HR Competency Study Round 8: A Call to Action(s)

By Patrick Wright, Mike Ulrich, & Erin Burns

Since 1987 the “Human Resource Competency Study” (HRCS), led by Dave Ulrich and his colleagues with the Ross School at the University of Michigan, have gathered data on HR professional competencies every 5 years. Each round finds the vast majority of professionals in the field curious as to how the competencies have changed, and thus, what they need to do differently going forward. The latest round of the study was completed during 2021 when the full effects of the pandemic and racial injustice protests had passed, but their effects still lingered. With partnership from 19 HR associations, we gathered 360 ratings from over 25,000 colleagues who rated approximately 3600 HR professionals across the globe. Thus, it provides a detailed glimpse into the competencies of HR professionals that drive personal and business results. But before presenting the new competencies, we should first address what competencies are and how they are identified.

You can think of a competency as a pattern of related behaviors that provide evidence of some underlying knowledge, skill, or ability. Note that while they point to an individual having a characteristic, they are measured in terms of what that individual actually does in terms of the behaviors they exhibit. So, competencies are inherently action-oriented. We identified the competencies in this round of the study in two phases. 

First, as noted above, we gathered ratings on the extent to which the focal HR professionals displayed 80+ behaviors. We then subjected those ratings to a statistical tool called “factor analysis.”  This technique examines how each behavior correlates with all the other behaviors, trying to identify clusters of behaviors that seem to fit with one another and do not fit as well with others. We then look at the behaviors in each cluster and come up with names that describe the common theme. One of the key considerations with this round of the study was to name the factors based on the “actions” represented rather than the “roles” that they might describe. We wanted to have each competency clearly describe what actions HR professionals need to take. We provide both a visual and a verbal description of them below.

Accelerates Business refers to a number of aspects of an HR professional that focus on ensuring the success of the business. It requires first that individuals understand the external environment of the company, how they compete in the marketplace, and how it creates value for customers. It also entails using that knowledge to help influence decisions and decision makers in ways that help create effective strategies. Armed with knowledge and influence, HR professionals with this competency know how to prioritize demands in order to deliver results. Finally, this competency entails knowing when and how to drive the types of change that the organization needs to succeed. 

Advances Human Capability focuses on knowing the human capability necessary for the firm to effectively meet the demands of its competitive environment. This entails first ensuring that the develops all of the various pools of talent within the firm. Second, these professionals know which practices, systems, and structures will effectively support the capabilities that the firm needs to differentiate itself in the marketplace. Third, this competency entails an ability to know how to create a culture that supports diversity, equity, and inclusion.  These two competencies describe the primary role of accelerating the business’s performance through advancing the human capability of the firm. They refer to the next three competencies as the “pathways” through which HR professionals are able to do this. 

Fosters Collaboration describes the ways in which an individual can build trusting relationships with others in order to effectively navigate getting things done. First, relationship with others starts with an individual’s ability to manage their own self by being open to feedback and displaying confidence, humility, integrity, and ethics. Second, fostering collaboration entails building trust, working effectively with, and valuing people from different organization levels, skill levels, functions backgrounds, culture. 

In today’s environment characterized by massive technological and social change, Mobilizes Information describes the extent to which someone is able to navigate these changes. This competency first describes how an individual is able to anticipate technological innovations and then acquire, analyze, and apply information to help make better decisions. Second, with all the recent societal challenges such as pollution, racial strife, political conflicts, and health crises, this competency entails anticipating these changes and providing guidance about human capability interventions for how to most effectively respond. 

Finally, Simplifies Complexity refers to the ability to sift through the voluminous amounts of information and change and to respond calmly on issues of greatest importance. Part of this competency focuses on thinking critically rather than simply responding to the newest shiny object or rushing after the latest HR fad. The other part ties directly to the events of 2020-21, and describes how, under times of either great uncertainty or dangerous crises, an individual can harness the challenges to drive positive change in the organization.  

However, developing the model is only step 1. The competency factors that emerged from the data describe “what is” true of HR professionals. However, a more important question is “what should be” true, i.e., do these competencies actually relate to some measures of performance? 

We measured 4 performance dimensions. Personal effectiveness assessed how effective raters rated the HR professional in their role. They also reported how effective the HR professional was in meeting the needs of both Internal Stakeholders (e.g., employees and line managers) and External Stakeholders (e.g., customers and investors). Finally, they provided an assessment of the business’s results in terms of its performance relative to competitors regarding a number of specific metrics in the areas of Financial, Strategic, Customer, and Employee performance. 

The figure below provides an overview of the results regarding the relationships between each of the competencies and the various measures of performance. The bottom row reports how much of the variation in the performance measure was accounted for by the competencies. One way to think about this is to consider all of the variables (business strategy, economic conditions, direct competitors, products, customer preferences, etc.) that could cause the variation (i.e,. why one person or organization performed better than another). The results suggest that the competencies account for roughly 45% of the variance in the personal effectiveness and both stakeholder variables. However, they only explain 3.5% of the variance in business results.

The columns for each of the performance measures describe the relative impact of each competency relative to the others (out of 100%) on that performance measure.  This shows that Accelerates Business was one of the most important drivers across all 4 performance measures. Advances Human Capability had the strongest impact on Business Results, Simplifies Complexity had a strong effect on personal effectiveness, Mobilizes Information was strongly related to External Stakeholders and Fosters Collaboration had a strong effect on Internal Stakeholders. In addition, all of the competencies were positively related to all of the performance measures, meaning that all are ones that can help HR professionals more effectively perform in their roles. 

We are excited about how this round of the HRCS can help focus HR professionals less on traits they need to develop or roles they need to play, but rather on actions they need to take, actions that will drive both their personal and their organizations’ effectiveness.