Managing HR in a mid-sized company: thankless task or exciting opportunity?

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Managing HR in a mid-sized company: thankless task or exciting opportunity?

IntroductionDo you remember the days when your HR function was actually just a lockable filing cabinet and a few managers who enjoyed interviewing people? Or did you join your company further down the road when, in an effort to manage the escalating and increasingly complex needs associated with employing more and more people, the filing cabinet had become a person?

Where are you and your organisation now? Are people really ‘your greatest asset’? Are people-related issues discussed regularly by the board? Or are you struggling just to make sure that holidays are tracked and people are paid on time?

In a bid to understand the HR challenges facing mid-sized companies in the UK, we asked senior managers in more than 100 organisations to tell us what they’re good at, what they struggle with, and where they think they ought to focus their efforts. Armed with this data we spoke to eight experts, people who have worked on HR issues with mid-sized organisations, and asked them for their advice to mid-sized companies.

Read on to understand:

• Wheremid-sizedcompaniesbelievetheirHRstrengthsandweaknesslie

• Wheretheyneedtofocustogrowprofitably

• Howtheycangetbetterat‘joiningupthedots’inordertorecruit,developandretaintherightpeople

• Howtheycandeliverthebasicsmoreeffectively

• TheperceptiongapbetweentheHRfunctionandthepeopletheyserve–andhowthiscanbeclosed

• ThebarrierstoHRoperatingmorestrategically–andhowthesecanbeovercome.

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Managing HR in a mid-sized company: thankless task or exciting opportunity?

HR for growthWe asked managers in mid-sized organisations to rate their organisation’s current capability against various activities that are typically the responsibility of HR – and to tell us how important they think it is to do these things well if their organisation is to grow profitably.

The green zone in the chart below contains those elements where capability is already high. In the amber zone, capability is lower but importance is also low. The red zone, in contrast, contains those elements that are seen as important but where capability is perceived to be relatively low.

Figure1

Organisation’s current capability against perceived importance for future growth

Current capability

Cont

ribut

ion

to p

rofit

able

gro

wth

Making it easy for employees to submit

information

Collecting and storing people-related data

Creating a strong employer brand to attract employees

Managing flexible working

Managing work-life balance Long-term

workforce planning

Setting compensation

levels

Developing people

Planning for succession

On-boarding and retaining new hires

Structuring the organisation

Managing performance

Recruiting

Training employees and sharing knowledgeBuilding a strong

culture with shared values

Processing payroll

Conforming to new regulations

High

Low

Low

Hig

h

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The Balanced Scorecard: how to get it right and reap the rewards in mid-sized organisations

Joining the dots: the red zoneMost of the activities in the red zone – activities that are important for future growth but where mid-sized companies are weakest – relate to the recruitment, retention and development of talent. It’s clear that mid-sized organisations, when they reflect upon the matter, realise that finding the right people, keeping them and getting the most from them are fundamental to future growth. Martin Oest at True Picture sums up this imperative, “For many companies, workforce costs account for more than 60% of operational costs. But this isn’t just about controlling costs – it’s about having the right skills at the right time and engaged employees.”

However, the majority aren’t tackling this challenge effectively. ”We find that many companies aren’t addressing the real need,” says Jason Heward at Penna Consulting. “I speak to CEOs who are frustrated by the quality of their people but haven’t acknowledged the need to do something about the way they recruit, develop and retain employees.” Mid-sized companies aren’t alone though: “Many of the larger companies haven’t cracked this either,” notes Simon Constance at Ernst & Young.

But for mid-sized companies, the ‘war for talent’ is particularly challenging: they often need to recruit more people than larger companies because of the rate at which they’re growing, and with fewer employees in the first place they’re more likely to need people who can hit the ground running without too much support. Added to which they don’t have a strong brand to attract new employees. As Grahame Russell at Change Associates says, “These challenges have always faced mid-sized companies but the barriers are even higher at a time of economic uncertainty when people are less willing to take the risk with a less well known company.”

