Building the capability of HR - Changeboard

Building the capability of HR

An ASHRM research report


About ASHRM Founded in 1991, the Arabian Society for Human Resource Management (ASHRM) is a society dedicated to the management and development of human resources and the exchange of information and expertise in this area. ASHRM is a not-for-profit organization that aims to be the ‘regional voice of HR’.

Our mission All the Arabian States recognize that human capital is the key enabler for their strategic success and HR professionals have a key role to play in building that human capital. ASHRM’s mission is to promote the human resource profession and advance the human capital capabilities of organizations within the region. It aims to achieve the following strategic objectives: to take a lead role in developing HR professionals in the GCC region; to assist organizations with developing their human capital; to develop a regional body of HR knowledge; and achieve international recognition through collaboration with other international HR bodies, as well as through membership of global organizations such as the World Federation of People Management Associations.

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Beyond HR: The Human Element

The appetite for change among the region’s HR professionals is abundant. The HR community is poised for a people-management breakthrough, so it is more important than ever to elevate the function with robust career development opportunities and equip leaders with the tools to demonstrate how crucial HR is to business success.


How well is HR perceived?

79

%

84

%

of respondents ranked the importance placed on HR by key stakeholders in the business as 7 or higher on a scale of 1-10

Just 14% ranked it at a 5 or lower

of HR professionals would like to improve the way HR is viewed in their business

The reality of what organizations do with the results of their measurements varies

Connecting HR and the business Organizations use a mix of ways to measure the success of their HR initiatives

62%

Employee engagement surveys

45

%

36

58% take strategic action

2% do nothing at all

%

10% do not even measure the results of their HR strategy

24% do little other than analyze the results

Analysis of retention data

Anecdotal feedback

HR professionals’ priorities

Analysis of nationalization figures

There is an opportunity here for HR to improve the impact it has on wider business outcomes

Where are the skills gaps?

The appetite for career development is high

Data & analytics, HR strategy design/execution and business acumen are the top three skills gaps among HR in the GCC

35% managing organizational change

19% talent management

23% aligning HR and business strategy

“Transformation requires a different set of skills and experience that most existing HR teams have”

Data and analytics 71%

HR strategy execution 69%

The future is bright

77

%

of HR professionals expect the success of their HR function to improve in the next 12 months

Source: ASHRM research conducted in association with Changeboard, 2015

Business acumen 60%

57% of organizations do not offer a continuous professional development plan for HR. Of those that do not, more than three-quarters 78% would like to do so

What will help elevate HR?

Skills development 63%

Sophisticated HR systems 58%

Leadership buy in 35%

There is recognition of the importance of upskilling and development


Building the capability of HR An ASHRM survey in partnership with Changeboard

CONTENTS Introduction 35 Executive summary 36 The perception of HR

41

HR priorities 44 Skills gaps 46 Connecting HR and business strategies

50

Taking action 54 Expectations for the future

58

Career learning and advice

59

The guru perspective 60 Summary and conclusions

62

About the survey 63

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Introduction As the Middle East emerges as a region of significance in the world, so does the need to transform HR into a more strategic contributor – to position the function as more than simply a personnel/administration department and therefore maximize HR’s contribution to business performance. People are organizations’ greatest resource and if HR wants to be positioned as a strategic partner, it must have the capability to leverage the strengths of all employees and develop high-performing teams that are focused on solving the right problems to move the organization forward. In autumn 2015, Changeboard, on behalf of ASHRM, carried out research with HR professionals across the GCC to examine the current state of the profession in the region, identify key challenges and unearth opportunities for the function to grow and develop successfully.

The survey – what did we want to find out? • How HR is currently perceived within organizations • The key strategic priorities of HR leaders today • What skills gaps currently exist within the HR function •H ow HR leaders are ensuring the HR talent pipeline is fit for purpose – building the capability of the function/CPD for HR professionals • Expectations for the future.


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Executive summary The appetite for change among the region’s HR professionals is abundant. According to research conducted by Changeboard, on behalf of ASHRM, the region’s HR community is poised for a people management breakthrough, so it is now more important than ever to elevate the function with robust career development opportunities and equip leaders with the tools to demonstrate how crucial HR is to business success. However, achieving this will not be possible without some significant challenges, as the survey reveals. While HR has made some significant headway on this agenda in the past few years, and the function is generally well perceived in many organizations currently, there is some way to go before HR realizes its true value. Indeed, an overwhelming 84% of respondents would like to improve the way that HR is viewed in their business. Much of this lies within the capability of the region’s HR professionals. The survey identifies some significant skills gaps among the HR population, namely data and analytics skills, business acumen and HR strategy design

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and execution capability. Without these core capabilities, it could be argued that HR is losing value. The majority of HR professionals (57%) do not have a continuous professional development plan in place. And of those who do not,

84

%

of respondents would like to improve the way that HR is viewed

57

%

do not have a continuous professional development plan in place

78% said they would like one – suggesting there is a real appetite for development in the region. The study also uncovered a number of challenges HR professionals are faced within their organizations. Managing organizational change is seen as the biggest obstacle by 35% of respondents, while 23% said being able to align the business and HR strategies is a major concern for them. Talent management was also seen as a significant challenge with 19% of respondents citing it as their number one HR priority. Being able to make the case for HR initiatives by demonstrating a return on investment inevitably affects the resources organizations have available to invest in the function, both in terms of time and money. More than half of those surveyed feel they do not have sufficient resources to tackle their number one HR priority effectively.

