Mr. Van Slyke

Human Resources, Recruitment & Training

Reinventing Hotel Human Resources

By Erik Van Slyke, Founding Partner, Solleva Group

For the past twenty years, there has been an extraordinary amount of dialog among executives, HR professionals, and academics about reinventing the human resources function. The hotel industry, in particular, has called for improved HR effectiveness to respond to the property-level challenges of attraction, retention and training as well as broader corporate concerns such as cost containment and improved leadership capability. The goal has been to strike the right balance between higher quality, more strategic service delivery and cost-effective, operational efficiency.

Unfortunately, most HR functions have delivered neither the value promised by more strategic HR, nor the operational efficiency expected of new technologies, 6-Sigma, shared services or outsourcing. More than ever, organizations must rethink their approach to HR. They must redefine the underlying assumptions that guide transformation initiatives so HR can achieve a higher level of operational effectiveness, and as a result, shape practices that drive improved organization performance.

Nothing has revealed the core of this challenge more dramatically than the implementation of new HR technologies. Even simple technology implementations have exposed the extent to which HR functions have tailored data, process and HR governance to meet the specific requirements of countries, divisions, functions and individual managers. This decentralized complexity has made it tricky to achieve both efficiency and quality goals because of technical constraints and --- more painfully --- organizational resistance to any amount of standardization.

Consider the situation faced by the senior vice president of HR for one global company. After two years of being challenged by her CEO to streamline the operations of her organization, she put forward a plan that promised not only to reduce the cost of HR, but also to deliver “higher value” services that would enhance the decision-making of individual managers.

Three years into the initiative, the SVP publicly declared the effort a success as they achieved short-term cost reductions and delivered new technologies to the organization. Privately, she confessed the function was still “an operational mess” because they were far from the transformation required for sustainable gains to efficiency.

The result? It still took 3 months to get a basic headcount report despite new technologies, lower cost HR process, and the supposed increase to staff capacity for more “strategic” HR work. And worse yet, managers still complained about burdensome administrative processes and poor advice from HR professionals. As one manager complained, “HR limits our ability to manage well by overemphasizing outdated and ineffective policies and process.”

The Origins of the Challenge

To be fair, despite the multitudes of executives pointing fingers, the operational and transformational failure of HR is not solely the fault of the function or its people. It has much to do with the origins of a back office function that was never designed, nor funded, for efficiency. HR was built largely to administer programs customized for specific employee groups, managers, functions, business units, and legal requirements.

As we approached the 21st century, however, three technology and management trends converged to launch the modern era of HR, propel the broader application of outsourcing and other efficiency tools, and establish the cornerstones of HR operational transformation.

1. In the late 1980s HR technology progressed from cumbersome data repositories to powerful engines for holding, accessing and reporting HR data and information. No longer was HRIS a glorified filing cabinet, but rather user friendly and supported by relational databases that made it easier to manage and manipulate data with greater flexibility.
2. The 1993 publication of Reengineering the Corporation by Hammer and Champy launched the process improvement revolution, creating efficiency efforts within corporations that eventually made their way to the HR department. More importantly, HRIS vendors integrated the capability into their tools, so HRIS did more than manage data: it helped manage HR process.
3. With the addition of Web technology, data entry tasks and other transactions could be pushed to managers, employees or lower cost HR staff without having to train them how to operate HRIS software.

These enablers drove efficiency and made it possible for businesses to restructure and, ultimately, rethink its operational design. Now HR could bundle all of the data-entry tasks for recruiting or learning management, for example, and move them from a $40-per-hour generalist to a $8-per-hour clerk. The notion of shared services was born and organizations evaluated which HR processes could be moved to lower cost internal or external providers.

Rather than continue the efficiency effort and reduce the number of $40 per hour generalists, however, the function realized that HR staff now would have the bandwidth to do more. They could help make managers or work teams more effective. They could provide deeper support in recruiting. Or they could help identify future organization leaders. And compared to the administrative, paper-pushing side of HR, this work was fun, made an impact and was valued by executives. HR had always provided some of this higher level support, but now organizations realized there were tools to help them deliver more of it.

The downside, however, is that in their quest to build this capability, most organizations rushed through efforts to streamline and settled for operational effectiveness that is "good enough." This choice not only has produced poor transformation results, but more importantly, it has perpetuated the function's inability to provide organizations with the information and tools required to make optimal decisions about human capital.

Getting It Right

There is a significant body of research to support the connection between good HR practices and a firm’s financial performance at both the corporate and business unit levels. But to build HR functions that consistently help achieve those results, HR must start from a new set of four principles that guide the delivery of services to employees and managers.

1. HR is operational.
   No matter how unglamorous it may seem, the core work of HR is administrative and transactional. This is the work that must get done. Employees must be paid, benefits must be administered, and compliance reports must be submitted. An organization can survive without a succession plan, but it will shut down if employees go unpaid. Managers will eventually figure out how to deal with a problem employee, but will fall apart if they don’t have a pipeline to fill vacant positions.
   