Given these challenges, it seems incredibly important that mid-sized companies improve their capabilities in recruiting, retaining and developing people. Our experts pointed to four ways in which talent management can be improved:

Align talent management with business strategyAll of our experts focused on the need to align talent management with the organisation’s business strategy. At its most basic, this requires a clear understanding of the skills required by the company over the coming years in order to develop a plan about how the organisation will recruit, develop and retain those skills. However, for the companies who do this well, the “people are our greatest asset” statement isn’t just hot air; from the board down there is a strong focus on what needs to be done to manage and maintain this valuable asset. As David Smith at Hay Group notes, “It’s particularly difficult for mid-sized companies to take a step back from fire-fighting and to look at how they are managing their greatest asset. It’s not rocket science but it does require senior managers to remove themselves from the day-to-day to look at how they can boost productivity by changing the way they manage their people.” We’ll come back to this challenge of taking a more strategic approach to HR later.

Integrate all aspects of talent managementWhen asked to reflect on their experience around talent management, for many of our experts the first issue that came to mind is a lack of integration. Grahame Russell, for example, says “I’m reminded of a bank I worked with which was very proud of its ability to recruit the best people and to leave them energised and engaged at the end of the on-boarding process. But then 18 months later these people left. There is little point in focusing on one or two elements in isolation – organisations need to think about the entire employee life cycle.” Jason Heward at Penna highlights a lack of integration between efforts to create an external employee brand and the organisation’s culture, “I’ve seen organisations pay someone to develop an external employer brand but make no efforts to use this work internally for engaging existing employees.” David Smith

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Managing HR in a mid-sized company: thankless task or exciting opportunity?

at Hay Group concurs, “In some cases, companies will put a lot of effort into creating web-sites and marketing materials to build an appealing employee brand. However, this bears no resemblance to what is happening internally. The employee brand should reflect something very real and should be used to engage existing employees as well as attracting new ones,” he says, adding: “It’s so important that there is high-level ownership of talent development and that all the different aspects – from recruitment through on-boarding to performance management – are truly aligned.”

Simon Constance points out that mid-sized companies have an advantage against their larger competitors in that they can often respond more quickly to business needs, bringing together different aspects of talent management without having to navigate complex organisations and existing procedures. “We worked with a mid-sized client where we were very quickly able to get the HR team and senior management into one room to discuss what the business strategy really required. We were able to identify where growth was coming from and what skills and key roles were needed to support that growth. By zeroing in only on the roles and skills that made a difference to that growth, in one afternoon the company had agreed to focus its efforts on four key countries, a handful of key roles, and had identified what needed to be done to ensure the company had the skills it needed for growth. In a larger company, the canvas is bigger and it can feel harder to get that focus. Arguably it would have taken much longer to reach this point, and to put in place the changes needed to respond to the particular challenges associated with key geographies – barriers often include building agreement about the aims of the work and getting sign off for exceptions to existing regional and global policies.”

True Picture’s Martin Oest supports this view that the limited scale of mid-sized organisations can actually be a benefit, “In my experience mid-sized organisations who embrace a positive mind-set and have a well thought out strategy enjoy a greater freedom to execute their plans and are at a distinct advantage to their counterparts in much larger organisations.”

Acknowledge gaps in your expertiseIt’s very difficult and, makes little sense, for mid-sized companies to have all the skills they need in-house. As our survey shows, many mid-sized organisations are conscious that they don’t have the skills to deliver many aspects of a talent development programme effectively. Even allowing for the potential vested interests of our experts, who all agreed that companies should look to outside bodies for help, it’s clear that mid-sized organisations don’t have, and shouldn’t have, expertise in every component of talent management.

For many organisations, executing well begins with an honest assessment of capabilities and decisions about where to develop existing employees, where to buy-in additional help and where to recruit. Take pay and reward for example: when did you last benchmark your salaries against the market and look at relative pay levels within your company? These sort of tasks are quick and easy for companies with a methodology and the data, and good HR consultants are able to adjust what they offer to the needs of the individual organisation, as Dr Amanda Potter at Zircon explains: “We work a lot with companies to develop assessment, development coaching and training interventions and whilst larger companies tend to be very clear about what exactly they need, smaller companies often ask for help in developing and delivering the end to end programme. It means that we spend the majority of our time designing interventions for the larger companies that, once trained, their managers will then deliver internally, whereas we spend our time both designing and delivering the interventions for the smaller companies.”