The survey also throws up a interesting insights into how organizations approach the measurement of HR initiatives and actions they take as a result. Most organizations conduct exercises (such as engagement surveys) at regular intervals, with annual or monthly initiatives most common. But there is a significant, increasing trend towards real-time data collection, with more than a fifth (21%) of organizations using this approach to gain insight. Coupled with the fact that 52% of respondents anticipated that increased use of HR systems would help their function improve in future, this shows a real shift towards use of technology.

“The region’s HR community is poised for a people management breakthrough” There is room for improvement around what is done to link HR initiatives and business priorities. Although 58% claim to take strategic action based on measuring the effectiveness of HR initiatives, 24% admit they do no more than analyze the results and 2% say they do nothing at all. Beyond HR: The Human Element

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“It is only when a tangible link between HR interventions and business success can be proved that those at board level are likely to really sit up and take notice of the importance of HR”

Some organizations, though, do undertake specific action to improve the impact HR strategy has on business outcomes. Respondents spoke about establishing formal coaching networks for employees, engaging people with CSR activities, organizing HR listening forums and holding regular knowledgetransfer sessions, as well as holding frequent presentation and communication skills development exercises. It is only when a tangible link between HR interventions and business success can be proved that those at board level are likely to sit up and take real notice of the importance of HR, whether that’s through increased productivity, lower recruitment costs or delivering better customer service. In reality, for many businesses that

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35%

Managing organizational change is seen as the biggest obstacle by 35% of respondents

fail to get on top of human capital practices, the link will be made in a negative way, through loss of talent, disillusioned and unproductive staff and higher numbers of dissatisfied customers. Nevertheless, there are many HR professionals who work hard to link their strategy with the business and demonstrate true commercial value to the organization as a whole. They feel proud of what they have achieved around improving relations

between HR and key business stakeholders – as well as the broader employee population – and have seen tangible results of their efforts. Many also had tangible career advice for others, much of which focuses around ensuring you speak the business language, interact with key colleagues in other functions and the importance of taking tangible action as a result of your interventions. In addition to garnering the views of the HR community, we also spoke to key influencers, experts and academics from the field of HR to establish where they feel the opportunities lie. The unanimous consensus was around HR’s ability to link its activities to the broader business agenda – and that HR professionals in the region must provide more clarity over this. As well as concentrating on building the capability of the profession through more robust career development opportunities, it was also suggested that bringing in talent from outside HR (for example, those with experience of other business functions such as finance or marketing) can help

teams understand their context in the wider business agenda. This knowledge sharing can only be beneficial as HR takes steps to becoming a more professionalized, emboldened function with a crucial role to play in the region’s future.

“There are already many HR professionals that work hard to link their strategy with the business and demonstrate true commercial value to the organization as a whole”


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“84% of HR professionals would like to improve the way HR is viewed in their business” 40


How is HR perceived? We began by asking participants how well they thought HR, as a function, was perceived in their business. More than two thirds said it was rated well (45%) or extremely well (22%). However, a significant proportion (29%) said that there is some idea of what HR does but there is room for improvement, and 4% said that HR’s perception in the business is poor, with little or no understanding of what HR does. Extremely well - everyone in the business understands the value of HR and what we do

22

Well - most people in the business understand what HR does

45

Ok - there is some idea of what HR does but this could improve

29

Poorly - no one understands HR or what we do

4

0

5

10

15

20

25

30

35

40

45

50

Percentage (%)

When asked on a scale of 1-10 how much importance is placed on HR by key stakeholders in the business (such as the CEO, board and other departments), the majority of respondents (37%) selected 8. A further 10% ranked it a 9, and 14% a 10. Indeed, 79% of respondents put it at a 7 or higher, with just 14% putting it at a 5 or lower. Yet when asked whether they would like to improve the way that HR is viewed in the business, an overwhelming 84% of respondents said “yes”. Some 12% said “no” and 4% were unsure. This suggests there may be a gap between the importance placed on HR as a concept and its ability to demonstrate its value to the rest of the business. Beyond HR: The Human Element

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CASE STUDY: SAUDI ARAMCO 60,000 employees 1X

5,000 Employees

Raising the profile of HR: Huda Al Ghoson, Executive Director of HR

Challenge Our HR strategy must reflect the vision and ambition of the company’s transformation program. Understanding the business and future direction of the company is critical for the successful performance of HR. A major challenge is ensuring we have a solid pipeline of leaders and talent with the required skills to support current and future businesses. It’s imperative that we assure a steady flow of qualified, productive and engaged people whenever and wherever we need them for business continuity throughout our operations. Maintaining a competitive, dynamic employee value proposition (EVP) can be challenging when you have a highly diverse workforce and four generations of workers, each with their own aspirations, needs and values.

