When comparing HR trends across Western European countries, I see few points of difference, except for France, which seems paralyzed and is experiencing a rough time of self-pity and disbelief. Human Resources policies in the Benelux region have always been quite strong and have kept pace with the best UK practices. Historically, Western Europe led the field in terms of good HR practices. However, further developments within Talent Management or personnel management in general have been slowing down during the last four years. In some cases they have come to a standstill.
Certainly, HR departments have been very busy during the financial and economic crisis. Countless reorganizations, repeated waves of dismissals, arrangements of early retirements and outplacements, stressful budget-saving exercises, frequent and difficult discussions with the trade unions…but no or little space to enlarge or renew HR policy. On the contrary! In the meanwhile, our demographic “age bubble” has been expanding steadily, although hidden by the cloud of the economic crisis. Generation Y has become increasingly important in many organizations, whilst the impact of a higher retirement age on the staff is still an enigmatic occurrence and a delicate issue for many management committees.
In other words, the external world didn’t stagnate and within all of our HR departments we were in a mode of a dominating and stressful operational crisis, which may well be the most awful period in our existence. We had an outlook on our world from our own “battle station” positions.
Now we are starting to see the light again, which we welcome after the obscure tunnel vision of the last years. The latest and most important HR trends in Europe show us that a majority of companies and organizations are starting to focus on cultural change management. Management committees feel a strong need to re-energize our organizations, to make a shift at an organizational level from “survival mode” to a renewed focus on important priorities: competitiveness and innovation; higher performance; aligning directors and the entire management team to define a new company vision and strategic direction; dramatically closing the gap in communication between executives and the rest of the organization; and a general need for positivism at all levels. Many organizations have reached their maximum stretch when it comes to downsizing and from a human and psychological point of view, we seem to have reached our emotional low in every country as if we are suffering from economical “battle fatigue.”
During a long crisis period, many management committees were staffed with “cost managers,” many of who swore by LEAN (and some even by MEAN). Marketers, business developers and innovators had to remain low profile; otherwise they were removed from decision-making bodies, either with kid gloves or the hard way.
Because of the slight, slow economic revival in some parts of Europe (for the time being driven by the boost of recovering financial markets and a stronger German market) and for some because of the will to survive, our “top-line” is given more consideration, as well as our turnover, new products, services and markets. More and more CEOs are convinced that a turnaround is absolutely necessary. New ideas and initiatives, business developers and innovation are again much needed in our organizations and in our policy bodies. Moreover, the redefinition of the organization and its performance culture is now high on the agenda of many business leaders.
As a result, the new HR trends in Europe are therefore logical and rather predictable. First, we see a return of coherent development actions in change management: aligning the management team in order to regain the hearts and minds of the employees and attempting to reboot a dynamic and positive spirit in the workplace. Various management teams had become dysfunctional as people perceived the crisis from his or her own silo and all have tried to protect their own team and business. Collaboration and cross-functionality are crucial. Getting integrated solutions into the market requires participative leadership and team play.
A second important and causal trend is the renewed focus on talent retention within many companies in Europe. Organizations need new “rock stars” and they have to be found preferably within their own ranks, because it is cheaper and more efficient. Many slimmed-down organizations inevitably have to hire new talent from outside as external catalysts, which results in other companies protecting their own talent from leaving.
Thirdly, competitiveness will increase rapidly in a European talent market that is demographically getting smaller and older. The organization with the most positive credibility and the best employee value proposition will win the battle. This is not unknown to HR; some enlightened spirits have implemented already well-functioning employee value proposition innovations. I refer to examples such as Frank Van Massenhoven, Tom Auwers and others who have been expanding “New Ways of Working” within the Belgian Federal government department of Social Security. Deloitte’s “Mass Career Customization” concept is actively aiming for a solution in response to an increasing need for individualization and paving the way for how flexible a large company can deal with this matter. Vineet Nayar is transforming HCL from a huge IT bodyshop to a dynamic success story by prioritizing the motivation and satisfaction of its employees.
Employers should ask themselves what they can offer to various generations and how they can flexibly address the individual needs and interests of their employees. It is clear that an HR policy of “one size fits all” is not attractive for anyone, not for generation Y, and definitely not for the future generation Z of 2020, nor for the 55+ generation. The value of “personal time” will increase worldwide in the 21st century, like the value of potable water.
