Canadian HR Reporter

CANADIAN HR REPORTER July 11, 2016 FEATURES 15 HR CONSULTING Just-in-time HR: Passing fad or here to stay? There are pros and cons to be had – it's all about avoiding the pitfalls By Cissy Pau L et's time travel back 20 years. Take a company of about 500 staff, with the HR department employing nine employees — an HR manager, HR co-ordinator, HR admin- istrator, secretary, payroll and benefits manager, benefits ad- ministrator, health and safety manager, two payroll adminis- trators and a labour relations manager, with support from a vice-president and a CFO. Almost all HR expertise came from in-house generalists and specialists. External resources were required only occasionally — a headhunter, a labour lawyer, an actuary and an outplacement firm. Fast forward to 2016. ere is little possibility the HR structure for a 500-person company would look the same. With downsizing, rightsizing and restructuring, HR departments are leaner. HR staff need to be generalists with knowl- edge in many areas — knowledge a mile wide and an inch deep — from the strategic to the tactical. Automation and technology have reduced HR staff counts. With the streamlining of HR functions, the increasing use of technology in HR and the com- plexity of HR issues, it is virtually impossible for an HR practitio- ner to be knowledgeable and ex- perienced in all areas of human resources. Just-in-time HR has become a necessity for companies to main- tain effective HR functions. Just-in-time HR enables com- panies to outsource HR functions to external providers as needed, bringing resources in-house when required, and redeploying resources or ceasing relation- ships when they are no longer necessary. It's like the car sharing company Car2Go — borrow a car where and when needed, drop it off when finished, keep it all day if desired, and pay only for the time used. When just-in-time HR works, the benefits are numerous: Expertise: Companies get the most current, up-to-date infor- mation when it is needed. It's difficult for one person to know everything about the changes in foreign recruitment practices, newest benefits plan options, the pros and cons of different peer recognition software or the lat- est apps for employee training. Bringing in specialists as they are required shortens the learn- ing curve and allows for quicker implementation. Financial control: Pay for ser- vices only as they are required. Rather than committing to a full- time salary for an internal HR staff member to have or obtain the necessary knowledge, only pay for the service that is used. By outsourcing some of the HR functions, companies save on the costs of salaries, benefits, perks, pension contributions and other costly payroll expenses. Best practices: External pro- viders that specialize in a particu- lar area of HR will be current on best practices in the field. ey will be aware of or be on the cut- ting edge of research in the field. By relying on these experts, com- panies will be at the forefront of HR best practices and make in- formed decisions on what should be implemented internally. Challenges Outsourcing HR functions, how- ever, doesn't come without chal- lenges.When done poorly, com- panies may be in a worse position than they would have been had they done nothing at all. As an example, a company wanted to automate its perfor- mance review and 360-degree feedback process. Rather than designing a system in-house, it de- cided to outsource the set-up and administration, and automate the process. It spent hours sourcing providers, invested thousands of dollars to set up the software, and trained all managers and staff on how to use it. One year later, it found the product wasn't doing what was intended, it couldn't be adapted to the culture, and the provider increased the rates by moving from a one-time licensing fee to a monthly subscription model. As a result, the company changed providers, went through the set- up and training process again, and re-launched a new system, costing it hours and dollars. Avoiding pitfalls Some common pitfalls to avoid when examining a just-in-time HR model are: Communication breakdown: If HR functions are outsourced to external providers, information and communication flow may become hindered. Companies will want to ensure relevant informa- tion is shared with the outsourced providers so they can perform their functions effectively. If multiple providers are used, communication is further com- plicated because these providers may need to have strong com- munication between them to ensure they are not operating at cross-purposes. Management required: Out- sourcing does not mean internal staff can simply let an external party manage the entire func- tion they have been delegated. An external HR provider, while they have the expertise, still requires management. e client company still needs to set direction, convey the vision and follow up regularly to ensure processes are on-track. Compa- nies must spend time to ensure external providers are doing what they say they will do and are add- ing value. Employer brand dilution: An external provider should be treat- ed as an extension of a company's employer brand. By outsourcing HR functions, the employer brand may become diluted if the provid- er is not acting in accordance with the company's values, mission and vision, or if the employee experi- ence becomes inconsistent. Extra effort may be needed to ensure external providers can and do represent the company's culture, message and tone. is is particularly important if the pro- vider is in contact with employees on a regular basis. When considering outsourcing HR functions or engaging with ex- ternal HR service providers, ask the following: • Do they possess skills or exper- tise not currently available in- house or not needed