Intervention We have recently rolled out our new HR strategy, which is based on three perspectives: business strategy, market trend, and internal assessment of organizational health.

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At the core of the strategy is our corporate HR vision – to create people advantage for Saudi Aramco. We have also identified three high-priority action areas to address over the 2014-2016 business plan: strategic workforce planning and analytics, leadership development and performance management. Our workforce model and analytics program allow us to understand the number of fully qualified employees each business line needs each year, breaking it down into almost 400 different job families. We can then scale this going forward, so we know what each business area needs in the next five, 10 or even 30, years. We have four approaches to our staffing strategy, including recruitment from the external market, developing and re-skilling existing talent, internal mobility, and borrowing talent through contractors and consultants. Our staffing strategy is supported by workforce analytics and a sophisticated workforce planning model that evaluates our internal and external talent supplies. This helps us forecast talent needs,

anticipate knowledge gaps and identify effective strategies to close critical workforce gaps. Our workforce planning model also facilitates the allocation of training expenditure to focus on developing talent in critical areas, and the early identification of redeployment possibilities to optimize the utilization of employee capacity.

“Our HR strategy must reflect the vision and ambition of the company’s transformation programme”

Results Our goal is to maintain approximately 85% Saudization level and we are succeeding in this aim. Expatriate employees will always be needed for knowledge transfer and to fill gaps in critical industry skills. Women’s recruitment has increased by approximately 20% over the past few years.

We assess performance against targets related to the number, quality and category of recruits. We also review the number of qualified applicants against the number of open positions to determine the effectiveness of our marketing and branding efforts. To assess quality, different measurements are used including psychometric tests, proponent surveys and impact on business performance.

Advice for HR Build credibility and trust early in your career, and maintain high ethical standards and professional conduct at all times. Learn and expand your knowledge in the business, work hard, believe in yourself, be confident, assertive and a team player. Develop the ability to overcome challenges and tackle complex issues. See things from different perspectives and be flexible, tolerant and resilient. Broaden your cultural, social and

intellectual horizons beyond the usual experiences; develop curiosity and critical thinking, share and seek knowledge and information from a variety of sources and expand your professional and social network. Seek a credible mentor or coach to guide and support you. Step out of your comfort zone and venture into new territories, and do not be discouraged or disheartened by setbacks and failures.


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HR priorities The most common priority for HR professionals across the GCC right now is managing organizational change, cited by 35% of participants as their number one HR priority. Aligning the HR and business strategy was also identified as a significant challenge for 23% of participants, followed by talent management, which was selected by 19%.

internal and external environments, this was ranked much lower in the UAE at 14%, where talent management emerged as the most pressing concern. Other priorities in KSA included leadership development and HR’s alignment to business (both 33%), followed by performance management at 25%. Budgetary concerns inevitably exist around any employee-focused initiatives, with more than half (52%) saying they feel they have insufficient budget and resources to tackle their priority.

Interestingly, the issue of nationalization – which has often been cited as a number one priority in studies of this kind – was identified by just 8% of survey respondents.

“Managing organizational change is the top priority for HR professionals today”

Trends by country

While 58% of HR professionals in Saudi Arabia cited managing organizational change as their highest priority, possibly due to the dynamic nature of both their

Managing organizational change Performance management Recruitment and selection Employee engagement Talent management Nationalization Leadership development Employer branding HR/ business strategy alignment Reward Other

44

6% 35 %

4%

17 %

23 %

0 % 10 %

15 %


10 % 8%

19 %

CASE STUDY: GULF BANK KUWAIT 1,600 employees 1X

5,000 Employees

Tackling nationalization: Salma Al Hajjaj, General Manager HR

Challenge We are working on increasing our Kuwaitization. We focus this at entry level, where we take on only fresh, young graduates. We want to grow the management team with the right number of locals, in order to have that balance between nationals and non-nationals.

Intervention We have launched our graduate development program, which is geared towards those who’ve been with Gulf Bank for between one and three years. It’s a nine-month program aiming to create what we call the “holistic banker”. We’ve selected 20 graduates with the aim of taking them through all aspects of banking. Within the program, we have a three-day residential focused on personal development, looking at growing your own potential and learning how to manage people, be creative, find your style of leadership and be innovative. We hope this will allow individuals to reflect on how they could become future leaders. Once they graduate, attendees will intern with international banks

before immersing themselves into different areas of our bank. We also have a mentoring program. Some of our top management have been assigned a graduate mentee to develop through monthly meetings.

