Rise of the HR entrepreneur

by 03 Apr 2007

AS BUSINESS becomes increasingly competitive, the marketplace is calling out a new brand of HR which requires a more entrepreneurial approach to service delivery, according to a new report.

This approach will reassert HR’s relevancy and reposition its role within the business as a key contributor to meeting strategic objectives. However, in order to achieve this, change must first come from the top.

“HR directors need to shift their thinking,” said Bill Farrell, national leader, people advisory services for Ernst & Young, which released the report.

“Thinking like an entrepreneur really requires a fundamental shift from working in the business to working on it. It means stepping back from the daily firefighting role to assess the commercial strength and weaknesses of the HR business and the reality of the marketplace.”

There are six steps to becoming a HR entrepreneur, according to the report, Redefining HR: The rise of the entrepreneur. These are: targeting the customer; evaluating the service portfolio; establishing delivery and distribution channels; determining revenue streams; articulating and communicating the value proposition; and establishing customer relationships.

One of the first challenges in becoming an HR entrepreneur is establishing credibility. Simply improving the delivery of standard services –assessing the business case for them, making sure they are being delivered through the most competitive partner network and either establishing or reviewing service level targets is the best first step, the report found.

“There is still a widespread perception that HR doesn’t add real value,” Farrell said.

“At the end of the day the credibility of the function lives and dies around the ability for HR to generate customer satisfaction, and the chance to deliver a service that actually meets the needs of the business and meets the needs of employees.”

However, many companies are still struggling with the basics of good HR service delivery, Farrell said.

“Although they see the vision and would like to become a HR entrepreneur, they’re really stuck in the operational challenges,” he said.

“Then there are those who are more advanced, who have either consolidated administrative work or outsourced it, and are ready now to work on business needs and deliver services to employees as customers.”

Once customer satisfaction with standard services starts to climb, the HR entrepreneur can collaborate with customers to provide more strategic services, moving HR into a more consultative role, the report said.

Innovation is key to the next step, and proactive HR professionals will realise that an effective response to the business’ needs is essential for the HR function to remain relevant.

In organisations that have a more advanced culture around HR, Farrell said line managers and executives are looking for the next service step from HR. They are looking for ways to improve the discretionary performance of their teams, looking for tools to help them deliver succession planning in an effective way and ways to help their mangers become more effective leaders.

“The credibility of the HR function lives and dies in its ability to generate customer satisfaction – to deliver a service that meets customer expectations,” the report said.

“Generally, the higher the customer satisfaction, the greater the demand for services.”


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