Employees as customers of HR

What is the proper – or most effective – relationship between the so-called ‘Human Resources’ department and the employees of an organisation?

(Okay, I admit it, I’ve allowed myself to get somewhat distracted from finishing the promised assessment of use of Business Model Canvas beyond startups, or the even longer-delayed NOTES series, but I promise I’ll get back to them both Real Soon Now. This is just a quick practice-note about something that came up in the current client-work that’s been the source of that distraction!)

This week I’ve been running an EA-related workshop for the HR management of a mid-sized multinational conglomerate – a pleasant change from the usual IT-only enterprise-architecture! Many of their concerns are much the same as for the IT-folks: they worry about ‘HR-business alignment’, they want HR to been seen as strategic and deserving of a place at the executive table, they want to be seen as a partner to ‘the business’, and so on. And yet just as with IT, most of what they do seems stuck in transactions, transactions and more transactions. It’s different from IT, yet also much the same: that same old always-subtly-different same-and-different, all over again.

Of the stream of ideas and tactics that have come up in these sessions, perhaps the most interesting is this: employees are the customers of HR.

Think of that relationship exactly the same as in any other business-model: in effect, HR is ‘selling’ employment in the company to potential and current employees. If HR is a service-provider for the business, employees are its active customers, in a straightforward multi-sided business-model. And if we view employees as customers of HR, all of the usual Business Model Canvas type of mapping fits exactly. The shocking part, though, is that if the business treated its ‘outside’ customers in the way that HR treats the employees, the business probably wouldn’t have a business at all…

To make sense of this – and also to help HR to find its desired role as a partner in business-strategy – then probably our best approach is to map HR and its processes onto a frame of inside-in, inside-out, outside-in and outside-out:

The transaction-stuff is ‘inside-in‘ – making sure that the HR processes are efficient and reliable and so on, solely from the perspective of the systems themselves. (As with most IT-architecture work, it doesn’t take long before we realise that even from that perspective the current systems can be a long way from optimal, with all manner of legacy kludges and local-optimisations and the like that will need cleaning up on an ongoing basis.)

Much of HR’s relationship with everyone else – perhaps especially in that long-established staple of the HR world, the ‘job-description’ – is classic ‘inside-out‘: the world viewed only from our own perspective. We have a job that needs doing, here’s the description of the the requirements for that task, who can we find to fill that gap?

It’s much the same as in classic IT-based process-design: IT-folks would ask “what” rather than “who”, but that’s almost the only difference.

And it’s much the same as in classic ‘push-marketing’: here’s the ‘value-proposition‘, here are the features, here’s the price, come and get it. It’s sort-of the other way round to sales – buying services, rather than selling them – but that’s almost the only difference.

The catch is that, on its own, ‘inside-out’ doesn’t work well. For example, in one part of the business, there’s a huge turnover of employees, much like customer-churn in the telco business: the ‘value’ part of the employment value-proposition, it seems, can wear away very fast indeed. Which can lead to huge costs of acquisition, retention and de-acquisition, even in financial terms, let alone human ones.

What’s missing is those other two perspectives – ‘outside-in’, and ‘outside-out’.

In this context, ‘outside-in‘ means looking at things from the employee’s perspective. To put it bluntly, why would anyone want to work for you, or with you? If the only reason on offer is money, don’t expect good results: as Dan Pink and others have warned, a focus on money alone tends to lead to a ‘race to the bottom’. Instead, think of it exactly the same as for any other customerjourney: what are the touch-points, the areas of friction, of satisfaction and dissatisfaction? Viewing employee as customer in this sense can often be a real eye-opener, leading to a literally revolutionary shift in how the organisation engages with (emphasis: ‘with‘) its employees – as revolutionary as ‘pull-marketing‘ is in the organisation’s relationships with its customers.

And to make that ‘pull’ possible – to make it work – we also need an ‘outside-out‘ perspective: viewing the shared-enterprise in its own terms, broader than the scope of our own organisation or any other. ‘Outside-out’ is about shared-purpose, the ‘vision’ or unifying-theme and concomitant values that link everyone together in that shared-enterprise, and that provide the deeper reason why people want to engage with each other in that context.

In employment, the classic example is the old story of a janitor sweeping the floors in a NASA office in the late 1960s: when asked what he was doing, he answered “I’m helping to put a man on the Moon”. Given a purpose that means something to them, most people will want to work, in almost whatever way they can; but without that purpose, they won’t – sometimes even regardless of how much we pay them. Just as with any customer, an employee needs a reason to engage with the organisation’s own purpose: an ‘outside-out’ view of the shared-enterprise will help us to identify what that purpose is.

So perhaps try this out in your own EA work: reframe ’employee’ as ‘customer of HR’, and see what difference that makes in your view of your systems, your processes, your overall architectures. Interesting, yes?

Over to you, anyway: your comments and experiences on this would be most welcome!

6 Comments on “Employees as customers of HR

  1. Like IT, I actually see 3 sets of customers for HR: the employees (end users for IT), the business units, and the enterprise as a whole. Similarly, I would expect a high probability for failure if it serves one or more of those constituencies to the exclusion of others.

    • Strong agree to all of that, Gene.

      “I actually see 3 sets of customers for HR” – yes, in that sense it’s a straightforward multi-way business-model with different types of Offers to each of the the constituencies, sort-of comparable with the newspaper or online-search business-model. Hence, yes, “high probability of failure if it serves one or more of those constituencies to the exclusion of others” – the business-model depends on the integration of the whole, not merely of any one part.

  2. Astute in your observations as ever Tom.

    I know that you can subdivide until the cows come home, but I believe a valuable additional distinction on the employee as customer, is the difference between prospective and current employee.
    From what I have seen the best “employee as customer” experience is one where pre-sales care and effort is only matched by customer service following a “purchase” (i.e. a commitment of employment by an individual).
    If HR departments want to be seen as a strategic partner to the rest of the organisation, focusing as much (if not more) effort on retention versus acquisition would reap immense value, in my opinion.
    On the rare occasions I have seen this, attrition rates of employees have reduced even during times of economic stress.
    Plus it feels awesome to be valued and appreciated too.

  3. Hi Tom, good to read your material (have been down in the trenches for the last three months). However, I am just starting work for a client on establishing their foundations for the HR Transformation Program. They conducted a strategic review last year. The review developed a number of key strategies – one was to streamline basic transactions, releasing resources (both within HR and within the enterprise) to more value adding tasks and services.

    Another is the establishment of HR Business Partners – effectively, establishing a strategic, account management function, with one partner per business division.

    Would be interesting to exchange further notes on strategies and approach. I am about to develop an HR business operating model so that the enterprise will have clear visibility and understanding of who does what when it comes to any HR related activity.

    • Hi Peter – thanks for the comments!

      Would be very happy to exchange notes on this – would really help me here, and I hope would help you too.

      The main theme I’m exploring at the moment is to apply standard Customer Journey Mapping to employees’ relationships with HR – much as per Chris Potts’ dictum that “customers do not appear in our processes, we appear in their experiences”. Kinda interesting (to say the least), but definitely kinda scary for the HR guys! 🙂

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