How to Assess, Develop and Strengthen HR Capability in Your Organisation
While HR spend a lot of time developing the talent of others, it can be hard to look inwards and understand your own strengths or weaknesses. That’s why we’ve created a definitive, step-by-step guide to building HR capability right here.
In this guide, we’ll cover how to define those strengths in the form of capabilities and walk through a five-prong strategy for optimising HR capability in your organisation.
What is HR capability?
HR capability refers to a collective set of skills, knowledge, behaviours, processes and tools that HR professionals must possess in order to perform effectively in their role. At scale, this makes up the HR function’s capacity to fulfil its objectives as part of the organisation’s mission.
How do you define HR capabilities?
Before you even start to list human resources capabilities, you need to know just what HR is doing.
Step 1: Outline the need
Allow us to offer a few points to get you thinking.
- Be clear on the organisation’s mission and values. Why does it exist? What does it do? How does it run? What is its unique impact?
- Understand HR’s purpose in the organisation. Is it employee experience? Employee life cycle? Performance management? Talent acquisition?
- How you want to grow. What value does the HR function generate, and how do you continue to get ahead? What roles do you have now and what is needed in future?
The point is to understand what the business strategy is so you can properly align HR strategy with the right outcomes. If you know what the north star is that you’re all working towards, it’ll be easier to design development efforts for capability building.
Step 2: Define the purpose
Then there are generally five factors to consider when designing a capability.
- Company strategy: How will this capability help achieve long-term goals?
- Market demand: Is there a need or demand for these capabilities in the market?
- Company resources: Do you have the necessary budget, people, equipment and the like to sustain the capability?
- Existing capabilities: Are you complementing or competing with existing company capabilities?
- Risks: Are there any potential issues that could arise from building any capabilities, financial, reputational or otherwise?
If we work within the behavioural category and these factors, we have an idea of what role a capability will play, like being a baseline ability for the HR team or a specific trait of HR leaders.
Step 3: Define the name
Every capability will describe a desired future state or outcome, even if it’s purely functional. So, in naming and mapping HR capabilities, you need to clearly understand what work is getting done.
That could look like:
- Onboarding new employees
- Recruiting and hiring
- Managing employee training and development
- Managing employee diversity and inclusion.
At the same time, capabilities are not finite like skills, which will expire and be superseded every few years. HR capabilities should evolve year on year as business needs and the market do, so there is a chance that what exactly defines business success may change in future.
If you’re creating HR capabilities from scratch, you can always look to third party frameworks and pre-built examples to get you started. We’ve done a lot of the hard work for you, compiling a comprehensive list of HR capabilities here, with descriptions, competency levels, and related capabilities included. We’ve even got other complementary sets in there, including leadership and people management, if you’re in need of additional capabilities for your HR leaders.
Just remember that any descriptions you source should still be contextualised to your organisation’s needs and voice.
Strategies for building HR capability
Building HR capability generally requires a five-step approach of:
- Engaging leadership for buy-in
- Identifying and analysing capability gaps
- Assessing capability maturity
- Building capability through L&D
- Consistently tracking progress.
If the CEO is the king, business leaders hold the keys to the kingdom since they:
- Act as champions and role models for ways of work
- Create and disseminate internal messaging
- Shape necessity for any new initiative in the workforce.
The issue with engaging leadership here is rarely convincing your CHRO of the need for HR capabilities. It’s about positioning them as the advocate amongst other leaders to make this one of the key business priorities.
An argument to lead out of the gate with? HR can ensure that capability building is purpose-built for business needs, by starting with those HR processes that drive outcomes like:
- Recruitment and talent acquisition
- Workforce planning and development
- Succession planning and talent agility.
Again, here’s a chance to prove the validity of a HR capability. Say you’re institutionalising training and development management as a capability. Both on its own and as part of a HR capability model, you’re codifying a way of work that directly impacts a business lifeline and improving a process that touches everyone. The Josh Bersin Company found that high-growth organisations create HR business partners amongst leadership, extending their credibility and experience.
The point is to frame HR capability building within the KPIs they know and care about. Show that you understand their strategic priorities (employee engagement, performance, process improvement), and it’ll help them articulate the urgency for introducing these capabilities.
Understanding HR capability gaps
There is an added layer required of an HR capability gap analysis. You need to ensure that capabilities are fully integrated with business needs, given all HR practices are meant to serve the business in some way. The point is that some functional capabilities, while ultimately contributing to business outcomes, can get away with being function-specific (such as speechwriting in communications or user testing in design). HR capabilities must always be in line with strategic plans.
