HR professionals govern and manage the most precious part of our companies: our people. Historically, though, Human Resource Management (HRM) has not been taken seriously. This in spite of the fact that according to Marius Meyer of SA Board for People Practices (SABPP) only 18% of CEOs feel confident that they have the right people in place to execute strategy, and according to HCI Africa, Human Capital is the biggest concern for CEOs and the biggest risk in business.
The misconception is that HRM is concerned with “soft” issues and is ‘not amenable’ to regulation. Until recently it is the sole business function that has yet to be systematised. Given that HRM is tasked with aligning business strategy and objectives with employees, it is imperative that there exist standards that govern the HR profession.
Modern developments in the field of HRM have laid the groundwork for a process through which over 100 South African senior HR practitioners, from a wide range of organisations, have contributed to the development of the SABPP National HRM System Model and Standard. This is facilitated by the SABPP, who has, for over 30 years, set HR standards in an effort to professionalise the practice of HRM, raise the standard of work in HR functions, and continually improve these standards.
Why are these standards necessary? Shockingly, only 13% of employees worldwide are actively engaged, while only 5% of employees understand business strategy. Taking a more positive view, statistically the average ROI on wellness programmes is 300%, and companies with good HR practices are 105% more profitable.
It is therefore crucial that HRM practices be improved, that any inconsistencies within these practices, sites, business units, companies, and industries be eradicated, and that every company talk the same HR language. This is especially necessary in education, where there is a move to standardise relevant HR definitions. Looking at one university definition of, say, “Talent Management,” in comparison to another’s understanding, or even that of the workplace, it is immediately understandable that there exist inconsistencies.
Measuring these standards
With tangible and achievable standards comes the ability to measure. Companies are thus able to assess their current situation, determine improvement objectives, implement actions to meet these objectives, and then measure the results.
The benefits of measuring and reviewing this data are numerous. Auditors can identify what, where, and how to improve a company’s efficiency and profitability by helping the management better understand their own HR systems. In addition, management, as well as shareholders, suppliers, and financial auditors, are also assured that the human capital risks in their organisation are understood, and effective systems (controls) are in place to manage them.
The South African context
On the home front, we have not performed well in effective employment relations and labour standards.
In fact, South Africa is said to be “rushing to the bottom” yearly in terms of human capital performance. This is hardly surprising, given that strikes cost South Africa R200 million+ per day, and we lose R12 billion a year due to absenteeism.
Here’s a brief view of where we rank globally:
- 48th of 57 countries on skills shortage, brain drain, and discrimination (Finnemore, 2009)
- 113th of 144 countries on labour market efficiencies (WCR, 2013)
- 143th of 144 countries on rigid hiring practices (WCR, 2013)
- 148th of 148 countries by IRO of employer-employee cooperation and labour peace (Sharp, 2014)
We have recognised that many companies have a lack of understanding when it comes to HRM, preferring to invest more in IT and other activities. Companies are, however, becoming more aware that an inadequate HR function becomes a barrier to innovation, that the use of standards will improve effectiveness and drive change and innovation, and that these standards are needed to improve the consistency and quality of people.
As such, South African companies are in the process of getting their houses in order, a journey that has been aided by SABPP who run HR Standards Workshops. In addition, some companies have stepped in and undertaken presentations and workshops for their clients, using a variety of resource materials available to assist companies who are implementing these crucial standards.
Digitising HRM solutions
Companies with engaged employees outperform others by 202% (Dale Carnegie Training Group), which is reason enough to implement HRM standards into your business as fast and as effectively as possible.
Companies understand that every industry will be digitally transformed and that the HR function must be included in this journey. As such, the process of implementing HR standards can only benefit from, and indeed should benefit from, the steadily digitising world.
Increasing modern technology allows companies to save time, money, and energy. This is especially true of the speed which digital solutions offer. You are able to get the right data at the right time, which helps to organise the work environment. For instance, everything from payroll to talent management is managed more efficiently with well-designed software and well-designed business processes maps.
Companies can now also take advantage of digital workforce planning and analytics tools, thus enabling them to visualise data, perform hierarchy-driven analytics and forecast trends, as well as analyse trend and talent movement.
The face of HR is changing, and it is not soon enough.
When we consider the fact that all business strategy and objectives must be aligned with employees, it is clear that more of our resources should be funneled into this business function. A distinct and authoritative voice must sound out what is needed, what is necessary, and provide explicit commentary on the achievement of progress with regards Human Capital. While there are no HR representatives included in the Board of Directors of some companies, perhaps with this new wave of understanding and focus, this is one of the key solutions.
Elsabe Bell is an HR Business Consultant at Britehouse and a trained HR Auditor of SABPP. An earlier version of this article was published in HR Voice, official magazine of SABPP. For more information about the 3rd Annual National HR Standards conference, visit www.sabpp.co.za