CHROs should clearly define transformation success and build HR strategic capability earlier to get more value from HR transformation
Our first HR Transformation Report brings generally good news but with warning flags and specific guidance for CHROs who are planning a transformation. We find that many companies achieve their HR transformation goals but often more slowly, less completely and with less satisfaction than they expected.
Those findings, detailed in this report, provide three clear insights for how CHROs should manage their approach to HR transformation.
Finding #1: HR leaders were less satisfied than expected with HR’s effectiveness after the HR transformation. There were meaningful gaps between HR’s predicted effectiveness and the post-transformation reality.
Set collective and individual accountability for HRLT members: Your HRLT should have a collective metric around HR Transformation success that influences their compensation. The measure(s) should be the specific transformation goal(s) that you set before transformation and that your CEO is holding you accountable to deliver. We typically see metrics around cost or headcount reduction and a measure of client satisfaction with HR.
Clearly define post-transformation HR standards: Identify the three key performance standards for each sub-function (TM, TA, DE&I, Regional HR, etc.) post-transformation. These should be measurable standards with both the metric and measurement tool identified. For example, “Talent acquisition will manage candidates and hiring managers to ensure 95% candidate satisfaction with the recruiting process. This will be measured with a 5-question survey administered 60 days after Day 1. Scores of Agree and Strongly Agree will count towards the 95% standard.”
We conducted data gathering over a two month period in early 2021, soliciting participation through direct mail and LinkedIn. We received 252 responses and eliminated 47 of them. Criteria for elimination were: • Consultants • Responses from consultants who tried to resubmit their data as a corporation after initial rejection because they were consultants (tracked by IP address) • Duplicate IP addresses. When we found duplicate IP addresses, we selected the response with the most complete data. The participant pool is subject to all of the typical research biases including convenience sampling, impression management, faulty recall, etc. We believe the participant pool size helps to reduce the potential impact of these factors but it certainly does not eliminate the risk of them. 25% 10% 14% 9% 12% 8% 8% 6% 7% < $500M $0.5B - $1.0B $1B - $3B $3B - $5B $5B - $10B $10B - $20B $20B - $50B $50B - $100B > $100B P