Results The graduate program has raised awareness of areas of the bank that they wouldn’t normally be interested in, like back office. We’ve opened the door for them to consider areas that are usually hard to fill with locals. The mentoring program gives graduates exposure to senior people, and learn what it takes to become a leader.

Advice for HR: Leaders in general need to become role models. There’s nothing greater than someone walking away saying you’re their idol. Think about your legacy: it’s not about what you do, it’s how you make someone feel.


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HR skills gaps Across the GCC, data and analytics was identified as the area where HR professionals have the greatest skills gap, as cited by 71% of employers. Lack of HR strategy design/ execution skills was also prominent (identified by 69%), followed by business acumen (60%).

development, since it has to spearhead developing its employee base. Organizations use a variety of methods to train and develop HR teams. The most common method is in-house training, as used by 70% of employers. Others rely on external trainers (57%), coaching and mentoring schemes (49%), events or conferences (43%) or online training courses (38%). Professional qualifications were identified least, used by just 36% of employers – suggesting there is perhaps currently a lack of sufficient qualifications in the region or the appetite to become professional.

Interestingly, there were some notable differences among respondents from Saudi Arabia and the UAE. An overwhelming 92% of HR professionals in the Kingdom reported a glaring gap in HR strategy design and execution, while only 55% of those in the UAE believed this to be a gap. There are some efforts being made to upskill HR professionals, though in most cases HR has always taken a back seat in terms of its own Business skills/acumen

60

Financial skills

29

Data/ analytics skills

71

Talent planning skills

40

HR strategy design and execution skills

69

Relationship/ soft skills

29

0 10

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Within the UAE, a greater number of HR professionals seemed to rely on online training, at 41%, compared with only 17% in Saudi Arabia. With the massive adoption of web and social media in KSA, more than any other country in the region, there is a significant opportunity to tap into digital learning to develop HR skills.

20

30 40 50 60 70 100 Percentage (%)


However, the majority (57%) of organizations do not offer a continuous professional development plan for HR. But of those that do not, more than three-quarters (78%) would like to – suggesting a recognition of the importance of structured career development opportunities to enhance the capability of the function.

CASE STUDY: SABIC 40,000 employees 1X

5,000 Employees

Presence in 40+ countries

Building leadership capability: F ahad Al Sheaibi, Executive Vice President, Corporate Human Resources

Challenge

We used to depend on open enrollment programs that were given by third parties and not connected to business and individual requirements. SABIC needs many leaders to develop and drive the organization’s activities and operations, so we recognized the importance of nurturing leadership development from within.

Intervention With the introduction of the SABIC Academy, the process of developing talent and leaders is now managed and reviewed internally. The academy offers leaders from throughout the world the opportunity to meet in one place to engage in a variety of business challenges, network for learning, and exchange their experiences and opinions related to strategic issues. We designed a set of programs that cater for the needs of the company and the challenges it faces. We have more than 13

“SABIC needs many leaders to develop and drive the organization’s activities and operations, so we recognized the importance of nurturing leadership development from within” Beyond HR: The Human Element

47


programs, all delivered by SABIC staff. Some are focused on basic leadership, and basic business skills. We conduct 350 to 420 courses every year throughout the world, covering all of the significant business areas on which we focus.

“The process of developing talent and leaders is now managed and reviewed internally”

SABIC Academy is not a training center, and often uses a blended approach to learning, including e-learning and project-based learning. We have about 150 selflearning programs available online. Through these, the employee accesses the system, learns, is trained, tested, and obtains the results that evaluate his or her performance.

The Academy can also offer coaching for on-the-job training to employees. We have the ability to provide advice and guidance to staff who may be facing challenges at work around areas like productivity, performance development, or how to deal with the pressures of work. A qualified group is charged with this. It directly contacts employees and is separate from the academic programs.

Results:

350- 420 courses are conducted every year throughout the world

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So far, many SABIC employees have benefited from the development programs on leadership and functional learning. As for wider staff engagement, the programs are available to all staff through the learning management system and learning portal.

We want to ensure that people, no matter where they are located in SABIC, can benefit from the value we bring, either through attending instructor-led programs or other forms of learning – such as e-learning. We recently celebrated graduation of the first cohort of the company’s EMBA (Executive Master of Business Administration) graduates. This two-year course is not purely academic, but focuses on specific topics that directly touch SABIC business. The program was a sound investment to boost capabilities and a tool to evaluate our leadership. A number of talents were identified and promoted to leading functions. We can proudly say that it is a developmental and knowledgeenriching program. Our key aim is to help SABIC develop and educate its employees, and to face future challenges. We continue to work on making the academy an ideal

150

self-learning programs available online

center for knowledge sharing. One of the most important benefits of the academy is that it is a center where leaders are developed, through an organized process, following a single methodology, in an institutionalized way.

