The human resource (HR) function around the world continues to change as it shifts its focus from enhancing internal operations to maximizing contribution to the corporation’s business performance. According to the 2006 Global HR Transformation Study by Mercer Human Resource Consulting, half (50%) of organizations are in the midst of transforming their HR functions, while 12% completed a transformation within the past year and another 10% plan to begin the process within the next year.
HR transformation is the process of recreating or reinventing the HR function with the specific intent of enhancing HR’s contribution to the business. Mercer’s study, which builds on a similar one conducted in 2003, includes responses from nearly 1,400 organizations in all industries across Asia, Australia, Europe, Latin America, New Zealand and North America. It provides insights about the current realities, trends, obstacles and opportunities facing organizations’ HR functions around the world.
The study shows a clear shift in HR priorities. While 40% of survey respondents listed human capital strategy as a principal function of HR today, 64% expect it to become a key function within two to three years. Leadership development and talent management are other areas expected to become more important. Conversely, 46% of survey respondents listed operational excellence within the HR function as a priority today, while only 32% see it as a key function in the next few years. (See Table 1.)
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