How to become a more effective HR professional

HR’s job is to accelerate business results through human capability. And the way it does that, says Dave Ulrich, professor of business at the Ross School of Business, University of Michigan and one of the founders of the HR Competency Study, is to manage information, manage relationships – starting with itself – understand the external environment, advance human capability and simplify complexity.

The HR Competency Study is one of the most comprehensive pieces of research on HR. Started in 2007, this year’s round eight comes as the contextual events facing HR and business are changing in a way most of us will not have witnessed before – from the pandemic, political uncertainty and social injustices to the digital revolution and emotional deficit disorder.

“The content, what we do as HR professionals or business leaders, is the king – it’s what we do. The context is the kingdom. And over the last number of years that we've done this study every three to five years, we find there's 30 to 40% change because the context is changing. But this year there’s an ocean of change,” says Ulrich.

If 2007/2008 was the financial crisis, then the past year has been the people and organisational crisis, he says. And to turn that crisis into opportunity we need to navigate HR’s impact. Or as Ulrich puts it, to “peek above the cloud of the challenges and see where we can go”.

So what competencies does an HR leader need to be successful?

What are the characteristics of a great HR department?

What business capabilities can you help to create to deliver business results?

These are the questions this year’s study, sponsored by Michigan Ross and RBL Group, aimed to answer. Those answers came from one of the largest samples the study has had in its history - a total of 28,627 people representing 1,013 organisations across the world. What makes this piece of research different is that it is built around a 360 survey where a single HR participant representing the whole gamut of disciplines in HR is surveyed and that person then nominates supervisors, HR associates and non-HR associates to evaluate the HR participant on a handful of criteria. This year 3,594 HR participants were evaluated by 25,033 people.

The starting point to the study is results. As Mike Ulrich, assistant professor at the Jon M. Huntsman School of Business at Utah State University and co-director of the study, says: “If we're not looking at results there's really no point to what we're doing. If we don't have some impact on an outcome, whether it be our personal effectiveness or impacting our business or impacting the employees within our organisation, we can spin our wheels doing things that aren't necessarily going to create a lot of value. There's a lot of stuff that HR people out there can do today that aren't necessarily things that are going to create a good investment, a good return on the time we have.”

You may think there would be much variety given the large sample, but five clear HR competency domains arose – all of which have impact and are connected to the results that are necessary to help you be successful and to help your company be successful.

This year the researchers found that some of the competencies of earlier studies had come together into the same domain. For example, as Erin Burns, principal at RBL Group, explains, the previous round seven concepts of strategic positioner and culture and change champion can be found in the new competency of accelerates business, which underpins success across all the data breakdowns (see above two-minute video above for a snapshot of this).

“I think one of the things this highlights is that in today's world you can't separate change from the business. It has to be tied at the hip together and moving together in the same direction. And so HR’s role is to be able to make sure that's happening and that there's capability to be able to drive agility in the direction that's going to meet the needs of the organisation overall,” she says.

Or take the new competency domain of advancing human capability. This effectively brings together human capital curator, compliance manager and total rewards steward from the last round.

“This highlights the way that HR’s role is to use HR processes and solutions in order to build capabilities by building integrated solutions, not just executing HR processes,” says Burns. “And new this round, probably partly coming out of all movement for social justice, is championing diversity, equity and inclusion as a distinct factor. So, if you’re going to be able to advance human capability, everyone has to be empowered and engaged to contribute their best effort. And HR plays a really important role in building organisations that enable everyone to bring their best work to the table and to be rewarded, recognised and have the opportunity to grow.”

In the new competency model simplifying complexity sits in the centre and brings together the skills required to think critically, harness uncertainty and navigate paradox to identify the key things that are going to make the biggest difference to getting the most important things done – and then focusing your and your people’s efforts on this.

So how are you doing in each of these competencies?

As the charts below show, HR is best at fostering collaboration. Building relationships and self-management are its greatest strengths. But it is worst at mobilising information.

If you break these domains down into specific items that make the biggest difference you find that areas of generating competitive insights, elevating talent and championing DEI should be prioritised. One key finding is that guiding the social agenda has a high impact but is the lowest single competency factor as a profession.

Does this matter? Well, all competencies have an impact. In these HR competencies accelerating business and advancing human capability have the biggest impact on business success. While HR needs to manage and maintain the other three competencies, the big opportunity is in prioritising advancing human capability. But when you look at which of these competencies has an impact with external stakeholders, for example, mobilising information plays an important role. In a nutshell:

What gets you invited to the table? Accelerates business and simplifying complexity

What do you talk about when you are at the table? Accelerates business for both but fostering collaboration for internal and mobilising information for external

What delivers business results? Accelerates business and advances human capability.

The role of the HR department

As in previous studies, the role of the HR organisation has a significantly greater impact than individual HR talent. In fact, organisation is more important than talent by a factor of 10.

“This really points to the critical need for HR transformation,” says Pat Wright, Thomas C Vandiver Bicentennial Chair and director of the Center for Executive Succession at Darla Moore School of Business, University of South Carolina who worked on the study. “You as an individual can have an impact, but the impact you're going to have is getting all your department together to create the characteristics of an HR department that drives success.”

This year the study identifies seven characteristics of the HR department that drive business results:

Employee practices: The extent to which the organisation uses the right set of HR practices to manage employees

Practice alignment: The extent to which these practices are aimed at supporting and developing key strategic capabilities

Information and analytics: The extent to which the department is building databases, applying analytics, seeing patterns in data and measuring the impact of HR

Capability support: How well the HR department supports building the capabilities the organisation needs

Stakeholder value: The extent to which the function designs and delivers practices that add value to customers, investors, line managers and employees

HR department credibility: The extent to which the function earns line management trust, gains employee trust, advocates for employees and holds line managers accountable

Reliance on HR: The extent to which those in the firm rely on HR to play a critical role in strategic activities such as the creation of business strategy, strategy implementation, restructuring and culture change

All seven characteristics of an HR department are positively related to business and are all things your HR department should be doing. However, the most effective characteristics focus on creating a committed workforce while also controlling the low performers to either elevate their performance or to exit – employee practices and capability support.

“HR departments drive results when they begin with designing and delivering HR practices that are going to create stakeholder value by helping to build the capabilities the organisation needs to meet the needs of those stakeholders,” explains Wright.

Business capabilities HR should create to help the business deliver results

The study identifies three core business capabilities that help differentiate the company in the market.

Aligning capability: How much a firm emphasises creating competitive advantage through human capability

Creating workforce agility: How flexible and adaptable the people and HR systems are

Delivering diversity, equity and inclusion: How well the organisation has created a culture that values people regardless of demographic differences

While the impact from DEI is smaller than the other two in terms of impact on business success, Mike Ulrich notes that its impact is larger than seen in previous rounds. “We do think the diversity and inclusion agenda is becoming more important to the business over time,” he says.

Overall the key message is that to win in business coming out of the past 18 months you as an HR professional must think about the ways you can create better skills in yourselves and your teams around advancing human capability. For as Dave Ulrich says: “This is our time in HR to move forward. It’s time to reinvent and reimagine HR.”

To see the full results and model please click here