“Our key aim is to help SABIC develop and educate employees, but also face future challenges” Beyond HR: The Human Element

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Connecting HR and business strategies

Not connected

Generally, HR professionals across the region do feel that their HR strategy is connected to broader business objectives. When asked on a scale of 1-10 how connected their HR strategy was to wider business outcomes, almost three quarters of participants (74%) rated this as a 7 or higher. Just 8% rated this as 3 or lower. However, only 11% rated this as 10 (directly connected) suggesting there is further work that HR could do to have a broader influence on overall business objectives.

1

74%

rated 7 and above on how connected their HR strategy was to wider business

4

2

2

3

2

4

4

5

11

6

4

Directly connected

7

17

8

23

9

23

10

11

0

5

10

15

20

25

30

100

Percentage (%)

50


The majority of organizations in the region regularly measure the success of their HR initiatives or strategy in some form. The most common frequency for such measurements is monthly, which is the timeframe for 36% of organizations. Others (21%) undertake these more often, on a real-time basis – monitoring feedback and activity frequently rather than as a one-off exercise. Some 15% do so every six months; 15% do so annually, while 9% perform this on an ad-hoc basis. However, some 4% never look to measure the success of their HR initiatives. Organizations use a mix of ways to measure the success of their HR initiatives. The most common way is through employee engagement surveys, according to 62% of respondents. Additional methods include analysis of retention data (45%), anecdotal feedback (36%) and analysis of nationalization figures (19%). “We measure success against strategy, customer feedback and profitability,” explained one participant. Another added: “We review achievements against goals set at the beginning of the year. We also seek feedback from senior management.”

CASE STUDY: AL FUTTAIM 44,000 employees 1X

226 Brands

5,000 Employees

Positioning HR as a strategic contributor: John Harker, Group HRD

Challenge When I arrived in May 2012, the Vice Chairman presented me with a challenge: to help create an HR organization that can help the group achieve its ambitious growth targets. HR did not have a great reputation internally and we needed to improve our reputation by positioning HR’s role as a strategic support partner to every leader, at every level, to deliver on a common human capital agenda. The challenge was compounded because the company was growing fast and so filling seats with the right people was an

“HR professionals across the region do feel that their HR strategy is connected to broader business objectives”

imperative. An over-emphasis on hiring external talent was a costly drain on the organization. A more balanced approach was needed. From a people perspective, our primary focus had to be repositioning ourselves to maximize the opportunities open to us.

Intervention As the market is becoming more competitive for talented people we asked group directors and HR seniors: “What should we focus on to ensure we have the right people in the right place, at the right time and engaged to deliver the Al-Futtaim strategy?”. Together with business leaders, we developed a Talent for Growth strategy and at the core of this agenda lies our talent brand. Talent brand (termed employee value proposition in some HR circles) is at the core of our Talent for Growth agenda and where it all begins. To determine our attributes we held a workshop for employees with a broad range of tenure, age, Beyond HR: The Human Element

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culture, profession, and so on. We used the feedback to identify four attributes of Al-Futtaim group that determined why people joined us and why they are likely to remain – attract, engage, develop and retain. This formed the basis around which we have developed our Talent for Growth strategy. For example, people felt recruitment of talent was strong, but onboarding was weaker. So we have developed a one day ‘souk’ where new hires can go and get everything they need – their banking, medical and real estate information all in one place. This was something that was previously taking six weeks but can now be done in a day. Unless you have a clear organizational design and layers of accountability, it is hard to overlay a talent model. People need to understand how they progress from one level to the next.

“The majority of organizations in the region regularly measure the success of their HR initiatives or strategy” 52


1000+

leaders have undertaken an intensive leadership program

We have identified six levels from group CEO down and allocated all roles to those levels. This is now embedded in our talent framework so when we do our annual talent review we can identify at each level who are successors and potentials for next the level. Since 2012, more than 1,000 leaders have undertaken an intensive leadership program (Leaders for Growth); we partnered with ambassadors from the business around this change initiative. In each of our leadership programs, leaders receive a workplace challenge, go off and come back in six months to report back on what they have done. We have also implemented an annual talent review process looking at talent gaps, succession,

“Nationalization is always a priority but retaining nationals is critical” high potentials, and emerging national talent as an integrated process. Nationalization is always a priority but retaining nationals is critical. The government has a very attractive EVP for nationals so we are looking at family-friendly policies, making it easier for mothers to return to work.

