on those ideas that will have the most impact for your company. 

Focusing on the right priorities

2. What should be the characteristics of an effective HR Department (Path B) and what individual HR competencies shape HR department effectiveness (Path D)?

Almost every organisation has an HR “department” (or function) with reputation, customers, purpose, governance, and accountabilities. In HR departments, HR professionals come together to design and deliver HR practices around people, performance, information, and work to increase value to customers, investors, communities, business strategists, and employees. In HR departments, HR practitioners learn, have career opportunities, and build relationships.

From the research, let us reinforce two observations about how to upgrade and transform your HR Department. First, focus on the right priorities. Instead of asking “What are our HR priorities?” the first question should be, “What are the business priorities?” Then comes the question, “How can our HR work support those priorities?” By focusing on business more than HR priorities, HR contributes to business performance.

Secondly, ensure that HR transformation is more than structural. Our research finds that an effective HR department is not just tweaking the HR operating model, or structure. In another study called the Organization Guidance System, our research with 799 respondents in 600 organizations (see www.rbl.ai), we identified nine dimensions of an HR department that may create value for employees, business, customers, investors, and communities (see figure 3). Figure 3 shows that the results (columns C, D, E, F, and G) are affected by different dimensions of HR (rows). The green cells in Figure 3 indicate the highest impact of an effective HR department. Row 9 (relationships) has a high impact on strategy (column D), customer (column E), and financial (column F) results which means that HR people need to learn to work together and build relationships to deliver these outcomes. 



Delivering human capability

3. What business or organisation capabilities should HR help create to deliver business results (Path C) and what individual HR competencies help embed business capabilities (Path E)?

When an HR professional is invited into a business conversation (about strategy, customer service, financial results, digital transformation, etc.), what does HR uniquely bring to that conversation? We identified three contributions of HR to business goals (Figure 4) which we can call human capability.

Individual focuses on human capital, people, talent, employee, or workforce. People are the raw ingredients of any organisation. They carry with them skills and attitudes that make up a company. HR’s work is to help employees realise their potential, improve their competencies, and create positive experiences.

Organisation focuses on how individuals come together to work collectively to become more than their separate efforts. An organisation may be defined less by its structure (morphology, hierarchy, roles) and more by the capabilities it possesses (what the company is known for and good at doing). HR’s work is to identify and develop the organisation capabilities that deliver employee, strategic, customers, financial, and community results.

Leadership refers both to individual leaders at all levels of an organisation and to the overall leadership capability (or leadership brand) of a company. Leaders (individual competencies) and leadership (organisation capability) shape both individual behaviour as people do what their leaders do and organisation processes as organisation capabilities often reflect leaders’ competencies.

With these three contributions of human capability defined, strategic HR then refers to how any company can invest in talent, leadership, and organisation to deliver stakeholder results. Whenever HR is invited to a business discussion, the simple but profound question is “What are the talent, leadership, and organisation initiatives that will deliver targeted results?”

Conclusion

Can we answer with some degree of confidence the question “What is required to be more effective in HR?”

Yes! Make the whole more than the parts by creating a great HR department and contributing to business conversations by delivering organisation capabilities. And start by demonstrating five personal HR competencies.

In these incredibly demanding business conditions, HR can hopefully rise to the opportunity and make a difference.