The New and Improved Human Resources Function
Watch/Listen here or on Apple Podcast, Spotify, or wherever you listen to your podcasts“I believe as the leadership team goes, so goes the rest of the company. So if you don't have that consistent and significant sustainable growth, you've got some work to do.” — Mike Goldman
“The number one driver of profit growth is people growth. And we need a function within our organization that owns building and executing and measuring a framework for people growth.”
–Mike Goldman
Traditional Role of HR
Historically, HR has been seen as a tactical function handling benefits, payroll, and employee relations.
The term "Human Resources" implies a utilitarian view of people, reducing them to mere resources.
Rethinking HR: A Strategic Approach
There's a need to redefine HR as a more strategic function, possibly renaming it to "Talent Development" or "Team Member Experience."
The strategic role of HR should include:
Talent Development
Team Structure
Employee Experience
Onboarding
Employee Communications
Talent Development
Accountability for talent development should be centralized within the organization.
Key aspects include optimizing recruiting, performance assessment, coaching, and succession planning.
Team Structure
HR's new strategic role should ensure that the organizational structure is effective, with clear accountability and success measures.
Employee Experience
HR should be accountable for the entire employee experience, from recruitment to retirement.
Developing an "Employee Promise" is essential to ensure a positive experience.
Onboarding
Onboarding should be a standout experience, setting the tone for a new employee’s journey within the company.
Employee Communications
Effective communication strategies must be implemented to keep employees informed and engaged.
HR should ensure the right messages are communicated at the right time.
Measuring Success
Success metrics for the new HR role might include:
Employee Net Promoter Score
Employee Retention
Talent Density Indicator
Conclusion
The redefined HR function should be the most strategic role in the organization, crucial for driving people growth and, ultimately, profit growth.
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Mike Goldman: The number one driver of profit growth is people growth. It's not great strategy or even great execution. If we have the right people and we're growing those people, we're going to drive profit. And that's the most important driver of profit. Because if we have a great strategy. With mediocre people, we will fail.
We're not going to beat our competition, but if we have a mediocre strategy with great people, those great people will figure it out. They'll learn and adjust, and we're going to win anyway. So if the number one driver of profit growth is people growth, we need to get more serious as organizations as to how we're driving people growth and who owns people growth.
So on this episode, I wanna dig into the role of HR, the role of human resources in doing all this. Because traditionally and still for many companies, most small and mid-market companies that I work with, human resources is still a very tactical function. It's about benefits. It's about payroll.
It's about employee relations, you know, in order to resolve conflicts. It's about employee handbooks. There may be some training thrown in, you know, back in the sixties and early seventies, it was called personnel. And these days it's called human resources. Well, think about the name, you know, I always say, you know, human resources just is just one step beyond personnel.
But as I think about it, I actually think, and I'm not suggesting we change back to personnel, but at least personnel has the word person in it. Human resources makes it sound like we're all just cogs on this machine where we're just a resource to get things done. And it's about more than that.
It's about people and it's about creating a great environment for those people. It's about creating an environment where people could grow.
So I want to suggest not only that we rethink. The role of the human resources function, but I think we ought to change the name of the function. I think the days of calling it human resources should be gone.
Let's call it talent development. Let's call it talent management. Let's call it team member experience. Let's call it something that's more strategic. But regardless of the name, let's talk about the role, because I see so many companies are really trying to be more strategic in how they treat people and how they coach people and how they develop people, but they haven't effectively defined or redefined this people function within their.
Organization. And in most small and mid market companies, they don't have the right person for it. Now I see in some larger billion dollar plus companies, they do have things like chief people officer and they define it in a way that makes sense. But for the majority of small and mid market companies that I work with, It's a role that is desperately needed and it's a role that has not been defined.
In fact, in some cases, I see CEOs that in their mind have started to redefine the role to be more strategic. And in fact, I remember being in a meeting with a leadership team that was having a challenge with employee retention. And I asked them who was accountablefor employee retention.
The CEO pointed to the head of HR and the head of HR look back and said, I didn't know I was accountable for that. So in some cases, the CEO has started to make the shift in his or her mind, which is great, but it hasn't been effectively carried out. So let's talk about this role that is desperately needed and either instead of, or in addition to the tactical, you know, benefits, payroll, employee, handbooks, that kind of stuff.
What does this new role need to look like? And I say, instead of, or in addition to, is there are two ways to handle it. That, that tactical HR role may stay and be separate from this new team member experience or, people or talent development role, or it could be combined as one I've seen.
Many more strategic. Leaders in this function that have part of their role, be more tactical in part, be more strategic, but regardless of whether it's one role or two, I want to talk a little bit more about the strategic part of that role and dig in.