Martin Oest at True Picture provides a final piece of advice, “Use external contractors and consultants to gain experience fast but ensure that you anchor this approach with internal staff to ensure a transfer of knowledge.”

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Managing HR in a mid-sized company: thankless task or exciting opportunity?

Ensure accountability and capabilityIt doesn’t end there though. You can have an integrated talent management programme which is strongly aligned with business strategy and supported by the necessary skills in the HR function, but talent development will fall apart if managers within the business do not feel accountable for the development of the people they manage, or if they don’t have the skills to do so effectively. Jason Heward at Penna highlights the challenge, “Take for example the Head of Sales. They could be a really poor people manager but, in many organisations, this issue won’t be addressed if their sales figures are good. And they’ve probably had multiple sales training courses. We somehow expect managers to just happen. But people need support and training, and to believe that the way in which they manage their people is being assessed.”

Simon Constance lays out four key steps for companies looking to drive accountability and capability in talent management throughout the organisation. “First of all, don’t approach the conversation with managers in the business from a HR perspective. Think about what matters to each individual business leader and frame it in that way – how will they cope for example if there is a lack of key skills in their department six months from now? What are the risks to the business? Secondly, promote great practice and success stories and bring talent management into the performance management goals for senior managers. Thirdly, managers need to be developed in talent management, in how to spot talent and how to have the discussions with staff about their future. Finally, there has to be a culture, from the top down, that talent management is important. Do senior managers ask about talent management when they speak to their reports? Are managers supported when they need to have difficult conversations with people who are underperforming? Ensuring managers throughout the organisation feel accountable for talent management and have the capability to do it well is probably the biggest challenge in getting talent management right. But if you do get it right, then everything else will fall into place.”

Keeping it simple: the amber and green zonesWhilst it would be easy to brush over the elements in the amber and green zones (figure 1) – processing payroll, conforming to new regulations, collecting and storing people-related data and making it easy for employees to submit information – employees in mid-sized companies seem to argue that you shouldn’t. Nearly half (46%) of HR customers (defined as managers outside of the HR function) feel that their HR function is too bureaucratic and even more (50%) don’t see technology being used effectively to make key processes simple.

Figure2

Views of HR customers on the HR function in their organisation

4%

10%

47%

36%

42%

50%

8%

4%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Uses technology effectively tomake key processes simple

Overly bureaucratic

Strongly agree Agree Disagree Strongly disagree

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Managing HR in a mid-sized company: thankless task or exciting opportunity?

According to our survey respondents, making these processes as simple as possible for both HR and the HR customer allows all parts of the organisation to focus on the things that really matter. When asked to give advice to another mid-sized organisation looking to improve its HR processes, many respondents focus on simplifying processes: “Get the basics right. Keep systems simple and easy to use,” was a typical comment.

For many respondents, the key to getting the basics right is technology. They talk about the need to invest in IT solutions which automate as much as possible, freeing up time for managers to engage with employees on the issues that really matter. It’s something that moves the impact of IT beyond the green zone activities with which it’s normally associated. And the good news is that the development of IT solutions is starting to put them within reach of mid-sized companies where their cost and scale were previously prohibitive.

But for some mid-sized companies, the logical outcome of the drive to simplify and optimise key processes is to outsource those processes to specialised providers. Amongst the mid-sized companies we surveyed, nearly 40% are already outsourcing pension scheme enrolment and just over 20% are outsourcing payroll.

Figure3

Proportion of mid-sized companies (100-600 employees) outsourcing key HR processes

0% 10% 20% 30% 40% 50% 60%

Employee data management

Expenses management

Performance management

Workforce reporting

HR function

Absence management

Benefit administration

Payroll

Recruiting

Employee support

Pension scheme enrolment

Training

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Managing HR in a mid-sized company: thankless task or exciting opportunity?

Jason Heward at Penna Consulting comments on these results, “I’m not surprised that pension scheme enrolment and payroll are near the top of the list, but I am surprised that more companies aren’t outsourcing them – these are things that need to be done and things where it’s easy to find people who are better at it than you.”