   Unfortunately, organizations have demonized transactional HR. Ever since David Ulrich published HR Champions, they have thought of this work as administrivia. And instead of doing it well, HR functions have gone seeking the Holy Grail of “strategic HR.”
   

   “We get so caught up in the word ‘strategic’ that we lose sight of the fact that there is a lot of value in the tasks that carry out the strategy,” says Laura Domchick, Director of Global HR BPO for Veyance Technologies. “To be able to do those well is critical. When Veyance decided as a company that we were transforming to a Lean organization, the strategy was set. Everything beyond that is in the execution of tasks necessary to achieve the goals. ”
   

   Whether HR achieves operational efficiency through in-house capability, outsourcing, or a combination of both, it helps its organization to manage costs and resources that are better applied to mission-critical activities and results.

2. HR is a strategic enabler.
   Rather than vie for a seat at the strategic table, the highest and best value of HR is to enable strategic decisions with sound information and analysis. One of the significant reasons HR transformation has failed to live up to its promise is because it has been built around the notion that HR should automate and offload transactional capability to provide more capacity for HR to make strategic contributions.
   

   The intent is not necessarily wrong, but in practice it has had the effect of shifting HR’s attention away from improving data management and optimizing processes in favor of focusing on delivering strategic capability . . . however that is defined.
   

   This misses the mark because it assumes that there is no value in data management. It also assumes that this so-called “strategic capability” is the ultimate goal and that it should reside in the function.
   

   The reality is that managers, and thus organizations, ultimately are accountable for those activities deemed “strategic HR.” Hiring, managing, developing and retaining employees are the responsibilities of managers, as are planning future workforce requirements, identifying leaders, and understanding required staff capability. Depending upon organization size or preference, HR is often asked to help with components of this work or to manage steps in the process, but the responsibility of strategic HR lies inherently in the departments and functions that interact with and are responsible for the employees on a daily basis.

3. The degree of HR’s operational effectiveness will determine the degree to which it enables effective management.
   The bottom line is that if an HR function is not operationally effective, then the organization will not be able to make analysis-driven, strategic decisions about people, no matter whether that capability is delivered by HR or enabled by HR.
   

   In part, this is because they will not have access to the data required for analysis. More importantly, this is because without executing operationally, HR will not have the credibility required to advise.
   

   Operational efficiency in HR is always accompanied by improved data management and analysis. It is only when HR demonstrates this capability—to effectively store and process human capital data, and to retrieve it easily and quickly for analysis—that organizations will be able to make effective strategic decisions regarding their human resources.
   

   Operational and cost efficiency are the table stakes. Data-based analysis and insight is the goal.

4. Innovation requires transformation.
   There is no escaping it. All events that bring step-level change require some amount of transformation. These events include new technologies, outsourcing, offshoring, shared services, and mergers or acquisitions.
   

   Even when the events are initiated primarily to rapidly reduce operating cost, transformation must be part of the process. These initiatives present changes to HR’s operating model and are catalysts for altering the way the function delivers required services. They affect process, roles, structure, and functional governance. As a result, they must be supported by well-designed change management processes focused on these components of the HR organization as well as the same components for the customers of HR—executives, managers and employees.
   

   Skip a step and the system has a gap that prevents effective integration of the innovation. That’s when well-intentioned employees fill that gap by devising individual work-arounds that create potential barriers to cost and operational efficiency.
   

   As organizations change, employees must be supported in that change. Tea Colaianni, former Vice President for HR of Hilton Europe, said during her transformation, “We will need to identify and develop the right people (HR staff) quickly so our HR teams can be switched on.”
   

   The starting point for transformation is with the gears of HR operational effectiveness: data, process and technology. Data must be accurate, accessible and standardized enough to conduct analysis across regions and business units. Processes must be standardized to create efficiencies of time and cost. And technology must integrated, intuitive and a catalyst for process.

With an eye toward continuous improvement, these four gears provide the torque required to execute transactional HR and manage HR information. In other words, the more effective HR’s configuration of data, process and technology, the better it can leverage the powerful capability of outsourcing and the greater its ability to enable strategic analysis and decision-making.

Erik Van Slyke is the founding partner of Solleva Group (www.solleva.com), experts at helping organizations plan for, implement, and manage outsourcing-driven change. With nearly two decades in consulting and HR leadership roles, his integrated approach helps business executives worldwide create, implement, and lead more effective organizational change, operational transformation and HR strategies. Regularly quoted on a variety of workplace and business strategy issues, Mr. Van Slyke’s just re-launched book, Listening to Conflict: Finding Constructive Solutions to Workplace Disputes (AMACOM Books), was named by Soundview Executive Book Summaries as one of the Top 30 business books of 1999. Mr. Van Slyke can be contacted at 609-460-4102 or erik.vanslyke@solleva.com Extended Bio...

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