And the first part of that role that I want to talk about is the idea of talent development.
For many organizations. Accountability for talent development is scattered. It's scattered amongst different, you know, line managers. It's scattered in that, oh, you know, employees should be, responsible for their own development. And as I always say when I talk about accountability, is if everybody's accountable, nobody's accountable.
So who is the one person? In your organization, the one person on your leadership team who is ultimately accountable to make sure that we are optimizing our talent development and within talent development, you know, I would put things like, optimizing the recruiting process.
What are we doing to make sure that we are Maximizing our chances of hiring people that have the best chance of succeeding, that hiring people that are the best fit for our culture, that have the best chance of producing at the level we need them to produce.
I believe it's this role's. One of this role's accountabilities is to maximize the recruiting process, you know, using a methodology like top grading and the book, who the a method for hiring is one I recommend all the time, but I believe within the talent development part of their function, they need to optimize the recruiting process.
They also need to make sure that there is a framework for assessing the Talent and assessing performance within their organization that is consistent across all leaders and across all functions. If you've listened to this podcast, you've heard me talk about what I call the talent density framework, which is my framework.
For assessing talent, and it's, the book I'm currently writing called the strength of talent. Maybe when you're listening to this, the book will already be out, but it's all about that. Talent density framework. So within talent development, we need someone who's going to optimize that recruiting process.
Someone who's going to put a framework around assessing talent, a framework around coaching and development. Now, while it is not this role, the, and I'll call it the head of talent development, for the moment, it's not. The talent developments functions responsibility to go and make sure that they are coaching and developing everyone.
But it is their accountability to make sure there is a framework so that leaders are prepared to coach. They know how to coach. They are prepared to have the difficult conversations. They have access to the training and development. that they need. They understand when it makes sense to cut the cord on someone that doesn't fit and they are held accountable to that.
So within talent development, again, it's optimizing the recruiting process, having a framework for assessing talent, a framework for coaching and developing talent. And lastly, within the talent development piece of this is succession planning. I believe it's this upgraded, more strategic form of HR, whatever we call it's their role to make sure that the next individuals that will be sitting around that senior leadership table are being identified and being groomed.
So they've got the talent development role. I also think there is a team structure role. I think it's this new upgraded strategic version of HR that hopefully is not called HR.team structure is an important part of the role. Understanding things like what are the functions of our organization? Who is the one person accountable?
Do we have measures of success, key performance indicators for each of those? Do we have the most effective team structure? In fact, on one of my recent episodes, I talk about how to structure the leadership team. And I think it's this new strategic people function that Is accountable for making sure the team is looking at that.
If not on a quarterly basis, at least on a semi annual basis. So we've got the talent development piece. We've got the team structure piece. Number two.
Number three, I'd say is employee experience. Someone who is accountable. From the time a new Prospective team member sees a job posting or hears about one through to them being recruited through to the interview process and the evaluation process, the hiring process, the onboarding process, the training process, the, you know, the life of that employee, the promotion process, the evaluation process, the Retirement process.
Who is accountable for end to end ensuring that we have the right employee experience? The same way we need the right customer experience. More importantly is we need the right employee experience. Because I would say you could do all the work in the world on your customer or client experience. But if you don't have an effective employee experience, Then you're not going to be able to take care of your customers.
So there's accountability for the employee experience. one way to think about that. and a good friend of mine, Brad Giles, who I've had on the show before, wrote a great book called made to thrive, all about actually the job of the CEO. But one of the things he talks about in there is, you know, Is having something called an employee promise.
An employee promise, much like a brand promise. And we actually shift gears and talk about a brand promise because more people,I think we'll understand a brand promise. So I'll explain that and then relate the two. A brand promise is, your Promise as a brand to your prospects and clients. It is the answer to the question.
what problem does your core customer have that you solve better than anybody else? And what's that promise? So, you know, Southwest Airlines for many years, their promise was, you know, low fares, lots of flights, lots of fun. What is that main promise that helps you understand not only what you're promising to your clients as a brand promise, but it's that, that.
North star almost that tells you what you want to say yes to and what you want to say no to. Then you have to make sure you're living that promise. So that's a brand promise. But just as importantly, maybe more importantly, we need an employee promise. What's the biggest challenge our team members have or prospective team members have that we sell better than anyone else?
What are we going to promise to our employees? Around giving them a challenging environment around developing them around being open and honest with them around allowing them to have impact. I don't know what it is for you, but each company needs an employee promise and there needs to be a way to measure whether that employee promise is effectively being executed on and whether you're succeeding.