There are many reasons why organisations don’t make more use of external partners – from the ‘if it ain’t broke, don’t fix it’ mentality highlighted in our previous reports to a lack of resource to even consider the issue. As Simon Constance at Ernst & Young highlights, “It’s a bewildering market for mid-sized companies – there seem to be so many options from independent specialists to larger firms out there and they’ve potentially not got the resources to explore the options.”

It may also be that organisations fail to agree on what to outsource, due to misalignment between the criteria they use to make the decision. According to our survey respondents, the top issue for all areas, and particularly for finance and IT representatives, is cost. But whilst cost savings are important, it may be the less tangible benefits such as enabling the business to focus on what it does best and increasing user satisfaction that actually have the biggest benefit overall.

Figure4

Importance of factor in deciding whether to outsource a HR activity – results presented by respondent’s function (respondents were asked to select their top three factors)

0% 10% 20% 30% 40% 50% 60% 70% 80%

Positive experience in outsourcingother activities to potential partner

Potential partner already workingwith companies you respect

Removes the risk of non-compliance

Potential partner's commitment toon-going process improvement

Current process causing high levelsof dissatisfaction for end users

Outsourced solution easier for end-user

Potential partner's expertise higherthan that of in-house staff

Enables the business to focuson what it does best

Proof of significant cost savings

HR Finance IT

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Managing HR in a mid-sized company: thankless task or exciting opportunity?

Perception gap

Figure5

Average view of HR customers versus people working in HR about the role HR plays in the business

Our survey unearthed a significant gap in perceptions about the HR function between people within the function and people outside it. Whether asked about the value added by the HR function, its responsiveness to the needs of the business or focus on the needs of the user, people within HR are much more positive than those outside.

Whilst it may be the case in some organisations that the HR function really isn’t delivering as well as it thinks it is, sometimes HR suffers from the fact that its input is only recognised when things go wrong. As Grahame Russell at Change Associates says, “Managing HR is a little like being a football referee – you’re critical to the smooth running of the game but only noticed when a bad decision is made.”

It’s important to stress that improving the perception of HR within the organisation is not just about furthering the career of the HR leader. As Grahame Russell says, “This is all about the organisation understanding the value and importance of people. An organisation that sees its people as an asset that needs to be carefully managed and nurtured is one where existing employees are treated well and one that is prepared for growth.”

Our experts highlighted ways in which HR can make its value clearer to the rest of the organisation:

Ask for input and communicate the outputOur survey respondents, when asked to give advice to other mid-sized companies, highlighted the need to involve other people in the creation of new processes and to communicate well once decisions have been made. Here are two typical responses:

• “We’veonlyhadaHRdepartmentforeightmonths.Inthattimetheyhaveimplementedlotsofnewprocess,procedures,handbooksanddocuments.Thesechangeshaveledtoashiftinourculture–there’safeelingit’smore‘bigbrother’thanbefore.Clearcommunicationtotheentirebusinessiskey:involvestaffinaconsultationprocessallowingeveryonetohaveavoiceintermsofbusinessprocessesandprocedures.Oncetheseprocessesandproceduresareinplace,it’simportantthatadequatestafftrainingisgivenandexpectationsareset.”[MarketingManager]

• “Ensurethatyouunderstandthevisionofyourorganisationandensurethateverythingyoudocontributestotheachievementofthatvision.Makesureyouarevisiblewithinthebusinessandworkingalongsidemanagersandstaffand

0.76

1.23

1.29

0.25

0.71

0.68

0 1(Agree)

2(Strongly

agree)

-2(Stronglydisagree)

-1(Disagree)

Focused on the needs of the user

Responsive to the needs of the business

Adds value

Other functions HR

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Managing HR in a mid-sized company: thankless task or exciting opportunity?

understandingwhattheydoandthechallengestheyfaceindoingit.Aboveall,knowwhatyouaretalkingaboutanddemonstrateyourknowledgeinawaythathelpsandsupportsmanagers.”[HRDirector]

As Jacky Griffiths as Zircon highlights, it’s important to engage with other parts of the business in the language that they understand, “The HR leaders I’ve worked with who really add value and are perceived to add value speak the language of the business and understand the demands on people within the business.”

