Current affairs

The value proposition of HR

10 tips for building it

Monday, 20 de February, 2017

By Maite Moreno, lecturer on the Master in Human Resources Management at EAE Business School

“We need to know where we are heading.” This is how lots of conversations start off recently for Human Resources Directors in large corporations.

What is going on? It seems that there is an increasing number of voices questioning the function of HR and whether or not what it does is critical to the business. If this is the case, then HR needs to redesign its value proposition and must identify how it can contribute value to the company.

Value proposition? That’s a matter for business, some people may think. However, doesn’t HR offer services to employees, candidates, etc.?

Let’s suppose for a minute that the HR is a start-up. On this matter, Javier Megías says that one of the first things that we have to do is think of the new company’s value proposition, bearing in mind the most important factor of any company: the customers, because the success of any business depends on the relations between the customers and value proposition of our ‘business’. We have to identify the services that fit perfectly with our ‘market’. This is where we come to the crux of the issue: how do we know whether our market see the point of HR? It is very simple:

If the customers ‘buy’ our product, there is a point to our existence.

How do we create a value proposition for Human Resources?

1. Identify who are the key players (KPs) or, in other words, the stakeholders that have the greatest power and interest in HR, the people that have the capacity or authority to support our function or not, as well as their inclination towards our it, because they gain some type of benefit. This is where there has been the first new development in the story. Until now, the standard KPs were the employees and the management, but now the concept of KPs has expanded to encompass customers and shareholders.

2. Understand the KPs better through greater insight into them, their environment and their vision of the world.

3. Identify the KPs’ problems/needs that they are trying to resolve/fulfil by having a relationship with the organization. At the end of the day, there are various reasons that KPs have relations with the organization and we must be clear what these reasons are.

4. Identify why the KPs want resolve/fulfil these problems/needs.

5. Identify obstacles that the KPs face when trying to resolve/fulfil their problems/needs.

6. Identify what HR has/does that benefits the KPs.

7. Identify what HR has/does that reduces the abovementioned obstacles.

8. Generate multiple ideas that reduce the obstacles and create benefits for the KPs.

9. Test the value proposition with the KPs: ask them what they like most about the new value proposition, what they don’t like, the doubts that it raises and what they would add to it.

10. Adjust the value proposition based on feedback obtained from the KPs.

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