How best to gauge the effectiveness of a human resources department? For the last four years, Workforce magazine has issued its rankings of the “world’s top companies for HR.”
This year, like last, in its list of 100 companies, the publication rated Google at No. 1, followed, in order, by Facebook, Coca-Cola, Deloitte and AT&T. Twenty-eight companies have made the list all four years. Twenty-five firms – Ultimate Software, West Monroe Partners and LaSalle Network, to name a few – joined them in this year’s rankings for the first time.
But how did the magazine arrive at such conclusions? What makes for excellence in human resources? Joined by the staff of its research arm, Workforce’s editors settled on seven main areas: workplace culture, employee benefits, diversity and inclusion, employee development-talent management, HR innovation, leadership development and talent acquisition.
“To realize the importance of these categories and take action to improve them pushes a company from good to great,” said the magazine.
To create the rankings, Workforce researchers developed a statistical formula to analyze publicly available data on HR performance and cull what they consider the best companies, the magazine said. The research team then used what workers at the businesses had to say, provided by Glassdoor Inc., the job review website, and stirred that into the mix.
Executive Recruiter’s Perspectives
Edward Batchelor, managing partner at Hardman Batchelor International, an Austin, TX-based search firm, who was not involved in the rankings, elaborated on the importance of each of these areas. Workplace culture, for example, he said is often cited as a critical factor in any workplace, and that’s true for human resources as well.
“Workforce culture is the glue that helps to hold your organization together,” said Mr. Batchelor. “A strong culture leads to a productive and engaged workforce. The top HR leaders know the importance of creating this culture from day one of an employee’s experience. As a result, they often have 90-day onboarding plans for employees to ensure they start with positive impressions. This time at the beginning is invaluable because it ensures that every employee has strong role models to mirror and have a sense of their role, organizational purpose and their leader’s expectations which leads to better retention and employee satisfaction.”
Steve Hayes, founder and senior partner of Human Capital Group Inc., seems to agree with that assessment. “As for which areas are most important, from my perspective, I believe talent acquisition and leadership development are what set companies apart from one another…and those who excel greatly in both areas are companies where every level and function of the organization takes it seriously, not just HR. Acquiring and developing future leaders is seen as the foundation from which to build a lasting enterprise…and the CEO down to line leaders are committed and engaged in both.”
7 Critical Competencies to Help HR Leaders Manage Change
Global companies are in growth mode, and that’s giving HR leaders more uncertainty to manage. More and more business leaders are concluding that competency in human resources is a core requirement for their company to succeed.
In the ongoing war for talent, meanwhile, employee benefits become especially paramount. Nothing is more important in times of high growth than attracting and retaining the employees that will drive your future business opportunities, said Mr. Batchelor.
“Further, there has been a generational shift in the type of benefits that attract employees,” he said. “Top HR functions have recognized the shift from the traditional benefit arrangement focused around increasing salaries, bonuses and strong retirement plans as a motivator. Now strong HR leaders focus a large amount of attention on broader opportunities for employee satisfaction looking at things like flexible work schedules, casual dress codes, tuition reimbursement and wellness initiatives.”
As the editors at Workforce understood, innovation is not to be ignored. It can well be argued that creating an innovative environment is the only way an organization can truly differentiate itself. But that means an HR function must work tirelessly to attract and, most importantly, retain the change agents in their business, said Mr. Batchelor.
“The only way this can really be done is through helping to drive a culture of innovation hires visionaries that focuses on constant growth and rewards for the right behaviors,” he said. “A top HR organization understands this is a critical part of their role. The most innovative HR leaders are focused on the development and engagement of talent as opposed to the old school approach of rewarding talent.”
Mike Myatt, chairman at N2Growth, a King of Prussia, PA-based management consulting and executive search firm, agrees with the seven areas chosen by the magazine. But he takes issue their value when taken by themselves. “While the seven core areas generally focus on the correct functions, it’s not the functions, but how organizations approach them that matter,” he said. “The best HR environments we see aren’t seeking to install best practices, but are looking to unlock hidden value through reimagining the what is in search of the what if.”
“One area that I believe is very important, but not specifically measured here, is internal customer feedback / perception of the value added by HR – both at the line and management levels,” said Mr. Hayes.
The rankings also seemed to give undue weight to the size of an organization. Small firms that are making big changes seem not to get the credit they deserve. “The biggest issue I have with the ranking is that the majority of the companies listed are very large organizations,” Mr. Myatt said. “Many companies breaking new ground and creating ‘next practices’ in HR tend to be earlier stage organizations. These companies are often under-resourced, rapidly growing enterprises and have to get HR right because there is no other option.”
