Business Standard

Is customer-centric HR the next frontier in HRM

Pankaj Bansal

Ankita Rai
Getting the right talent has moved to the top of the CEO's agenda. According to the annual CEO survey by PwC, 63 per cent of CEOs are concerned about talent shortages and the availability of key skills. But does HR possess the capabilities to deliver on the CEO's agenda? HR management guru, Dave Ulrich, says human resource needs to shift focus from inside a company to outside and concentrate on end customer alignment when hiring and mentoring talent. Our panel of experts discusses how HR can train its focus on the end customer

Focus on outcomes rather than output: Pankaj Bansal

Pankaj Bansal
It is time HR departments moved beyond just creating a culture of keeping employees happy and meeting their expectations. The customer needs to be treated as a major stakeholder in the workforce strategy, the workforce policy and the workforce technology, besides the work culture. Due weightage should be given to employees, investors and social frameworks while keeping the customer at the centre. Enter HR version 3.0 or the new world of workforce management. So while version 1.0 of HR was about process and policy compliance and version 2.0 focused around talent and technology. Now is the time to bring the customer at centre stage with V3.0.

In a customer-centric organisation, servicing the customer permeates every level, from top to the frontline and from the back office to the storefront. For example, a well-known airline company linked the employee incentive directly to customer feedback, when they provided performance cash vouchers to travelers (customers) requesting them to give them to employees who delighted them. These vouchers were budgeted in the monthly incentive payout of the employees.

The question is, is version 3.0 universally applicable? Yes it is. The driving force will be focus on reward and recognition, driven by customer participation and not just a performance matrix. Every employee's role is aligned to the customer - either they help in acquiring clients or help in delighting them. Each employee should get a taste of the impact they make in the life of the customer. If multiple companies are involved in preparing the final product, then employees of all the entities should have an understanding of customer expectations.

In short, organisations should focus on outcomes rather than output. Output refers to the number of pieces produced/calls made but outcome is about the impact created in a customer's life. Keep outcome at the centre and output will follow. It is important for HR professionals to understand the customer brand and align it to the employer brand. This will connect employees to the company's growth story and improve their performance.

Pankaj Bansal co-founder & CEO, PeopleStrong HR Services

Aparna Sharma
Keep the end customer in mind: Aparna Sharma

The common slogan among HR folks for a while had been that everyone needed strong 'people orientation'. Then came the concept of business partnerships as propounded by HR management guru Dave Ulrich. Now the task is to be 'business oriented'. Being 'business oriented' for HR in any organisation means keeping the end customer in mind while taking care of the employees who are the internal customers.

Customer centricity involves describing an organisation that is operated from a customer's point of view. Rather than developing new products and attempting to convince consumers to purchase them, a customer-centric firm develops products and services that the customer needs. For HR too, this means designing and nurturing an organisation with an outside-in approach that needs to be aligned as a strategic priority of the business.

A few things are key in designing a customer-centric organisation. First, structure it around the end customer and not the product; second, involve the customer in the design process to ensure proper alignment. Finally, empower the front line staff.

Simultaneously, the communication mechanism, the incentive and reward system and the overall employer value proposition (EVP) must clearly spell out the approach to attract the right talent and ensure focused delivery of results.

A clear EVP helps you understand your HR priorities and work out the HR agenda accordingly. Most companies with a good EVP do not have to engage in the war for talent and pay a premium to attract it. Skilled talent is almost always attracted to them. A good EVP is the driver of employee engagement, recruitment and retention. For business overall, a customer centric EVP has a positive impact on the return on investment through the employee lifecycle. But this is not easy. Being customer centric is more than being responsive to customer needs. A company must reorient its processes and plans around the customer's needs.

To begin with, the mindset and skills of the HR teams need to undergo change. Once they are re-skilled, only then can they partner with and support business and the end customers.

Aparna Sharma
HR expert & author, 'Reality Bytes'

Kiran Aidhi
Clients, especially in technology, expect HR to align with their vision: Kiran Aidhi

Human resource management (HRM) has metamorphosed in recent years and customer-centricity has come under the limelight. Customer-centric HR is now being recognised as the next level of HRM. This transition is due to the paradigm shift in the way product or services companies are delivering their offerings to their clients. Clients today are eager to understand all aspects of HR including how the HR counterpart of their vendor manages its talent engagement, talent development, talent acquisition, performance management, compliance and even the disciplinary model. This is particularly true of clients that engage with the technology or solution workforce for their business. They are interested in knowing how their partner intends to manage the people engaged in their projects.

Clients also raise concerns with existing processes or policies and expect the human resource department to align with them. The transition has affected not just the delivery side of the business but also the internal processes impacting and shaping HR policies and mandate.

Many of our clients, for instance, look to understand our HR policies and processes. They become part of our internal rewards and recognition programmes and also address specific groups like the women force of Virtusa and celebrate achieving customer delight index milestones with us.

The human departments can no longer take the back seat. It is expected to be agile in understanding and delivering according the clients' expectations. This is especially true for the IT services industry where people are the most important asset.

In this sector, customer-centric HR is becoming widely prevalent leading to greater engagement with the clients on HR matters. Companies that push the envelope by building processes and polices that are customer-centric give themselves a distinct competitive advantage in a competitive market.

Kiran Aidhi
Director, HR, Virtusa Corporation

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First Published: May 04 2015 | 12:12 AM IST

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