The redefinition of the organization and performance culture is entailing a heavy transformation for our leaders, but even more so for our HR leaders and experts. A transformation in business is logical. However, for HR it will be not be easy because of one important phenomenon: we lost our positive credibility, entirely or in part. In past years, HR crisis management equated to getting the “dirty jobs” done towards our employees. As a result, HR’s reputation was tarnished and we have taken the compulsory role of “bad cop” in the internal business context: HR was actively and visibly present to decrease the number of staff. In plain language, this means firing colleagues (and friends). HR had to save drastically on staff costs and obviously on their own operating budgets as well. Important development initiatives have been canceled, promotions have been delayed, the “goodie bag” of benefits has been reduced drastically and so on (you are getting the picture). And now, our management is asking us to transform the organization in a pivotal manner to a coherent, positive, dynamic, innovating and competitive group of individuals. HR management, as the most logical strategic partner in terms of change management, now has to guide the entire organization credibly and convince all to strive for “more, longer, better, more diverse, more exclusive and newer,” whilst we still work with limited means.
This would be a very difficult change for any department or professional individual. How does one regain a positive image and how does one restore confidence among a group of people? How does one quickly rebound, superseding the negative perception and experience of yesterday? Will the resumption of pre-crisis HR programs be sufficient? Probably not. In my opinion, the best organizations will turn this moment into reinventing and redefining their HR strategy and policy. No to the melancholics, we will not be able to go back in time to 2007. The external world has changed too significantly!
How can HR reinvent itself and anticipate the new trends? In the past HR management has never been very strong in demonstrating a proactive approach. The principle of prudence, regulation and administration is deeply ingrained in our behavior, as well as the consolidation of the company operations, avoiding social unrest, paying salaries on time and being in conformity with the law.
In other words, every paradigm shift in HR will be painful and will require perseverance and vision. Leaving behind our internal focus and locus of control would be a good start. In my view, the identity and the growth of HR are strongly influenced by the Ulrich model. Many HR departments have been defined and built on the ideologies of Dave Ulrich. He has been dividing and consolidating the different HR roles internally. I have two misgivings about his ideas. First, it has led to a huge “copy and paste” exercise within the HR world. Big financial institutions, innovative technology companies and manufacturers have all copied and cloned the same HR processes and systems. An HR policy based on a specific strategic vision, on the unique identity of a company, on the specific cultural character of the organization, is rare. How can our HR processes and systems be cloned carelessly if we will have to leave a policy of “one size fits all” and if we will have to differentiate our employee value propositions from the competitors in the talent market? The unique aspect of the organization has to be reflected in the unique character of the HR vision and activities. HR policies cannot all be identical. Choices and innovation are imperative for those organizations that are ambitious or intelligent—for those who dare to be different.
A second, possibly more negative, effect of the Ulrich model is the unilateral focus of HR on the internal environment, on its roles within the company, on its contribution to other business processes. I firmly believe that the successful HR leaders and experts of tomorrow will be strongly connected with both the world within their organization and external trends and influencing factors. The future HR leader thinks like a marketer and understands the different segments in the labor market, studies the different motivational and employee satisfaction variables in order to comprehend the mindset of all the different “cats” we want to herd internally, inside the competitors and on the labor market. Today’s successful HR leaders are positioning the “employer brand” and the employee value propositions through social media, presenting themselves significantly different and positive amongst the best functioning individuals within the company. The future successful HR leaders are connected with and have knowledge of marketing, communication, technology, the social developments and diversity. They look at other companies as competing colleagues.
Finally, I would like to offer a cost-efficient suggestion to restore our damaged reputation and to point to our new identity. Let us stop using the term HR as initials for “Human Resources.” The term “resources” gives the wrong impression that we are still “herding sheep,” that people are a calculated part of the business model, next to material and financial assets. The term depersonalizes the human component. Staff is an essential (if not the most crucial) part in our operations yet it remains the most volatile and unpredictable element within the entire company structure. Think about the impact of individualization, the important chemistry between people and use your HR initials to strengthen “Human Relations.”