Demonstrate value through metricsAnother area that our experts touched upon is that of measurement or more specifically, in the case of mid-sized companies, the lack of it. “We see many companies, particularly smaller ones, that don’t have metrics for their HR activities,” says David Smith at Hay Group. “Yet there are many metrics that are easy to collect, that may already exist, that can be used to demonstrate the value added by HR. It’s important to take the perspective of the senior management team – they’re unlikely to be too engaged in how many hours have been spent on-boarding but they will certainly sit up when told the benefits from increasing the average period of retention by 35%.” Jason Heward at Penna supports this view, “People tend to get it when they see the outcomes. Something as simple as tracking absence days and demonstrating the impact of new approaches on that metric can make all the difference.”

Martin Oest at True Picture adds, “The IT and finance functions often get a bigger share of voice internally because of their ability to focus on the numbers. Fortunately, it is possible to present the HR case differently by basing analysis on hard data and presenting clear numerical benefits. HR departments that make this change will soon notice a change in perceptions about the value they bring.”

Jacky Griffiths sums up the challenge for HR leaders, “The business environment is one where emphasis is placed on numbers, KPIs and ROI so why would the HR function want to talk in terms of policy and process? Credible HR functions are those who are comfortable with using data and information to shape and talk about activity that is directly relevant to the business.”

Taking the strategic viewAsk a HR professional in a mid-sized company how important it is that HR issues are discussed at board level, and the chances are they will tell you it’s critical. In fact we did ask and the result was that 73% think discussing HR issues at board level is critical while the remaining 27% think it important. In contrast, only 34% of people working in other functions think it’s critical to have HR at the table and some went so far as to say it’s not important at all.

It seems that HR professionals have taken on board the message that they ought to be getting more strategic. But many of their organisations haven’t. Grahame Russell at Change Associates describes a typical situation, “Many senior business leaders in small to mid-sized organisation see HR as an unjustifiable overhead. HR plays a very transactional role – it’s about doing what needs to be done as efficiently as possible. Often, it takes something like preparation for an IPO or trade sale for organisations to look at broader people issues.”

Yet, as Natalie Gordon at Egremont Group highlights, the benefits of a strategic approach to HR can be significant, “The very best HR Directors understand the business goals and the needs of customers and therefore are able to collaborate with their peers within the business to drive change. I would say though that these HR Directors stand out – they get a buzz out of being at the core of the business and being integral to how the business achieves its business goals. The next tier of HR Directors are very good operationally but there is a big difference in role, capability and attitude between those who manage the HR processes and those who lead the business.”

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Managing HR in a mid-sized company: thankless task or exciting opportunity?

Jacky Griffiths of Zircon concurs, “The best HR leaders consider themselves as business people first and HR professionals second. They are both internally and externally savvy and are able to design, sell and deliver interventions that really benefit the business agenda. They have a huge amount of credibility.”

A good test of how an organisation views HR is what level of person they put in charge of the function. We analysed the views of HR customers about the strategic activity of HR against the level of the most senior person in the HR function. Those led by a manager, rather than a senior manager or director, were much less likely to be involved in strategic decisions for the business, to have as much influence as other functions, to plan for the long-term or to drive change in the organisation.

0 1(Agree)

2(Strongly

agree)

-2(Stronglydisagree)

-1(Disagree)