To understand the HR capability gap, you can use a few different types of assessments.
- Manager assessments
- Subject matter expert assessments.
It’s best to use some combination of the three and triangulate the results for the most accurate view of individual HR capability.
Self-assessments can be run through an assessment tool as a way to centralise capability maturity information (more on that in the next section), or you can go the old pen and paper/spreadsheet/PDF route if that’s easier for team management. If the latter works better in your organisation, it’s still important to collate updates to individual capability to better analyse departmental.
Most capabilities come with a measure of performance, usually noted as competency or proficiency. Assessment will be on a scale similar to:
Assessing HR capability maturity
Capability maturity is the workforce view; in this case, the HR function. You can approach it in the same manner as individual assessments by self-assessing the human resources function.
This involves creating a checklist of important HR capabilities and rating the function’s level of proficiency in each area on a scale (not unlike the above). It gives you a general sense of where your HR organisation stands, and which capabilities may need further development.
Combined with what you know about individual capability, you’re able to lay out a HR capability maturity model or map. Each stage of maturity will represent a point on the maturity curve.
Think of it like a health check to diagnose what’s not working right and identify a “treatment plan” towards the ideal state of maturity. Given that each HR capability defines what work needs to get done, a maturity assessment is the first step in uncovering inefficient, redundant or outdated HR activities.
Building HR capability
You don’t necessarily need to introduce an entirely new training approach here, but you do need to reframe the methods to build capability.
Take stock of what you’ve already got. Maybe a learning management system and course library, a handful of onsite programs, the occasional offsite workshop for the executive team. Now let’s look at what information we have from this process so far:
- An idea of current pain points (from leadership)
- Current capability gaps (from assessments)
- The competency level of any existing capabilities (from maturity).
If we look to apply that to development, it’s about seeking to change competency to fill those capability gaps and ultimately address the pain points those gaps create higher up the chain.
So, we go back to the methods you’re already using for training and development.
- All those LMS or performance learning management system (PLMS) courses become on-demand to act as reinforcements in between long-term programs. You’ll probably need to create, refresh or source additional content here, but the point is to provide fairly evergreen content that answers a question in the moment of need.
- Those offsite programs, like cohort workshops, can cover the functional or “baseline” capabilities for the HR team. Social validation creates an us-vs-the-problem mentality, which helps with team bonding.
- Any onsite training is where the rubber hits the road. On-the-job training is the best way to contextualise capabilities. Peer mentors and stretch assignments are formalised methods, and make it easier to track performance outcomes.
Curate content around job roles as much as capabilities, too. If you can create visible career progression through capability development, you’re making it all the more engaging for employees.
The final piece of the HR capability puzzle is codifying process improvement.
That’s not just plain old lessons learned-style reporting. The aim is to align development efforts with strategic priorities without major interruptions, so that HR is always pushing the business towards its goals.
That aforementioned treatment plan? It comes into play here. Make capability assessments routine so that pain symptoms never become painful problems. Re-assessments also ensure the gap between maturity levels doesn’t require full-scale transformations of your operating model, for example. (Though we can’t deny that capability building does often call structures into question.)
To make it easier and to glean more accurate health data, tie assessment measures into each stage of HR capability building. That means looking at the employee level individually, and then collating that data to understand the organisation’s current state.
- Kick-off capability assessments as part of learning needs analyses before training design.
- Performance evaluations during and after training to evaluate if learning outcomes were met (generally explored through KPIs or competency). A PLMS helps make this link by measuring how performance has improved since learning was undertaken, as performance improvement is the only tangible method of demonstrating learning effectiveness.
- Heat maps that show the availability of a capability against its strategic importance.
Creating an HR capabilities model or framework and calling it a day will not build strategic capability in your human resources arm. You need to get prescriptive, both in diagnosing the performance issues driving the need for a framework and the methods for building capability in response.
The most strategic approach to building HR capability involves five key steps.
- Engage leadership to dismantle the status quo and create buy-in for capability building.
- Assess your capability gaps at the individual and functional levels.
- Evaluate the maturity of existing capabilities, so you know the exact starting point for competency.
- Tailor training and development to the specific performance gaps in individual HR professionals (this is the point where impact really happens).
- Continually track progress to understand what’s working, what’s not, and what capabilities are available to you in real time.
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