How utilizing marketing insights boosts HR evolution: new frontiers

HR has come far, but what’s next? In this article, we discuss two key lessons for HR to take on for continued evolution.

HR has made significant strides over the past decade. Most organizations have established HR business partner roles, and some have even transcended the conventional Ulrich model to reconfigure the BP role into a truly strategic advisor to top-level management. There have also been significant investments in HR technology, and new HR services have emerged such as help desks, team coaching, HR analytics, wellbeing programs, and more. All these developments have changed how we view HR. Now we are even beginning to see another paradigm shift where the HR model is being reinvented yet again.

Arguably, this evolution in HR is, at least partly, based on insights from our colleagues in the marketing department. HR has benefitted from professionalizing itself in accordance with these insights. We learned that the talent market must be viewed as a competitive arena, similar to the consumer and financial markets. We realized the importance of developing a competitive employee value proposition (EVP) and promoting it effectively (i.e., employer branding). We came to see HR as a service provider, complete with its own service portfolio, value propositions, process management and governance to ensure service delivery. We discovered the power of analytics as a tool to understand the needs of our customers (i.e., managers and employees), and more recently, we started to leverage “customer experience design” as a tool to improve employee experience.

However, there are more lessons to be learned, and especially two future lessons stand out: 1) delivering different value propositions to different customer segments and 2) personalization.

1. Delivering different value propositions to different customer segments
   This is a long overdue lesson. Customer segmentation allows businesses to identify the value potential in different segments and differentiate their investments accordingly, leading to improved returns. For example, developing and realizing “high-end value propositions” for higher-value segments and “low-end value propositions” for lower-value segments.

HR could benefit immensely by leveraging the same approach in their service delivery. By determining who, what unit, which process activities, and/or what locations disproportionately drive business value, HR can develop tailored and “high-end value propositions” for these higher-value segments to foster additional value creation.

This approach will require HR to deliver the same service in different ways to different internal customers. In addition, it will require HR to communicate the purpose of doing so in a way that does not generate feelings of unfairness in the organization. This is not easy but far from impossible.

2. Personalization
   Personalization is an emerging trend in the consumer world, as consumers increasingly demand more personal tailoring. This is also true for employees as employees are turning into consumers of career experiences. We are already seeing examples of personalization in HR today, although on a small scale. One example of this is in rewards where some companies allow employees to choose their own personal collection of benefits and perks to ensure an optimal balance between company cost and employee value.

   This trend has the potential to radically improve the employee experience as the value delivered to each employee will skyrocket. Imagine a future where employees can customize their entire career experience; choosing their manager, reward package composition, team, developmental focus, work location, schedule, integration of childcare, exercise and much more. Moreover, the experience can be changed overnight with just a few clicks of a button. And for those employees who feel that too much choice is a burden, the employer will present them with “career packages” to choose from, much the same way the travel and tourism companies offer different vacation packages for families, couples, and those in need of rest and recuperation.

   In the short term, this will provide a huge advantage in the competition for talent. However, in the long term, this will become the default expectation. HR will be required to enable personalized career experiences while simultaneously ensuring cost efficiency. To succeed with this, we believe HR will have to leverage and follow modularization principles when designing HR services.

There are, of course, many other lessons to be learned, but these two, we believe, will significantly improve HR’s value contribution going forward. Our recommendation would be to quickly reconfigure HR to enable the delivery of different value propositions to different segments and to start already now experimenting with personalization.