-1.00

-0.60

-1.00

-0.83

0.00

0.29

0.06

0.17

0.13

0.17

0.52

0.50

Drives change in the organisation

Plans for the long-term

As influential as other key functions

Is involved in strategic decisions for the business

Director Senior Manager Manager

As organisations make the transition from small to mid-sized, most decide they need at least one full-time HR professional. For many, the obvious solution is to hire a relatively-low cost administrative person who can help ensure that the cogs continue to turn and that regulations aren’t overlooked. Whilst this approach solves some problems, what it doesn’t do is allow HR to become a strategic part of the organisation: recruit an administrative person and you get an administrative approach to HR. And it’s clear that many of our survey respondents would agree: “Get a high quality, insightful HR Director who will get the ear of the chief executive and the management team,” advised one. “Firstly, understand what it is that the business wants from its HR function,” said another. “Secondly, make sure that HR is a key strategy partner, not just another service function. Thirdly, ensure that you have the right people with the right skills to drive the agenda forward.” But it’s not easy to find the right person to lead HR in a mid-sized company, “You need someone who can see the big picture and join up the dots, and this means being willing to pay for the organisation you want to be,” says Jason Heward at Penna. “But there’s a real knack to finding that person as you can’t just apply big corporate processes and procedures to a mid-sized company. If you do, you run the risk of undermining the innovation, flexibility and creativity that has made the organisation successful. The right person will be able to refine best practice to fit your organisation.”

Figure6

Average view of HR customers about the role HR plays in the business – results presented by level of most senior HR professional in the organisation

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Managing HR in a mid-sized company: thankless task or exciting opportunity?

WhatifyourHRleaderisalreadyinplace?

For the HR leader already in a mid-sized organisation who would like to make a more strategic contribution to the business, it’s a tricky situation. On the one hand, there’s a need to get the basics right and to be seen as useful on a day-to-day basis. But being too helpful on a practical level can mean you aren’t invited into the boardroom. “It can be a challenge when you’re running HR in a mid-sized company and you’ve been in place for a while and where you want to move from less operational to more strategic work,” says Jacky Griffiths at Zircon. “I have seen credible HR professionals say they don’t want to lose credibility so they remain helpful, involved, and to get things moving they say yes to activity that should remain with the line manager in their leadership role. But to be more strategic you have to make a choice about what to get involved in. If you do a line managers’ work you will have less quality time to consider the strategic landscape and the activities, training and coaching that needs to be put in place to help your organisation grow and develop. You need to know what is going on but this doesn’t mean you have to do it all to have credibility.”

But it is possible. “Whether HR is seen as strategic or not is usually deeply embedded in the organisation,” notes David Smith at Hay Group. “But it’s not impossible for a passionate HR director to make that change.” Natalie Gordon at Egremont Group agrees: “If you’re a business person with an instinct for seeing the connections between the needs of the customer and the needs of the organisation, and you have the desire to operate outside traditional operational HR boundaries and the courage to debate at board level, then you’re in a good position. Sometimes, however, it takes a real organisation need – one that can only be met by looking at managing people in a different light – to make the leap from operational to strategic HR.”

In conclusionThere’s no doubt that the way you manage your people can completely change the game. Take Zappos for example. Back in 1999, selling shoes online seemed like a crazy idea. By 2001, when Zappos’ revenues reached $8.6m, it seemed less like a crazy idea. And it seemed like a rather good idea in 2003 (when revenues reached $70m), 2007 ($840m) and particularly in 2009, when Zappos was bought by Amazon for somewhere in the region of $850m. Look at Zappos’ own website or read any commentary about the company and it quickly becomes obvious that HR was and is central to the success of this company. From the way jobs are advertised, to the dominance of the core values, to intern blogs about doing push-ups in the office, this isn’t a company that does the minimum required in terms of HR; it’s one that has challenged every assumption about how people ought to be recruited and managed.

Yet talk, as we did, to people working in mid-sized companies in the UK and the reality that emerges is that, for most organisations, ‘the greatest asset’ isn’t really being treated as such. HR is struggling to be involved at a strategic level and instead finds itself ticking boxes and ensuring regulations are being met. That’s a missed opportunity because what’s clear from our research is that HR can play an important role in helping a company to grow. Our experts highlighted different ways in which HR can do that, but what’s clear is that this isn’t just HR’s challenge. Senior managers throughout the organisation need to be thinking about the role people play in the company’s success. They need to consider what that means in terms of the standing of the HR function, its processes and procedures, and what managers are trained to do and held accountable for. People are integral to any organisation’s success but that means putting managing people high on the agenda.

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Managing HR in a mid-sized company: thankless task or exciting opportunity?

A note from our sponsorAt the end of June, in our Advanced blog1, I bravely published my predictions for the HR function of 2020. With these in mind, it’s been fascinating to read about how mid-sized organisations feel about HR in 2012 and what they see as priorities for the future.

