Orion Partners Survey: HR Transformation Largely Viewed as a Failure
According to a survey by Orion Partners, just 22 percent of HR professionals feel that HR transformation has been a success, even though nearly nine in 10 HR departments have been restructured or transformed within the past three years. Other key data obtained in the survey include:
• 71 percent of HR employees reported that their function does not use a decision-making process based on robust data.
• 27 percent said that their function is ineffective
• HR leadership was, however, reported to have seen improvement in every aspect over the last three decades
Of polled senior HR employees, 43 percent said their department is inefficient and 2 percent say it is ineffective. About one-third feel that the reorganization of their departments has not played to the strengths of their individual departments and 37 percent said that the purpose of their function is not clearly defined as relevant to business objectives.
“Life for HR departments has become harder, leaner and meaner in the aftermath of the financial crisis. Almost nine in ten functions have restructured or reformed since 2010 – the darkest days of the financial crisis – as they try to adapt to seismic changes in the way their organizations work. But it’s been far from a complete success. Commercial and business objectives have been recalibrated since the downturn, and many HR departments have failed to evolve in a way where they are able define the business purpose of function. This harms HR in the eyes of the rest of the business. It’s difficult to drive an effective strategy if HR staff don’t understand why they are there in the first place,” said Jane Chesters, an Orion partner.
One of the primary sources of lack of success in HR restructuring has been the poor use of data. Indeed, over 70 percent of senior HR professionals agree that decision-making is not based in robust analysis. A further 54 percent reported no in-place means for assessing the performance efficiency of various parts of the HR function.
Chesters continued, “Trying to restructure the HR function without using data to analyze where improvements and changes need to be made founds the whole process one guess-work and conjecture. It should be based on a solid bed of fact. Too often transformation programs have been established without really clarifying what kind of service the business needs. This lack of dialogue with the end-user can mean an HR function that is more efficient but which doesn’t meet the needs of its customers.”