HR Intel: Answer the Crucial HR Question for 2017

Student meeting in library - TeamworkAfter a tumultuous 2016 and on the cusp of some major changes in regulations and protections for employees, your workers are undoubtedly looking for some stability from their employer. One of the best ways to demonstrate that is to ensure effective outreach and interaction with employees by being exceptionally responsive, thorough and clear.

Whether it’s face to face meetings or written policies in your digital handbook, the quality of the HR team’s communication with employees is one of the main indicators of stability and adaptability. And for many employers, the importance of getting that communication style right raises an absolutely crucial HR question for 2017: to centralize or not to centralize?

Rest assured, there is no right answer and there are certainly pros and cons to both approaches. Interestingly, this question is playing out in Silicon Valley, where tech giants like Apple and Amazon are using polar opposite approaches.

Apple has a very “unitary” or centralized business strategy, which requires all products, enhancements and software to be approved by various departments before they are rolled out. This results in a clearer, more consistent vision for the company and its strategy, but also substantially limits Apple’s agility and response time. That’s why improvements to the iPhone and the MacBook have been so miniscule in recent years and why Siri, Apple’s artificial intelligence, hasn’t evolved much. Things can move slower when you need buy-in from lots of people.

In this regard, Apple’s approach to product development resembles an HR “shared services” platform, in which a central HR department serves many different business units. This can certainly benefit the company in terms of the consistency and/or clarity of its message but without artificial intelligence, the human limitations of the shared services model mean that response times can suffer for sheer lack of bandwidth.

So the trend is very much to automate shared services by infusing it with data analytics, “bots” and blending it seamlessly with the Internet of Things (IoT). In other words, your future wellness programs might be run by robots that can track the physical well-being of your employees, and help identify optimal times to assign them creative or analytical work based on predictive productivity.

Amazon, on the other hand, uses an entirely different approach to business development, which can best be described as corporate compartmentalization. Rather than require all products to flow through a central product or marketing team – like Apple – Amazon’s different businesses are maintained separately, each with its own managerial hierarchy and balance sheet. That enables product teams to be more flexible and responsive, to develop leadership skills faster and to take ultimate responsibility for the success or failure of their own initiatives.

That also enables Amazon to move quickly into new markets and create products like the Echo and services like drone-delivery or an online grocery store without the corporate bureaucracy holding it back. For HR, Amazon’s approach is a lot like having Human Resources Business Partners (HRBPs) to support individual business groups. They know their own people better than shared services would and the HR-to-employee ratio is lower, so their response times should be better. What may suffer is the lack of consistency in approach and nature of responses from different HRBPs depending on location, among other factors.

Obviously, which structure works best for your organization is a very personal decision, but choosing the right approach for your business has never been more important. We’re right on the verge of perhaps the biggest sea-change in employment regulations in recent history, meaning there is lots of anxiety and uncertainty out there. And when uncertainty rears its ugly head, the stability of the company and the clarity of its vision for the future will help your employees sleep well at night.

International Compliance

If you ever have trouble “disconnecting” after work ends, you may consider moving to France. A new law in France requires employers with more than 50 employees to establish new procedures to ensure that work does not spill over into days off or evenings. That might involve setting a time each night beyond which employees are no longer expected to reply before the next morning and may also involve negotiating the parameters of after-hours communication with employee unions. The goal of the new law is to mitigate against corporate burnout, which seemingly affects a growing number of individuals in France, despite their 35-hour work weeks and (minimum of) five weeks of annual vacation.

Employee burnout is a global issue, evidenced by the recent resignation of the CEO of a Japanese company, Dentsu, after an allegedly over-worked employee committed suicide. Japan’s business culture is extremely pro-employer, so stories of employee burnout are fairly commonplace in Japan. What is notable is the idea of personal responsibility for both children and employees that both parents and business leaders in Japan seem to assume in times of crisis.

Domestic Disturbance

President-elect Trump has threatened General Motors with a “big border tax” if the company proceeds with plans to manufacture the Chevy Cruze in Mexico. Chevy doesn’t actually make the Cruze in Mexico, it makes the Cruze Hatchback in Mexico, which is mostly meant for international markets, but let’s put facts aside for a moment. It’s unlikely that Trump can take unilateral action against GM in the form of an Executive Order, but there actually is some political precedent here. In 1985, President Reagan placed a quota on the import of Japanese cars in order to benefit US automakers. As a result, those same US automakers hiked prices by about $1,000 per car because they knew they wouldn’t face as much foreign competition for their business. The takeaway is that American consumers are going to pay for this one way or the other, regardless of Trump’s threats.

On the other hand, Ford is now foregoing plans to build a plant in Mexico, and will instead invest $700 million in a preexisting factory in Michigan, where it will also add about 700 jobs. This is viewed as a vote of confidence in President-elect Trump, and the decision was also hailed by the United Auto Workers union, which has increasingly seen jobs for its workers move overseas.

Brick and Mortar Bloodbath

Macy’s is laying off 10,000 workers and closing 68 retail locations around the US. Sales during the holiday season were disappointing, having fallen by about 2% per year. Macy’s pointed to “changing consumer behavior” (ya think?), and will restructure parts of its business to adapt. Some of the expenses saved will be reinvested into what Macy’s describes as a growing digital business. The layoffs will account for about 7% of Macy’s workforce.

Wal-Mart has acquired Zappos competitor ShoeBuy for a cool $70 million in order to bolster its newest online retail offering, Jet.com. ShoeBuy’s catalogue was so large and appealing that Wal-Mart simply couldn’t replicate it at a cost-effective number. Wal-Mart is likely to pursue more of these types of deals, particularly where recreating a business unit would be difficult or where high-margin products or “hard-to-crack” brands prove to be an obstacle.

In the ultimate rub-it-in-your-face move, Amazon is opening a brick and mortar bookstore in Manhattan in the exact same location where a Borders Books store (RIP) previously existed. Amazon also has other plans for brick and mortar retail locations including Amazon grocery stores and a new concept store called Amazon Go, which will be devoid of checkout or cashiers. So perhaps it’s not simply that brick and mortar is dying. Perhaps it’s just that Amazon is the apex predator of 21st century retail.

How is this song related to HR?

In the last edition of HR Intel, we asked you how “You Can Call Me Al” by Paul Simon is related to HR. The story behind this song always cracks me up, but there’s an important HR lesson baked into it as well. In 1986, Simon and his then-wife Peggy were introduced to French composer and conductor Pierre Boulez, who may or may not have been hard of hearing at the time. Upon meeting Paul and Peggy, Boulez called them “Al” and “Betty” respectively, and the social faux pas stuck with Simon enough to write a song about it. Eventually, he blended the perceived slight and embarrassment with a healthy helping of mid-life crisis and produced perhaps his most recognizable solo song.

For HR, remember that every interaction with employees, even the seemingly mundane ones in which you mispronounce someone’s name by accident, can come back to haunt you. So choose your words carefully out there. It’s a brave new world.

We leave you with “Manic Monday” by The Bangles.

Tell us how you think this song is related to HR in the comment section below.

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