The need to ‘join the dots’ with respect to talent management is widespread and getting it right will become even more critical on the path to 2020 as people spend less and less time at any one company and flexible working and a more inter-generational workforce introduce additional challenges. Increased expectations on the part of the next generation of workers and the ability to quickly share information around the globe means that those companies who don’t join up recruitment, development and retention will find themselves shunned by those they would like to recruit.

As for the elements in the amber and green zones described in this report, these are the processes that can cause unnecessary pain for HR functions and their customers – yet are relatively easy to simplify and automate. And in today’s world, mid-sized organisations can benefit from the best solutions, solutions that are no longer reserved for only the large corporates. We’ve seen the impact it can have when HR functions are given the power to get these basics right and are then able to focus on the aspects of people management that can deliver growth for their organisation.

My last prediction was that automation technologies and outsourcers will take care of all HR administration, enabling the HR team to focus on strategy – HR on the board will be norm by 2020. From reading this report, this sounds like the wish of most of you. We hope we can play some part in the journey to that goal.

SimonFowlerManaging Director, Advanced Business Solutions

MethodologySource conducted an online survey with over 100 managers in mid-sized UK companies in July 2012. This survey was supplemented by telephone interviews with experts in HR management (listed below).

AcknowledgementsSource would like to thank all those that helped with the publication of this report and, in particular, special thanks to the following experts for their invaluable contribution:

Change Associates Grahame Russell Managing Director www.changeassociates.comEgremont Group Natalie Gordon Marketing Director www.egremontgroup.comErnst & Young Simon Constance Director – HR Advisory www.ey.comHay Group David Smith Sector Leader – Public and www.haygroup.com/uk/ Not for Profit True Picture Europe Martin Oest Director www.truepicture.bizPenna Consulting Jason Heward Head of Performance & www.penna.com ChangeZircon Management Consulting Dr Amanda Potter CEO www.zircon-mc.co.uk Jacky Griffiths HR and Talent Consultant

1 http://www.advancedcomputersoftware.com/abs/blog/

About SourceSource (www.sourceforconsulting.com) is a leading provider of information about the market for management consulting. Set up in 2007 and now with offices in London and Dubai, Source serves both consulting firms and their clients with expert analysis, research and reporting. It draws not only on its extensive in-house experience, but also on the breadth of its relationships with both suppliers and buyers. Source is owned by Source Information Services Ltd, an independent company, which was founded by Fiona Czerniawska and Joy Burnford. Fiona is one of the world's leading experts on the consulting industry. She has written numerous books on the industry including: TheIntelligentClient and The Economist books, BusinessConsulting–AGuidetoHowitWorks and HowtoMakeitWorkandBuyingProfessionalServices. Joy Burnford was Marketing and Operations Director at the UK Management Consultancies Association between 2003 and 2010, and prior to that worked for PA Consulting Group and has extensive experience of marketing consulting services.

About Advanced Business Solutionswww.advancedcomputersoftware.com/abs

Advanced Business Solutions (Advanced) provides leading integrated business applications and services that enable public, private and third sector organisations to retain control, improve visibility and gain efficiencies whilst continually improving corporate performance. Advanced prides itself on getting close to its customers by understanding their businesses and responding to their evolving needs.

Advanced’s software systems comprise core accounting/financial management, procurement, human resource and payroll systems, integrated with a range of collaborative, document management and business intelligence solutions to extend the value and effectiveness of the finance, human resource and payroll departments. These can be delivered as a managed or bureau service. Customers are from both the public and private sectors and include Companies House, Newcastle City Council, WH Smith, Royal Bank of Scotland, Aer Lingus, National Express Group, DFS, RSPB and Great Ormond Street Hospital for Children NHS Trust.

Advanced Business Solutions is a division of Advanced Computer Software Group plc, a leading supplier of software and IT services to the health, care and business services sectors.

Forfurtherinformation,pleasecontact:

LizMcDonnell,AdvancedBusinessSolutions

Email:[email protected]

Tel:+44(0)1604666857

288 Bishopsgate • London • EC2M 4QPTel: +44 (0)20 3178 6445

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