The business world is having to deal with change at an unprecedented rate, largely due to the modern technological revolution and today’s consumer’s insatiable urge for mass customization, technological innovation and instant gratification.
Businesses need to be alive to the changing external environment and be constantly evolving their business strategy so they can remain adaptable and responsive.
There is no time for the business strategy to sit still, which means there is certainly no time for the HR strategy to sit still. This means HR should be regularly updating its environmental control and monitoring mechanisms to ensure they can steer themselves effectively in the modern commercial environment.
Key External HR Trends
This starts with having a 20:20 vision into the external trends and forces acting on the talent management function and then updating your HR balanced scored card in line with this. For example, there are probably around 9 key trends that will be impacting the external HR environment and these are:
- Explosion in wearable technology in the work-place (IDC Research)
- Low wage economy, so people are working two jobs (Economic Policy Institute)
- Studies showing employees beginning to value employer honesty above all else (Randstad)
- Employee engagement levels continue to stay at rock bottom (Gallup)
- Increasing intergenerational tension in the workplace (Vital Smarts )
- Wider move to ‘inclusion’ and not just diversity (Global Diversity & Talent Strategies)
- Increasing dependence on data backed decision making (Bersin by Deloitte)
- Entering a 4 year period of very high staff turnover/low loyalty (Hay group)
- Demand for talent continuing to outstrip supply (Manpower)
Having understood these external trends, it make sense for the HR team to review its current balanced scorecard to see if it is really in tune with the modern era. I mean, are you still measuring ‘diversity’ when studies show the business world is beginning to embrace the broader description of inclusion?
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Or, perhaps your employer branding metrics are still fixated on salary and compensation when studies show that new hires, first and foremost look for honesty in a new employer. These are just a couple of examples of how you may need to be developing your balanced scorecard in line with the modern business environment.
Of course, there will be many external pressures acting on your business and HR function and there are many potential balanced scorecard strategies you can adopt to help meet these challenges.
And the best way to see through the fog is to conduct a simple SWOT analysis, much like we’ve prepared below to help you decided your modern HR priorities and focus your balanced scorecard.
- Located right next to University campus
- Able to attract talent in specific areas
- Pretty good training programmes in specific areas
- Managers good at motivating staff to meet monthly deadlines
- Pretty good compensation and benefits offering
- Bring a greater focus on ‘inclusion’ as well as diversity to widen access to talent
- Explosion in wearable technology in the work-place creates opportunity to use mobile apps to motivate staff
- Make more use of big data to improve decision making
- Lack of trust and respect in management.
- Struggling to attract talent in specific areas.
- Employee turnover levels above industry standards.
- Middle managers and especially disengaged.
- Demand for talent continuing to outstrip supply
- Entering a 4 year period of very high staff turnover/low loyalty
- Employee engagement levels continue to stay at rock bottom
- Low wage economy so people working two jobs
- Explosion in wearable technology in the work-place creating privacy issues
- Increasing intergenerational tension in the workplace
Is Your HR Balanced Scorecard Still Relevant?
A balanced scorecard must be in tune with the current times and the external environment if it is to be an effective steer for your HR operation. That’s why a balanced scorecard should be reviewed regularly for relevance, perhaps every year or every two years but, certainly no more than 4 years, because 4 years marks the end of many national political cycles, meaning there can be massive changes to the external business environment.
And having absorbed the information about the external environment, you can now ask whether your HR balanced scorecard is still fit for purpose, and develop new priorities.
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4 Key Priorities
Now, you may of course have your own priorities, but based on the SWOT analysis above four key HR priorities have emerged for and these need to be reflected in the HR balanced scorecard if it is to be relevant.
- Drastic need to upgrade retention programmes due to an up-coming period of high staff turnover
- New talent attraction strategy required as talent shortages are getting worse
- Putting data and statistics at the heart of HR decision making
- Widening the potential talent pool for position by greater ‘inclusion’
Turning Priorities into Action
Of course, high level priorities are all well and good, but if you are to turn these high level goals into actions you need to turn them into specific objectives that are narrow, precise, tangible, concrete and above all measurable. These objectives can then populate your balanced score card and drive/steer your HR business activity along the most rewarding route, delivering the greatest return on investment and bringing increased competitive advantage to your business.
Integrating these New Priorities into Your Existing HR Scorecard
Of course, if you are updating your current HR scorecard, you’ll need to make sure that these new goals are not only appropriately aligned with the business objectives, but that they are given appropriate importance/weighting in relation to your legacy/less relevant objectives so ensure a change in behavior and focus is brought about.
When engaging in any balanced scorecard project you might like to use a software system like BSC Designer which not only makes it easy to manipulate and update the data, it makes it easy to present it in a business like format, making it easier for you to collaborate and communicate your vision, plans and progress to the business.
Below, you can see an example of the HR Balanced Scorecard which we have developed in BSC Designer, using the information and insights from earlier in this article.
As you can see we have a HR balanced scorecard which is aligned with the core business strategy and which addresses some of the key trends impacting the talent management arena, particularly around the proliferation of big data in HR, the need to reduce the new hire skill entry level for your business, and the need to be more inclusive in your hiring and attraction processes to attract talent in a talent scarce environment.
There should be enough information in this article for you to develop your own HR balanced scorecard using an enabling software tool like BSC Designer.