Results The Al-Futtaim Talent for Growth strategy is having measurable effects. By comparison with the previous year: • employee turnover is down • feedback from employees about their career has improved and internal mobility – transfers and promotions – is up. When I joined only 12% of all roles were filled internally. By focusing on internal promotions and development, this has now increased to 25%. We are also seeing that managers and employees in the business are responding to HR in a new way. We are hearing comments about the value HR is bringing to their business. Executives are noting that HR is working directly and visibly to support the business’s

goals. In short, the reputation of the HR function is on the right track. We have learned that the success in the Talent for Growth strategy lies in its development; a collaborative process that has involved thousands of employees across the business. Al-Futtaim employees own this change agenda, it is understandable to them, proactive, it engages them and it delivers what the business is asking.

Advice for HR Engage with your businesses. Develop a strategy in partnership with your employees to ensure they own the agenda; it should be understandable to them, proactive and deliver what the business is asking. Be available to support them on their journey and develop tools they can own, be their support partner on route to their success. You also need to have the courage to challenge. We encourage you to be honest, challenge and call things out. That comes down to confidence, so having the skills and capabilities to do that are so crucial. If you stick to those values, you can truly drive value.


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Taking action The reality of what organizations do with the results from their measurements varies. While more than half (58%) claim to take strategic action, just under a quarter (24%) admit they do little other than analyze the results and 2% confess to doing nothing at all. Some 10% revealed they do not even measure the results of their HR strategy. The reported differences between Saudi Arabia and the UAE on their action orientation were very compelling, perhaps pointing to the maturity and appetite for change in HR within the countries, where 50% of the former reported to analyze results and take no action, and this was reduced to only 17% in the UAE. There is a clear ambition to improve the impact that the HR strategy has on wider

58%

of organizations claim to take strategic action

“There is a clear ambition to improve the impact that the HR strategy has on wider business outcomes” 54


business outcomes and organizations are taking a number of steps to do this. One organization planned meetings for key stakeholders from across the business and held open discussions about key challenges and how best to tackle them. This has resulted in an increased level of engagement across the business. Another organization reduced its HR activities and positioned culture between organizational purpose and strategy. “We now measure 20 key metrics mapped to four strategic enablers to demonstrate a shift from a past culture to a future, desired one,” revealed one participant. Businesses have also implemented specific initiatives as a direct result of feedback from engagement exercises. These include setting up a formal coaching network for employees, engaging people with CSR activities, organizing HR town hall forums, focusing on personal branding, holding regular knowledge transfer sessions, encouraging employees to be thought leaders by writing articles and holding frequent presentation and communication skills development exercises.

CASE STUDY: TANFEETH 2,500 employees 1X

5,000 Employees

Using data and analytics: Giovanni Everduin, Head of Strategic HR

Challenge We wanted to shift from being short term in the way we thought about value – moving beyond financial measures of value to a more robust measure, using human capital data. A business like ours can only drive value through its people, so understanding and getting the best from them is key. We didn’t know why they joined us, why they stayed or why they left. We needed data – and then we needed to move from having data to having insight.

“Analytics is allowing HR to see what is happening, predict what will happen next and better serve the needs of both our employees and our business”

Intervention

We started our workforce analytics journey by taking a closer look at our HR data. A common mistake I see is that people want to dive into the fancy analytics tools and dashboard, without doing the less glamorous work of cleaning the data. Like many other organizations, our HR data sits in an ERP (enterprise resource planning) system, but that doesn’t mean it is accessible or easy to interpret. Conflicts are common in databases and, depending on when and how you input information, you might find errors creeping in. We invested considerable effort and worked with experts to triangulate and sense-check our data. This enabled us to identify weaknesses in the processes we use to enter and maintain data in our system. Many of the data errors we identified were due to silos in our data structure. Updates made in one part of our system often didn’t flow across into other relevant databases and core elements of HR data were stored in multiple


55


different systems. We also found serious issues in both the validity and completeness of our data. All this made it virtually impossible for us to gain an holistic view of HR data, and prevented any real data analysis efforts. We have used cloud-based technology to validate, clean and consolidate our employee information into a single master database. In doing so, we’ve significantly improved the accuracy of our information without incurring large costs. We call this master base “our single source of HR truth” and it is the backbone of our HR analytics capability.

“Because we have been given the opportunity to showcase value, people are seeking us out because they see value”

For example, to understand the nature of attrition more clearly, we segment our employees into groups who have similar attributes. Using analytics tools, we can view hundreds of attrition rates for various groups of employees, which means we can identify spikes and trends among important populations, like our UAE nationals in junior grades. Because our attrition rate is broken down into segments, we can find the pockets and attributes of high attrition that are hidden within a headline statistic. Armed with this information, we can design an effective strategy and measure its impact.

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We also correlate attrition against a variety of employee demographics and key rewards and engagement metrics. Through this we have been able to understand the drivers behind attrition in the Tanfeeth context, which allowed us to build a model that can predict attrition.

