Monday, July 7, 2008

Human Resources Memo: It's Time to Transform Human Resources Management From the Old Personnel Department Model to HR 2.0

All to often in the food and grocery industry, particularly in natural and specialty foods companies where HR staffs are small or extremely lean and often limited in their duties, the human resources function tends to be limited primarily to three tasks: posting new job announcements and conducting initial interviews of potential new hires, processing paperwork, and responding to questions from employees about things like health insurance and other personnel issues. This is really the old "personnel department" model rather than what HR was supposed to look like when corporate America drop the former title in favor of the latter.

Each of these functions are needed and worthy ones. However, they tend to take up about 90% of a human resources department's time and efforts, leaving about 10% of staff time for employee development and related purposes and programs.

In today's fast-changing food and grocery industry, be it at retail, in manufacturing, distribution and logistics, marketing or sales, employee education and development has never been more important. In today's knowledge-based and digital economy and marketplace, human resources are fast-becoming the most important asset a food or grocery industry company has.

A big part of the problem with the HR function not just in the food and grocery industry but in all industries, is that HR has yet to truly be viewed by company CEO's and other top leaders as an important strategic partner in a corporation or businesses overall strategic plan and goals.

In today's challenging, human resource based economy and marketplace, that type of thinking is out of sink with reality. In fact, those companies who are making HR an integral strategic partner within their operations are seeing the fruits of gaining a competitive advantage over others who aren't yet doing so.

For example, it isn't an accident that in the food and grocery retailing sector, Whole Foods Market, Inc. and regional supermarket chain Wegmans, both being companies that have made HR a strategic partner in their operations, just happen to be two of the most successful food retailers in the U.S., as well as being the only two food retailing chains regularly named as two of the top 100 companies to work for in America.

In the food manufacturing segment, global giant Nestle continues to make HR a key partner in all the company does. Again, it's no accident Nestle is arguably the world's leading and most innovative consumer packaged goods company. The company's major push into the natural and wellness segment was do in part to ideas developed internally from the bottom up from Nestle employees, for example.

the consulting firm Deloitte Consulting LLP has been taking a close look at the current state of the HR function in corporate America. For example, here's what two of the firm's researchers say in the introduction to a just-published article, "Taking HR to the Next Level," based on a study the firm conducted titled: "Human Resources Transformation:"

"Seeing isn’t always believing. We’ve all experienced optical illusions that make us think an object is larger or smaller than it actually is. If the corporate world isn’t suffering from an optical illusion, it may have a problem with perception, especially where the human resources (HR) function is concerned. Even with a talent shortage and an increasingly competitive marketplace, companies often fail to see HR as a strategic partner. By the same token, HR itself may not realize how important a role it has to play in creating value for a company that goes well beyond cost savings."

You can read the article by Michael Boedewig, a principal at Deloitte Consulting LLP, and Jan Steele, one of its senior managers, at the link here: Taking HR to the Next Level. The study on which the article is based can be read at the link here: Human Resources Transformation. There's also an overview or summary of the study here: Human Capital. The consulting firm also has the article available as a podcast here.

Natural~Specialty Foods Memo believes the transformation of the HR function is important in order for companies in the food and grocery industry to remain competitive and to innovate.

Additionally, medium and small companies in the natural and specialty foods segments aren't prohibited from transforming and innovating the HR function just because they have small departments.

Rather, having small HR departments actually is a good argument for integrating the function better into a company's strategic, cross-departmental framework and strategy. Even smaller companies that compete in niche industry segments can benefit from this new HR thinking and implementation. In fact, they might benefit even more from a competitive standpoint than larger industry companies will.

Key to the success of this new HR strategic paradigm is not only leadership from the top of the company, but buy-in and participation from all employees. When workers--from senior executives and managers, to rank and file employees--see a genuine effort from management to integrate human and organizational development into a company's overall strategic framework, they generally respond positively, as have those at Whole Foods, Wegmans, Nestle and numerous other industry companies big and small.

Smart thinkers, leaders and managers will take a close look at "Human Resources Management 2.0," since more and more competitive advantage means having the best human resources vis-a-vis your competitors.

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