Raj Raghavan is the HR Leader for GE John F. Welch Technology Centre (JFWTC), Bangalore. Raj has over 20 years of experience in various aspects of Human Resource Management. His experience spans a wide range of expertise including Senior HR leadership for large organisations, Labour Relations, Organisation Development and Training, Client HR for Sales and IT to name a few. In this interview we try to understand how HR and its effectiveness is handled in the highly metrics-driven world of GE

How has HR changed over the years? To start with, the fundamental way we do business has changed over the years. If one looked back 15 years or so, first and foremost, the Internet and automation had a tremendous impact on the way business was transacted across the globe. This led to higher productivity and remote working from low cost countries which led to globalization in a very big way. Beyond just outsourcing work or processes, today most businesses are global rather than just ‘American’or ‘European’ or ‘Indian’. If I only spoke of GE, our portfolio is diverse and our market reach is global – more than 50% of our revenues are from outside the U.S. These changes have necessitated significant changes in the way HR provides products and services. Starting with talent acquisition, moving to talent management and mapping careers, compensation, etc., the function has seen itself strongly supporting the business. The advent of service orientated businesses have brought in increased thrust into areas like ‘HR Analytics’, hitherto unheard of.

In your opinion, do most professionals see HR as a business partner or as an administrative function with relationship skills?

At GE, our vision for the HR function is to “build talent, culture and capability for global growth”. This vision was developed last year with the help of a team of HR managers, validated through the perspective of academics and external consultants, and communicated to the broad HR community. This makes it rather difficult for HR in GE not to be a business partner! Another equally important point is about improving the efficiency of the HR function. We have proactively pushed for simplification, increased our responsiveness, fought bureaucracy, and never allow complexity to creep into our practices. What this means to me is that it is no longer effective to be an administrator with relationship management skills. HR needs to add real value to the business!

How does one draw returns on HR investment?

There are hundreds of theoretical models and if you search on the net, you will find them all! To me, investing in HR is not about investing in the HR function and its Managers; it is about investing in your people and having a robust organisation that supports their current and future growth.

To elaborate, let us take an M&A example. In a typical M&A scenario, the most discussed issues are business model and the related costing, PE ratios, profitability, manufacturing or marketing strategy and so on. Very few companies really spend time on making the merger work from a people perspective.

Many years ago, when I worked for then Brooke Bond Lipton, one of the key to-dos during the merger phase of these two beverages giants, i.e. Brooke Bond and Lipton, was a workshop named “Confluence”. I think it was a two-day affair in which an equal number of employees from both Brooke Bond and Lipton went through a very structured integration course of sorts. It started with teasers on getting to know each other and went on to more complicated business plans, structuring and so on, including integration into the market place, sales and manufacturing methods.

Come to think of it, up until then, these two companies were fiercely competing in the market place for shelf space and a share of the pie, and one fine morning they were merged! I think HR (as a function) played a terrific part at bringing together the senior managers. Many years hence, it may not sound that critical, but when we did what we did at the time we did, it was probably the best ROI.

What are the key metrics that leaders track to measure effectiveness of HR?

Let me answer the question a little differently and share what I recently read in GE’s HR web pages on six leading practices from America’s Top HR Departments. Even if your HR department has only two or three employees, it can still incorporate some of the best approaches to HR management used in the country’s top HR departments. “You don’t have to be well-funded to focus on what’s good for your employees or the right thing for your business,” says Charles Tharp, co-director of the HR management department at Rutgers University.

Tharp and other industry experts cite GE, Coca-Cola, IBM, Google and PepsiCo as five of the top HR departments. They share some basic approaches to HR that can benefit much smaller departments, including:

1. They know the organisation’s business. They understand clients, customers, competition and balance sheets and make sure HR staff does the same.
   
   
2. They actively seek input from lower-level HR staff. “A lot of departments don’t listen to front-line HR people, especially those with little experience,” says Patricia Mathews, founder of Workplace Solutions consulting firm. The five companies are magnets for résumés from top college HR grads partly because they listen to newcomers.
   
   
3. HR executives personally invest time in their employees. HR chiefs become personally involved in training and mentoring HR staff at all levels, and encourage HR employees to link their work to business strategy.
   
   
4. They manage aggressively. They don’t wait until somebody in HR resigns to promote a fast-riser who deserves it.
   
   
5. They rotate HR staffers in different jobs to try to create well-rounded professionals. They offer online and classroom training in HR.
   
   
6. They use HR technology and systems automation wisely. They invest in technology that removes routine administrative work, from HR information systems to succession planning software, says Nancy Glubie, AT&T’s executive HR director.

What prevents most organisations from having effective HR? Is this an Indian phenomenon?

There is absolutely no country-bias when it comes to effectiveness, efficiency or the lack of it. There are excellent HR organisational practices from many Indian companies from time immemorial. When the Tatas first started their integrated campus in Jamshedpur with schools, homes, hospitals and transport, no one really knew that it was pioneering what we today call “employee engagement”. We can go on and talk of excellent and effective HR practices from organisations such as Asian Paints, Eicher Group, etc. or the pay-for-performance culture in companies like Eureka Forbes.

All these are top-notch practices in whatever part of the world. I think the biggest impediment to the effectiveness of not just HR but any support function is the organisation culture and bias. Just think of how ICICI Bank revolutionized banking in India – could they have done so without some pioneering stuff from a people perspective? Or for that matter, the emergence of India as an IT powerhouse – where there has been vision and guts to make a difference in the business they are in, organisations have always found a way to have strong and effective HR processes, practices and above all, people.

In GE, do Six Sigma metrics apply to HR as well? Which aspects of HR are measured?

Of course they do. Most of our business HR functions are now on what we call “digital cockpit” where most HR metrics of the business are tracked and analysed. We continue to use Six Sigma methodology where we cannot find quick answers to complex questions but we no more make it a mandate to be a certified Six Sigma expert.

Top three measurements include (1) Recruiting – with lots of details such as Turnaround Time, Source of Hire, Cost per Hire, etc. (2) Diversity – we are very focused on measuring and increasing our diversity to represent the community we live in (3) Retention – again, with plenty of details.  

What has worked really well?

We are a lot more agile today in understanding the talent landscape and reducing our cycle time when attracting and hiring the best talent into GE. We also are a lot more aggressive, leveraging the power of our brand and strengthening our employee value proposition, especially when pursuing experienced and executive hires. There are great practices elsewhere that we can learn from, and some of our businesses are already experimenting with these, for example, by establishing recruiting centres of excellence.

Which HR challenges keep you awake at night?

As far as GE is concerned, currently 1 out of every 6 technologists worldwide are in India. By 2010, we expect this to become 1 out of every 4! This signifies how well the Indian technology workforce has impacted the overall corporation. At John F Welch Technology Centre, we are continuously moving up the value chain (from a technology perspective).

My team and I look forward to ensuring this happens in the next few years. The biggest challenge is - how to integrate hundreds and thousands of experienced professionals with advanced degrees into GE without in any way “preaching” to them. You don’t want to throw away good things people bring in with them while integrating them into the organisation.

The second challenge is about how to develop, deploy and connect with Generation Y. Our industries are facing a talent crisis the scope of which we are only now beginning to understand. The skills shortage and aging work force, combined with the increasingly sophisticated and global nature of business, have made talent recruitment, retention and management imperative. Finding strategic and innovative solutions that focus on harnessing the power of Generation Y – that is the next challenge.

However, the bread and butter challenge is that of talent acquisition, retention, engagement and compensation of our workforce. We are constantly trying to find the answer to the question “Why should someone join GE, a great company, when there are so many great companies around?”