Results Analytics is allowing HR to see what is happening, predict what will happen next and better serve the needs of both our employees and our business. We now have the insights to make more strategic decisions about our employees, their benefits and their performance. There are also many unexpected ancillary benefits. For example, fast real-time data on headcount, competencies and directly associated costs makes workforce planning relatively simple and significantly more accurate.

Upgrading our analytics capabilities means assessment data can be analyzed quickly and accurately, together with other key data such as performance scores and engagement. Internal and external (for example, regulatory) reports are easy to produce and our submissions are more complete and accurate.

We don’t just look at HR data – you need information to understand the contribution of your initiatives, such as customer satisfaction. Having a great analytical tool without the capability to interpret that data is useless. No tool is smart enough to give you insights, you still need to be able to find the insights yourself.

We can now quantify the impact of our HR initiatives. The moment you can do that and hit your P&L, it will change the perception of the value HR can bring. The biggest compliment for us is that business leaders are now seeking us out for help. Because we have been given the opportunity to showcase value, people are seeking us out because they see value. This is where some organizations in the region struggle – often HR professionals come from an administration background and find it hard to shift towards a strategic role based on critical thinking and problem solving. We will soon be applying techniques that allow us to identify and monitor critical skills groups within our business, so that we can see the informal networks that exist in the organization, predict attrition and identify future leaders based on a scientific view of their leadership attributes.

Advice for HR When it comes to strategic HR, learning agility and problem solving are key, as are critical thinking, analytical skills, presentation/ communication and strong diplomacy and changemanagement skills. You need to be able to manage up, down and horizontally, often against tight deadlines and within a lot of ambiguity.


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Expectations for the future When asked about the future of HR, responses were overwhelmingly positive. More than three-quarters of participants (77%) anticipated that the success of their HR function/strategy would improve in the next 12 months. Just 13% said they did not think this would improve, and 11% were unsure.

importance of upskilling and development. Having access to more sophisticated HR systems was highlighted by 58%, suggesting there is a appreciation of the value technology can add to the people strategy. Other significant factors included leadership buy in (35%), better access to reporting/metrics (35%) and more line manager support (33%).

In terms of what HR professionals thought would be the most important elements that would help their HR team improve in the next 12 months, ‘skills development’ was by far the most popular choice, identified by 63% of respondents. This suggests there is a recognition among the HR community of the

Though ranked slightly differently in the order of priority, the direction of the trends remained similar here across the region, including in UAE and Saudi Arabia.

Skills development

63

Improved employer brand

29

Improved nationalization targets

21

More sophisticated HR systems

58

Leadership buy in

35

Line manager support

33

More reporting/metrics

35

Better reward/benefits for staff

33

0

10

20

30

40

50

60

70

80

90

100

Percentage (%)

“77% anticipate the success of their HR function will improve in the next 12 months” 58


Career learnings and advice Respondents to the survey were also given the opportunity to add some advice for other HR professionals, drawing on their own career experiences. Understanding the business and speaking its language is seen as particularly important, both in terms of being able to justify human capital interventions but also enhance personal credibility when having discussions with senior stakeholders. “Stop talking about being strategic and instead do strategic things that support the business – don’t talk about it, be about it,” advised one. “Learn about your business as a whole and how you fit into its context. You can do this by making friends with finance, sales, business and line people so you can understand the environment you are operating in.” Many views focused around taking control of your own career development. “Continue to expand your knowledge of HR,” suggested one. “Learn, by yourself, on all sorts of topics – including HR, soft skills like active listening and mentoring, and your own company.” Ensuring that people are at the heart of what you do also featured strongly. “Remember to be

employee focused rather than just Excel spreadsheets focused,” warned one. “Put people first and they will take care of the business. Focus on talent development.” Another participant suggested HR should be rebranded to the ‘people’ function to ensure continued relevance.

“Stop talking about being strategic and instead do strategic things that support the business – don’t talk about it, be about it”

Finally, there was a clear appetite for change within the function which culminated in some participants sharing their enthusiasm for a more daring approach: “If you want to break the mold, you have to get out of old habits and form new ones. Be daring,” said one, while another added: “Transformation requires a different set of skills and experience that most existing HR teams have.”


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The guru perspective We also asked business gurus and thought leaders to share their views on the unique challenges of the region and offer advice to HR leaders operating in this context.

Dave Ulrich Our research on global HR competencies shows there are some unique HR challenges in the Gulf States region, including localization of talent (versus overreliance on expats), becoming less dependent on a single industry or product (such as oil) and competing in global, not regional markets. We found that Middle East HR professionals tend to score lower in the six domains of HR competence, need to have a balance of HR competencies to be seen as effective, and have more impact on business results when they offer integrated solutions.

