Human Resources Operational Excellence By: Pasquale Ferrara, Jr
The Human Resources profession has evolved at a rapid pace over the past few decades.  Demand for organizational excellence, talent acquisition, the pressure to up-skill and develop staff in a competitive labor market, managing a multi-generational workforce, and the unrelenting focus on employee engagement keep chief human resources officers (CHROs) up most nights. The strategic role that CHROs and HR business partners play in an organization are key to HR having a place at the decision table Understandably, the human capital spotlight shines brightly on HR professionals and they must rise to the occasion.

Human resources, however, extends beyond talent acquisition, management development, diversity and inclusion, and employee engagement.  To be sure, those are vital to an organization’s overall health and success and are being managed by talented professionals who are helping organizations deliver human capital and bottom-line results.  The operational side of HR, however, still requires an equal amount of attention.

A considerable slice of an organization’s financial capital (in the form of salaries and benefits) and an organizational risk (in the form of employee policies, HR practices and compliance, and regulatory and fiduciary concerns) remain within key accountabilities for HR organizations.  Often, however, less focus is placed on these critical HR operational responsibilities.  

Human resources operational excellence can be measured, and addressed, in three areas.  First, day-to-day operations of payroll services, benefits administration, compensation management, human resources information systems (HRIS), and regulatory and legal compliance. Second, HR operations staff.  Lastly, interdepartmental cooperation, particularly with other operations-focused teams in finance, operations risk, systems security, internal audit, etc.

OPERATIONS


Although most organizations have outsourced to third party administrators (TPA) their payroll, benefits, retirement plans, and other administrative duties, operational accountability remains within the HR department.  Accountability, despite what some providers may say, is never fully outsourced. Technology, in the form of state-of-the-art HRIS and artificial intelligence (AI), has become far-reaching within organizations. The demand is great for self-service technology, and most organizations provide comprehensive employee systems and are beginning to experiment with AI platforms for talent development.  On the surface, outsourcing, self-service, AI, and cloud-based systems appear safer, more secure, and more reliable. However, oversight of external TPAs, security of self-service systems, and the rapidly changing legal and regulatory environment that govern all areas of HR operations, are a monumental responsibility and ongoing headache for HR departments. 

Attention should be paid to monitoring providers to ensure that they are maintaining the same level of system security and regulatory compliance that organizations expect of their internal operations.  

Regular, ongoing oversight of payroll-provider accuracy to ensure compliance with myriad federal and state laws regulating payroll practices (When the Department of Labor (DOL) shows up on our doorstep, there is no handoff to others.) requires a sharp eye and ongoing diligence. Adherence to state and, increasingly more prevalent, local labor and business-practice legislation is an administrative headache.  Important as well is having and maintaining up-to-date employee policy manuals that are regularly reviewed so that your organization has the most current time-off, sexual and workplace harassment, and benefits policies.  Monitoring the posting of current federal, state, and local labor posters in public-access spaces, as required by DOL, so that employees are aware of their current labor conditions and rights is a critical responsibility.

Keeping and maintaining an operational checklist is a quick and efficient way to monitor whether your HR operational oversight is on track. Engaging with outside counsel to maintain current employee policies and working internally with your system security department to stay abreast of cyber-security threats, and internal operational risk and audit departments to ensure that your operations meet the internal policy and external regulatory standards, are proactive and prudent business practices.

STAFF

Technology and outsourcing have enabled organizations to maintain smaller HR-operations teams. Reduction of manual processes and dependence on TPAs and cloud-based systems is reality.  Technology has relieved much of the administrative pressure and has allowed organizations to run smaller operations teams in all areas of the business, not only HR. However, it is vital to maintain a skilled, knowledgeable, and experienced operations team that now plays a dual role: technological and legal, regulatory, and compliance expertise.  As we saw above, accountability remains even as organizations continue to hand off the administrative functions.   When necessary, HR operational professionals need to communicate and show a firm understanding of the legal, regulatory, and compliance landscape as well as introduce technology to meet employee needs.  

Utilize available benchmarking and best-practice surveys and material available from organizations like Society for Human Resources Management (SHRM) to remain current.  Join industry groups that meet regularly.  Take advantage of free seminars offered by outside counsel firms or your benefit providers.  Stay current on legislative changes.   As many organizations rely on lean and agile business practices, HR teams should acquaint themselves with these principles so that they can maintain operational efficiency and operational accuracy while working in smaller teams.  Continuous improvement in the form of constant review of internal procedures to ensure that you are satisfying organization initiatives while adhering to all the regulatory and legislative changes is the sign of a strong, healthy HR operational culture. 

Interdepartmental Cooperation

Skilled HR teams enhanced by strong interdepartmental cooperation are critical to the success of the HR operation and the achievement of HR excellence. There are three areas where a breakdown in interdepartmental cooperation will lead to failures in the form of process breaks, operational risk, and inability to achieve excellence.

The first area is a lack of common mission and vision.  Working interdepartmentally means that members of all teams that are dependent on each other for success, for instance, finance, HR, audit, etc., need to be working towards a common goal. Identifying the commonality of purpose among departments is critical to not only HR success, but organizational success.  

Secondly, responsibilities should be understood across departments. Roles need to be designed clearly in order to move processes forward, avoid duplication of effort, and focus people and activities in the right areas.  Clearly defined roles and responsibilities can help prevent conflicts, disagreements, and finger-pointing.

Lastly, failure to communicate effectively between departments and the tendency to conceal issues until they become insurmountable, lead to disagreements, lack of trust, and worse.

Work towards creating a shared mission and vision.  Focus interdepartmental teams on a common goal. Strong leadership and team-building across departmental lines leads to greater cooperation, communication, and results. Organizations need to be aligned, working toward common goals, whether processing payroll, properly allocating expenses in financial systems, or properly accounting for people-related expenses. This includes all aspects of system security, operational risk avoidance, and compliance.

HR excellence can be achieved when the entire organization is moving toward, and supporting, a shared goal, HR staff is skilled and informed, processes are benchmarked against industry standards, and there is interdepartmental cooperation.  
   

For more information on interdepartmental team-building, HR talent development, and operations excellence, contact us at info@westminster-consulting.com or call us at 585-246-3750.

Pasquale Ferrara, Jr

Pasquale (Pat) Ferrara has 35 years of corporate human-resources experience in diverse human-capital roles with both domestic and international financial-services and service-delivery organizations. Pat’s most recent role was executive director of HR for a global financial-services organization responsible...

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