What is less easy to measure, but essential to excellent human resource departments nonetheless, is leadership. “The HR X-Factor always boils down to leadership, but not just leadership at the top,” said Mr. Myatt. “The best HR teams strive for leadership ubiquity. They understand that if you tell people they are not leaders often enough, they will eventually begin to believe you. They seek not to leverage their people, but to create leverage for their people. They don’t try to put people in boxes, but exhaust all options to free people from boxes. They recognize potential, but they reward contribution.”
One core discipline that the rankings neglected to include, Mr. Myatt pointed out, was organizational design. Smart HR teams look to replace rigid frameworks with loose communities of collaborative networks, he explained. “Complex decisions are not reserved for someone sitting atop a hierarchical structure, but are driven down and across the enterprise closest to the point of impact,” said Mr. Myatt. “They think open-source, not proprietary, adaptive not static, actionable not theoretical, and progressive not regressive.”
“What makes a truly great HR function isn’t tools and resources, but an understanding of, and focus on, the people. They value execution over rhetoric, pursuit over preservation, ethics over optics, vision and discovery over short-term metrics, and people over process. I’ve always believed that but for the people, there are no products, services, platforms, culture, etc. Great companies never forget that at its core, HR is a people business.”
Workforce 100 Performance Index
|1. Google||51. Hitachi Data Systems|
|2. Facebook Inc.||52. JM Family Enterprises Inc.|
|3. Coca-Cola Co.||53. Enterprise Holdings Inc.|
|4. Deloitte||54. Toyota North America|
|5. AT&T Inc.||55. Texas Health Resources|
|6. Walt Disney Co.||56. CDW|
|7. Marriott International Inc.||57. Mars Inc.|
|8. Comcast Corp.||58. Hyland Software Inc.|
|9. Goldman Sachs||59. Intuitive Research and Technology|
|10. Apple Inc.||60. Kaiser Permanente|
|11. Intel Corp.||61. IBM Corp.|
|12. Nike Inc.||62. Monsanto Co.|
|13. KPMG||63. Aetna Inc.|
|14. Accenture||64. Navy Federal Credit Union|
|15. Wells Fargo & Co.||65. Publix Super Markets Inc.|
|16. American Express Inc.||66. American Fidelity Assurance Co.|
|17. Southwest Airlines Co.||67. T-Mobile|
|18. Cisco Systems Inc.||68. Baptist Health South Florida|
|19. Ultimate Software||69. CBRE Group Inc.|
|20. Delta Air Lines Inc.||70. Bank of America|
|21. Booz Allen Hamilton Inc.||71. Nordstrom Inc.|
|22. Lockheed Martin Corp.||72. Lego Group|
|23. Boston Consulting Group||73. BASF|
|24. Johnson & Johnson||74. Roche Diagnostics|
|25. Capital One Financial Corp.||75. Merck & Co.|
|26. Boeing||76. Atlantic Health System|
|27. Starbucks Corp.||77. Paycor, Inc.|
|28. FedEx Corp.||78. Orrick|
|29. Hyatt Hotels Corp.||79. JetBlue Airways|
|30. USAA||80. Edward Jones|
|31. West Monroe Partners||81. Humana Inc.|
|32. Nationwide Mutual Insurance Co.||82. VF Corp.|
|33. Prudential Financial Inc.||83. MasterCard Inc.|
|34. Genentech Inc.||84. Scripps Health|
|35. Salesforce.com Inc.||85. Fluor Corp.|
|36. Nielsen||86. Northrop Grumman Corp.|
|37. 3M Co.||87. Synchrony Financial|
|38. LaSalle Network||88. Paychex Inc.|
|39. Wegmans Food Markets Inc.||89. Hormel Foods Corp.|
|40. Cerner Corp.||90. EMC Corp.|
|41. EY||91. TELUS Communications Corp.|
|42. Verizon Communications||92. Grant Thornton|
|43. JPMorgan Chase & Co.||93. Southern Co.|
|44. Quicken Loans Inc.||94. Dow Chemical Co.|
|45. Aon||95. Dell Inc.|
|46. Mayo Clinic||96. TIAA|
|47. Procter & Gamble Co.||97. ADP|
|48. Hilton Worldwide Holdings Inc.||98. Amazon.com Inc.|
|49. SAS Institute Inc.||99. General Motors|
|50. Cigna||100. Blue Cross Blue Shield of North Carolina|
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Chase Barbe, Managing Editor – Hunt Scanlon Media. Original post here.