On that. And I think a role of this new strategic people function is employee experience and making sure you're living, you're defining and living that employee promise is one important piece of that. So we've talked about talent development. We've talked about team structure. We've talked about employee experience, and then I'm specifically going to call out onboarding.
Now you can claim onboarding may be part of the others, but I'm going to could be part of talent development. It could be part of employee experience, but I'm going to call it out separately because so many companies screw it up so badly. I remember one of my clients, they actually brought in a new VP of talent development.
They were, starting to execute on exactly what we're talking about. And I was so excited. They bring in this new VP of talent development and she comes on board. And the first day she has no laptop, it takes her three days to get her laptop.and there were so many other screw ups. It was a great example of the first impression of a new team member, which lasts a lifetime being something.
That's totally screwed up. We need to make sure. That the onboarding process of a new team member, it's not just about making sure they have their laptop on time and their office, if they have an office or where their home office is set up, they're getting the training they need there, the benefits, signing up for payroll, all that stuff, of course.
But what could we do to make that a memorable? First day or first few weeks, what could we do to create a, an experience that will inject a level of, you know, passion about where they are and inject a level of helping them realize that they've made the right decision. They're in the right place. How do we make them feel like a member of the team, a member of the, I was going to say a member of the family, but.
Put that aside. I hate when people talk about a family culture. I've worked with too many family businesses that have horrible cultures, but so forget I said family, but how to make them feel a part of things, a part of the team from day one. So, so really designing the whole onboarding process is so critical.
And rather than leaving that up to each line manager to design on their own, the head of this new strategic people function, Should own that next after onboarding is employee communications, not just, you know, what some people think of as employee relations, which is, you know, how do you know, how do we resolve conflicts out in the workplace?
When do we need to get HR involved? To do that stuff, talking about somebody accountable for the overall optimization of how and when and what we communicate to our employees, should there be a monthly or a quarterly,all hands meeting? In the organization, what should the agenda of those meetings be?
How do we make sure we're getting effective questions at those meetings? How do we make sure the organization understands and feels a part of what's going on? How do we make sure that when there are. changes to strategy, changes to process, changes to your plan. How do we make sure that those are effectively communicated and cascaded down through the organization and why it's not always this functions job to execute on the communication.
They may not be the ones responsible for actually communicating this more strategic people role. should be the one to ensure it's the right message with the right frequency in the right way. So let me review those cause I want to talk a little bit about measures of accountability and wrap things up.
But we've talked about a number of things. Number one, we talked about Their role in talent development, which includes optimizing the recruiting process, the performance assessment process. And I hope to God that doesn't mean for you annual performance reviews, quarterly performance reviews. Those are the worst.
Invention I've ever seen in business is the annual performance review. Maybe it's a more effective one on one process, but again, within talent development, how do we optimize recruiting? how do we do a better job of assessing talent, coaching and developing talent and succession planning? So talent development, number one, team structure.
Number two, employee experience and the employee promise. Number three, onboarding. Number four, employee communications. Number five, I might be missing some things that you identify as important. I don't mean this to be an exhaustive list, but I hope this is a list that helps you define what's most important and what might be missing in your own more strategic people function.
Now, there are some ways we could measure. Every function needs some ways to measure whether they are succeeding. So in this case, given what we talked about, it might be an employee net promoter score. It might be employee retention.it might be the talent density indicator. And if you're not sure what that is, listen to any of my Previous episodes around, talent density or talent assessment, but real quickly, the talent density indicator is a KPI that I've created, using the talent density framework, which is basically the percent high performers in your organization minus the percent low performers.
So you get a number between negative a hundred percent and positive 100%. And while each line manager. Each function head should be accountable for their own employee net promoter score, employee retention, talent density indicator. I believe it's this more strategic people function that is the one person who is accountable for how that all comes together.
And the CEO and the leadership team, if they The talent density is low. If employee retention is low, if an employee net promoter score is low, I believe the leadership team should look to this new strategic people function and say, what's going on? How do we fix this? How could we help?
This role, as opposed to the traditional tactical role HR has played this new people role, talent management, talent development, chief people officer,team member experience, whatever you want to call it.
This role, I believe should be the most strategic role. Very often it's the least strategic role. It should be the most strategic role on the team sitting at the right hand of the CEO. So I always say, and I said at the beginning of this episode, it's the whole through message in my book, the strength of talent, the number one driver of profit growth is.
People growth. And we need a function within our organization that owns building and executing and measuring a framework for people growth. If you want a great company, you need a great leadership team. I hope I got you closer there today. Talk to you soon.