A number of questions are o�en posed in discussion on the skills HR need to deliver HCM. These questions are concerned not only with the nature and types of skills that HR people need but also how they will acquire and develop them within the career paths open to them. The questions being debated in the HR profession include the following:
❚ Where are the HR people of the future going to come from?
❚ If people are not developing the necessary skills in a traditional HR career path how will we develop them?
❚ Do we need to develop a highly training human capital specialist or do we need to give the HR department a broader understanding of human capital issues?
❚ What kind of relationships do we need to establish with other functions to develop the capacity of HCM within the HR function?
❚ What skills do line managers need to acquire for effective HCM?
❚ What will the relationships between HR and the line look like in the future?
In the course of discussions with human capital specialists in a variety of organizations it has become clear that a minority have followed a traditional career path, rising through the ranks of HR to specialize in human capital. For example, Grieg Aiken, whose post of Head of Employee Research and Measurement at the Royal Bank of Scotland
144 ❚ The role and future of HCM
was created specifically for the task, has a background in corporate and business lending rather than HR. Roger Cooper, who at the time of writing was leading the human capital initiative for Centrica, has an engineering background. Other specialists have emerged from marketing or other functions. The answer to the HR versus human capital specialist question seems to be that it depends what will fit the purpose of the business. O�en a specialist post is needed, largely because human capital needs some kind of HR champion prepared to get started on the difficult tasks of identifying the data and analysing and communicating it as described above. This has definitely been the case in most of the organizations interviewed where a definite human capital champion has emerged to drive the initiative. This post needs to be fit for purpose and will o�en change over time as HCM becomes more established and more sophisticated. This specialist may or may not be an HR specialist but will have to engage with the HR department to generate the information and understanding he or she will need to fulfil the role. In addition, it will also be important for HR staff to develop sufficient understanding to influence and direct the output from these specialist posts.
The most recent stage of the CIPD research investigating the link between HR and business performance carried out at Bath University (Kinnie et al, 2006), demonstrates a number of demands on the HR practitioners for effective HCM. This research demonstrates that HR processes need to be embedded within the core business processes.
HR practitioners therefore need in-depth knowledge of how projects are managed within the business and a clear operational awareness of how the business functions. Only if this understanding is present will they be able to design HR practices that will support the know- ledge creation process and the conversion of that knowledge into organizational value.
The knowledge and skills required within the HR function to im- plement and operate a full HCM programme are diverse and will differ between organizations and situations. However, the following list is a general framework of the requirements and demands that HR practitioners are increasingly required to deliver on.
Understanding of the business – its strategies and key drivers
This is an essential requirement. As discussed in the previous chap- ter, the business partner model has perhaps been overemphasized.
The skills HR specialists need for HCM ❚ 145 Tim Miller, Director of People, Property and Assurance at Standard Chartered Bank, debating the issue with the CIPD Human Capital Panel stressed he did not want business partners he wanted players.
He went on to say:
The starting point for building top class HR players is to identify the talent needed to be successful. And here I define talent as recurring patterns of thought, feelings and behaviours which are linked to success in an HR role. Without this, it is much harder to develop and grow them. Identifying talent in this way expands the range of backgrounds from which top class HR professionals can be drawn. Being an HR player requires new capabilities including strong analytical skills, empathy and sensitivity to understand business issues and powerful problem solving abilities. It’s also probably the case that these new capabilities go hand in hand with greater intellectual weight and academic disciplines. Once HR talent has been identified we need to invest in those HR people through development and planned exposure to the business – proper career management and development in other words!
An appreciation of how HR strategy interacts with the business strategy
In their 2002 report on the research commissioned by the CIPD, Scarborough and Elias argued that one of the most important aspects of human capital is that it acts as a bridging concept between HR strategy and business strategy, defining the link between HR practice and business performance in terms of assets rather than process.
HR therefore needs the skills to engage effectively in the strategic decision-making process to ensure that these decisions are made on the basis of all the information available to the organization. Failure to do so will once again mean that one of the most important assets that should be helping to define business strategy – human capital – is under-represented.
Knowledge of the data
Collection of data is an administrative task that need not be done by HR practitioners. Similarly, data analysis is a specialized task that may require buying in or specialized skills. However, HR practitioners do need sufficient knowledge of the nature of data, data collection techniques and data analysis to identify what data already exists and how this might be used. In particular they need to be able to identify data that will enable them to measure organizational and individual performance and the performance of HR. A wealth of information
146 ❚ The role and future of HCM
is available to HR in the form of performance data, salary details, training data, absence, retention, accident rates, etc, all of which can be generated at the touch of a bu�on thanks to the extensive use of computerized HR information systems. However, just because the data exists does not mean it tells us anything useful and HR people need to be able to make value judgements about the relative worth of the information available to them.
Understanding of what information managers need
In order to be able to develop the sort of positive relationships with line managers described above, HR practitioners need to provide managers with information that has meaning for them and how they perform in their jobs. Just giving managers information is not enough, this has to be accompanied by adequate explanation of what it means and the actions that may have to be taken as a result. Because line managers are now delivering so much HR activity the skills they need have changed. Human capital information provides HR practitioners with the tools to convince line managers of the value of implementing HR practice, and implementing it well, by demonstrating the impact and the value for them in terms of their own performance,
Knowledge of how to collect and analyse data
The actual collection and analysis can be carried out by others, but HR people need sufficient understanding to appreciate how this is done. One of the common problems identified in discussions with practitioners was the problem of comparing data collected from dif- ferent systems or using different methodologies. Many concluded that this was a direct result of HR’s inability to adequately specify their requirements from HR information systems in the past. There is also the added danger that without adequate knowledge of the nature of data collection and analysis, line managers’ expectations for information will not be fulfilled, which will in turn damage their trust in the information they are given.
Skills in presenting data and reporting on the outcomes of analysis
This is perhaps one of the most crucial skills for HR people. Being able to present their data in a way that will convince line managers and business leaders will need both presentation skills and influencing
The skills HR specialists need for HCM ❚ 147 skills. Discussion among the members of CIPD Human Capital Panel concluded that information alone was insufficient. HR needs to be competent at building a credible argument if they are going to demon- strate the real contribution of human capital. Because much of the data and many of the measures are ‘so�’ and open to interpretation it is important that it can be presented in the language of business and in a way that will have relevance for the intended audience. This may also mean presenting the same information in several different ways for different audiences. Some expertise in presenting information graphically and at least a working knowledge of advanced statistical techniques such as correlation, regression analysis, factor analysis and multi-variant analysis would be an advantage.
Skills in working as part of a management team
Human capital is not the sole preserve of the HR function and effective HCM will require action to be taken as a team. HR people therefore must develop the skills to work as part of this team, using strategic decision-making and influencing skills to put their case across and business skills and knowledge of the business processes to demon- strate how this impacts on the business.
Skills in working with the finance function
Relationships between HR and finance have o�en been uneasy. How- ever, much of the impetus for be�er human capital information has come from the financial community, who are increasingly express- ing a need for be�er understanding of intangible value. While we do not want to impose rigid accountancy models on human capital, HR practitioners do need at least to understand the language of finance and be able to express human capital information in a way that will have relevance. This means being able to justify investment in people management practice and the development of human capital in terms of return by identifying and articulating how this will be evaluated and how it relates to identifiable business drivers.