These findings suggest a head of HR should ensure his team focuses on creating value for external stakeholders such as customers. This outside-in HR focus is newer for many HR departments, so it differentiates the good from the bad ones. Many HR departments emphasize success as measured by things that happen inside the company (for example, cost per hire) less than whether the employee hired has the skills that build customer confidence and revenue from key customers. We like to study and find future, not past, HR skills. These outside-in skills define the future.

Advice for HR Firstly, concentrate less on HR and more on the business. This means starting every conversation with the requirements of the business, not on the activity of HR. In addition, define outcomes of HR in terms of talent, leadership and capability. Make sure you can discern the required talent, leadership and culture for any specific business challenge. Also, create innovative and integrated HR solutions that will deliver these outcomes. Build an HR department that has clear roles and positive relationships. Finally, make sure that HR professionals demonstrate the competencies that deliver business results.

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Ram Charan Just as the CFO is the trustee for capital, financial affairs, and performance, HR is the trustee of leadership and the functioning of the organization. Does the organization have the right people in the right jobs? Is it developing the future leaders? Is the organization high performing and flexible to adapt to external changes on a timely basis?

“There is no reason why an HR person cannot become a CEO” These are the highest valueadded tasks and also enormous in scope and depth. HR needs to conduct them in partnership with colleagues in other functions. HR cannot let low-value tasks be a distraction. There is no reason why an HR person with that kind of high-level involvement in the business cannot become a CEO.

In the Middle East, HR is needed more than ever simply because there is a greater shortage of talent, and recruiting is the highest priority. Equally important is how the talent is deployed and retained. Many Middle East corporations are family owned and now have great need for CEO and top management succession. HR is highly needed.

Advice for HR Many of the finance-oriented transactions of HR, such as benefits and administrations, can be outsourced to local or multinational firms. HR should then link its contributions to the needs of the business. Hiring one or more HR people with experience outside the function can help. This is an emerging trend that is likely to continue, because it can help you understand and add value to the business.


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Conclusion The issue of HR’s capability is only likely to grow in importance over the coming months and years. For those working in the function, the biggest challenge – as always – will remain getting the senior level buy-in that will free up resources and encourage others in the business to understand the value HR can bring. Critical to this is the ability of HR leaders to demonstrate a tangible link between HR activities and wider business outcomes, and ensure that HR teams are sufficiently skilled in areas such as data and analytics, finance and strategy execution. This is where there is an opportunity for organizations to invest in the continuous professional development of HR practitioners, which could help in making that link with broader business performance. There is also a need to measure, monitor and improve any initiatives HR rolls out, with tangible actions throughout the organization, if they are to have any genuine impact. In some cases, this will involve moving away from ‘traditional’ HR models and embracing innovative approaches. Equally, HR professionals themselves also need to embrace the need to take ownership of their own professional development and broaden their perspectives through education and knowledge sharing. In the current volatile, uncertain, complex and ambiguous (VUCA) world, which requires organizatons to have the best human capital capabilities on board to pioneer future growth, simply paying lip service to the concept of HR is a dangerous game, and one which will result in the loss of key talent just at the time when it is most required.

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About the survey An exclusive survey by Changeboard, on behalf of ASHRM, sought to examine the current picture around the capability of HR in the GCC region, and how organizations are approaching this. The survey drew on responses from individuals based across the GCC. The survey drew on responses from 411 individuals based around the GCC, with the majority located in the UAE (61%) and Saudia Arabia (22%). Some 6% were from Qatar, 4% from Oman, 4% from Egypt and 2% from Kuwait. Respondents came from a variety of sectors, but the most common were financial services (10%), construction (8%), oil and gas (8%) and government/public sector (8%). The size of organization also varied; 27% had more than 10,000 employees, 8% had between 5,000 and 10,000, and 18% had between 1,000 and 5,000. Some 35% had between 100 and 1,000 employees, and 12% had fewer than 100. The seniority of respondents was high, with 49% directors, 20% decision makers and 27% in managerial positions. More than half (55%) of those who completed the survey worked in generalist HR, with 10% in talent, 8% in recruitment, 4% in dedicated employee-engagement posts, 6% in reward and 4% in learning and development. Other functions also featured, including business transformation, HR strategy and organizational culture.


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Further information and acknowledgements ASHRM would like to thank everyone who took the time to participate in the quantitative and qualitative aspects of this research. If you would like any more information on this report, please contact us: Abdulhadi Al-Mansouri, President, ASHRM [email protected] Mary Appleton, Editor in Chief, Changeboard [email protected]

About Changeboard Changeboard is a content publishing and content marketing specialist with a particular focus on the career lifecycle. We commission and curate leadership insights, talent insights and career insights for our global community of more than 250,000 HR and business professionals and distribute them in a range of convenient and digestible formats. In the Middle East, we are committed to producing world-class products for the development of the HR community, customized to the region. Acknowledgements We would also like to thank The Talent Enterprise for their help with the quantitative data analysis.

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