Money, Time and Talent Wasted: The Downfall of HR Silos
I heard an HR success story the other day, or at least it started out that way. A friend who is a risk engineering consultant at a global insurance company was recounting a development program he attended, and the benefits of participation. He was able to network with peers from across the organization in an authentic way, and during the course of the program, he met several individuals with specialized knowledge that he plans to leverage to support his work in the company.
This kind of anecdote is a pinnacle of HR: acute knowledge transfer occurs as a result of a program designed to get all the global high-potentials in the same room, working together, learning from each other, and building new relationships.
But alas, the story nosedived after I probed more. My friend summed up the reality: “No offense man, but I hate HR. They think they’re helping but what’s really happening is I’m just being prevented from doing my job more effectively. Too much bureaucracy, too much redundancy.”
Too Many Silos
This company, like many, treats HR as a silo. But like Russian nesting dolls, each HR silo breaks down into a series of additional silos. They are departments within departments that go by familiar names like acquisition, compensation, L&D, workforce planning, and succession planning. In many cases the silos were born out of decades of poor software integration. It’s no surprise then to see a growing body of solution providers that specialize in linking multiple platforms and languages together.
HCI has long advocated for a systematically integrated approach to talent management. This is practically chapter one in HCI’s foundational Human Capital Strategist course, and we’re not alone in this thinking. Josh Bersin writes, “Organizations [with an intermediate or mature talent strategy] are far better at planning, managing people, building a learning organization, and redeploying talent.”
Madam CEO, Tear down these walls!
Organizations can’t just flip a switch to take their organizational design to the next level, but they can designate dedicated leaders to tear down the silos that keep HR functions separated. The objective is ensuring all HR gears are working in sync, as we know that a talent management strategy that is defined, tested and refined will consistently provide results that can guide business decisions and deliver a positive financial impact.
HCI members are constantly telling us about the growing complexity of jobs today. Individuals working in companies where organizational talent planning is stuck in neutral often report feeling their work environments are characterized by gridlock, discord, and imbalance.
To combat this, many organizations attempt to double down in one area to compensate for deficiencies in another without a clear understanding of the root cause. Others commit to implementing external solutions without considering all of the effects of such an investment. The overarching theme is many companies have a reactive approach to talent management; consequentially they eliminate any opportunity to be thoughtful or strategic about it, and the cost of this approach is employee disengagement, high attrition, and dissatisfaction.
A holistic and unified talent management approach impacts every element of the employee lifecycle. On April 30th, HCI senior faculty member Bruce Walton explains the blueprint for building a business case for a more agile approach to HR in making the case for What a Nonexistent Talent Management Strategy is Costing Your Business.
Don’t be afraid to get back to the basics and give your leaders evidence about the true price companies with an ambiguous and reactive talent management approach are paying. A conservative but thorough analysis of the direct cost of turnover from the Center for American Progress estimates that it costs one-fifth of an employee’s annual salary to replace that worker, plus indirect costs such as lost productivity and institutional knowledge. On average, the cash value of each employee is approximately $50,000 according to a recent CareerBuilder survey, a number that increases dramatically when considering employees with specialized training or more complex jobs.
Beyond the traditional cost-to-hire metrics is the positive cultural impact that a more mature talent strategy has on a company. Zeynep Ton, author of The Good Jobs Strategy writes in HBR, “In organizations where employee engagement has a direct impact on customer experience, a combination of investment in the workforce and operational practices benefit employees, customers, and the company.” This holistic cycle is applicable to other industries, regions, and business departments. It is scalable and repeatable. But, it requires that everyone is on the same page, in the same room and having the same conversation first.