on an on- going basis? • Have they been in business a sufficient length of time and will they be around for the foresee- able future? • If considering a technology so- lution or SaaS model, do they have a sufficient customer base to have worked out the bugs, or are they looking for guinea pigs to test their model? • How do they remain up-to-date on the latest developments or best practices in their area of expertise? • How will you manage the exter- nal provider and integrate them into your existing HR depart- ment infrastructure? Whether just-in-time HR will become the predominant way HR departments operate remains to be seen. What is undeniable, how- ever, is the pace of change and the advent of new technology make it difficult for HR practitioners to be experts in all functional areas. Reliance on external providers can make a lot of sense. Cissy Pau is the principal consultant of Clear HR Consulting, a Vancouver- based firm that offers HR consulting and downloadable HR solutions for small businesses. For more informa- tion, visit clearhrconsulting.com. Companies save on the costs of salaries, benefits, perks and pensions. working and the results would be shared with team leads and the manager for potential action. Vet recommendations Even though ownership of perfor- mance management moves out of HR, it must vet all recommended approaches to determine if it fits within the culture of the organiza- tion, the objectives of the perfor- mance management process and has a reasonable chance of suc- cess. Generally, the approach de- velops out of discussions between management and employees. HR has an important role to play that may include building skills, providing feedback on draft performance management pro- posals and suggesting options to enhance the process. As with any newly delegated responsibility, assistance and support will be re- quired. is can vary considerably depending upon the competency of roles and the skills of the parties concerned. e focus is on build- ing commitment and ownership through involvement by adopting a performance management ap- proach that recognizes both dif- ferences and commonalities. Make an investment Be prepared to invest time and energy to put in place an effective performance management ap- proach. For many, this is a learn- ing exercise and a change from the status quo, so expect there to be some rough-going. To reduce the pressure on put- ting together the perfect plan, let management and employees know there will be a debriefing within a specified period of time after implementation. Here, the review will enable the parties to iron out the kinks once they have had a chance to employ the pro- gram. By providing this review commitment, the negative impact to the new approach and the as- sociated change will be reduced. It is worth repeating that the provision to make changes and feedback on the process is an integral part of successful per- formance management. Roles and requirement change, there is turnover of both managers and employees and significant re- organization does occur. All may have an impact on the application of performance management. Ad- ditional resource investment may be required over and above what was arranged at the beginning. Find out the value ere are 13 factors that make a difference in organizational per- formance, according to First Break All the Rules — What the World's Greatest Managers Do Differently by Marcus Buckingham and Curt Coffman. Five of these relate to performance management — feedback, recognition and praise, encouragement of development, communication of progress and the opportunity to learn and grow. In other words, the performance management approach does not stand alone. Performance man- agement is integrated and is one of the tools management can use to encourage organizational and personal effectiveness. Know the options for implementation Expect that some will not com- prehend the benefits and value of this type of performance manage- ment. A lack of familiarity and ex- perience with this new approach may impose too high a resistance level for a successful implemen- tation. As well, an employer may not have the resources to roll it out through the entire enterprise. It may need, instead, to garner champions within the organiza- tion to trial a new performance management process for about a year. e advantage of such a beta trial will increase compe- tencies and confidence when the performance management sys- tem is applied within the entire organization. Use a separate process for non-performers Often, organizations will use the regular performance manage- ment process to identify, track and ultimately fire or improve outcomes. Once a non-performer is identified, a separate process is needed to handle such situations. Typically, this situation accounts for only a small percentage of the total employee population. A well-designed performance im- provement plan will garner about a 60 per cent to 70 per cent suc- cess rate. (Success here is defined as either improvement or the em- ployee resigns of his own accord). Conclusion Is all this effort worth it for a suc- cessful performance manage- ment system? In my experience, not one manager has ever wanted to return to the traditional per- formance appraisal form. More importantly, negative attitudes are dissipated by both employees and management with the more progressive approach. ere is also a greater level of commitment due to a perceived value to the process. ere will be movement on the scale from "I have to do a performance ap- praisal" to "I am looking forward to receiving formal feedback." Earl Silver is an HR consultant based in Toronto. He can be reached at earl_ silver@rogers.com. Negative attitudes dissipate PERFORMANCE < pg. 11

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