This article is divided into 2 segments. One written by Sarah Tan, a novice in the HR space and another by Suet-Ling Foong, who is a seasoned HR professional. They were both asked to write on the Human Resource (HR) function and its importance as a strategic partner to the business. Read on to learn more:
I have to be honest – I didn’t possess that great of an understanding about the functions of the human resources (HR) management, nor did I understand why they needed to be strategic partners, prior to being asked by my editor to write this piece. Being more on the inexperienced side, I had to resort to a “Google search” research. However, even after my attempt at educating myself, I still can’t say for sure that I understand everything inside and out. Writing this was a small hurdle; what should I type out? Should I just regurgitate a Forbes article?
Eventually, I came to realise that maybe not everyone knows of this topic as broadly as we should, too. Whilst there are many intelligent and informed people who read our portal (and the weekly pullout we produce), there may also be those (who are also intelligent and informed!) who aren’t completely sure of what the HR function is nor what HR people do.
So, as we dive into this, a quick answer to a quick question: what is a strategic partnership, in the first place? Especially when it comes to being a strategic business partner. According to BusinessDictionary.com, a strategic partner is a party with which a long-term agreement is reached for sharing of physical and/or intellectual resources in achievement of defined common objective.
HR, as explained by Suet Ling below, is currently moving from a place in which they are not valued as much as they should be to a place in which they are considered key and vital components of a company. According to Leaderonomics Founder and Group CEO, Roshan Thiran, he believes that the HR function as it is today is approaching a state where it needs to pivot. He believes that just as marketing has pivoted from a creative function into a data-driven function, HR needs to move from a soft, people-sensitive function to an employee intelligence function. HR needs to be the bastion of employee intelligence - they need to know everything about each of their employees and be able to leverage them fully, engage them wholeheartedly and optimise their strenghts in driving the business forward. But let us dive deep into the world of HR as it is today.
Why we need HR
According to an article by Aon Hewitt, efficient HR service delivery is critical due to various factors such as increasing cost pressures, rising customer expectations, and others. In order to combat these factors, HR has to come in to save the day by competency and talent management, increasing the productivity of the labour force, along with their many other super powers. Here are a couple of the fuels to these super powers, as extracted from the article:
Taking a more cost-effective way by aligning the business’ needs and HR’s overall operation philosophy along with the definition of which customers should be served excellently.
- Optimising People Processes and Initiatives
Inefficient processes are one of the top mistakes that HR professionals make. Sometimes a lean system is needed to streamline processes by identifying causes and dealing with them. Strategic HR leaders need to understand the company’s vision and mission, and think through the type of skills, knowledge and personality required in the people helping to drive the company forward. As with other leaders, the HR leader needs to also be able to communicate well, making strategic HR understandable to the HR team, and implementable.
In conclusion, I believe HR is an important function. These are two very critical needs. I also agree that to ensure these 2 areas are carried out well and efficiently, HR has to deploy technology and have to become an employee intelligence agent. It will be exciting to see how this field grows over the next few years as HR starts to pivot and transform itself as Thiran predicts it will.
Five years ago, I decided to kick-start my career in human resources (HR) management for the most unusual of reasons – I could dress in corporate wear daily and network with people from different departments. Of course, through years of working in HR, I realised it is beyond just that. As a HR generalist, I have managed the recruitment of interns and staff, employee engagement, as well as benefits and compensation, just to name a few. Back then I always used the phrase, “HR is a unit which represents the employer and the employees” to describe what we do on a daily basis.
It is a no brainer that some common misconceptions about HR have stemmed from that statement alone, as it didn’t depict the real picture of what goes on behind the scenes. If we talk about figures, HR is often labeled as a non-revenue generating department. The value which HR brings to the company can’t be measured in the most tangible manner either.
The Evolution of HR
Although this perception has not changed much, the role of HR has definitely evolved over the decades. Most transactional and administrative-inclined activities such as payroll, attendance tracking, compensation and benefits have been automated or are being streamlined with the existence of centres of excellence, i.e HR shared services functions to allow tasks to be completed with higher efficiency within a shorter timeframe. With these tasks out of the way, HR has a bigger capacity to take on more strategic roles which will benefit the business in the long run.
Figure 1 is a strategic HR management model which exemplifies the multiple facets to be managed by HR instead of just working in a silo.
It starts right from the corporate strategy and cascades to the business unit strategy with the influence of both internal and external environments. It is evident that HR’s roles and responsibilities are both intricate and demanding. According to an article in the Harvard Business Review “The New Path to C-Suite” by Boris Groysberg and team, research has been conducted to identify some of the key criteria in the C-suite level. There appeared to be some new criteria that are linked to hiring a chief human resources officer (CHRO):
• Commercial acumen.
• Understanding of cultural differences and shifting demographics.
• Change management skills; facility with cultural change initiatives.
• The credibility needed to act as an internal adviser to the CEO and the board.
• Ability to work with the board to manage succession.
• Tech savvy.
• Expertise in building compensation and performance into governance structures.
• Skill at marketing the CHRO position to the rest of the organisation.
If we work backwards, these criteria should be prevalent qualities in all HR staff starting from entry level itself. The myth of people skills being the only skill you need to be part of the HR team should be debunked as it is no longer valid. Furthermore, here are some predictions on the direction that HR is heading for the next decade as illustrated in the article The HR Department of 2020: 6 Bold Predictions by Erin Ostherhaus. Some of the predictions include:
• HR will increasingly utilise analytics and big data to augment its value to the firm.
• Managing a remote workforce will be the new norm.
• HR will need to become more like marketing.
• Strategic thinking will become HR’s new core competence.
HR as a value adder entity
So, how exactly does HR add value to current organisations that link to its future direction? Here are some of my personal observations.
1. HR practitioners as business partners
If HR personnel are not invited during business meetings, something is not right. Collaboration between HR and various departments in an organisation has increased to ensure that more informed decisions can be made by both parties. Some multinational companies have a system in place whereby HR business partners are assigned to a certain staff population in the organisation. This is to intensify the connection between HR with the business operations. It also helps translate HR data into business terms. Business units are also able to leverage on HR’s data and support to better manage employees’ performance and morale in a consistent manner.
Given the emerging trends in HR, it is sensible for HR to be more of a business partner than just a support unit with limited interactions with business units. To involve HR in making business-related decisions is akin to buying insurance before traveling. You have more ground covered and have the upper hand in managing any consequences related to human resources should they arise as a result of business decisions made.
2. HR as key partners in managing change
With a rapid shift in business models, organisation structures change in a greater scale compared to before. During times of restructuring, HR has a vital role to play to ensure that staff who are affected are provided a platform to raise their concerns. It is not solely related to compensations awarded but focuses on partnering with leaders within the affected departments. Interventions such as employer–employee dialogue, counseling, and new job placements are part of HR’s scope to safeguard employees’ welfare and manage the transition to be as smooth as possible. These are not easy duties and comprehensive planning from HR’s end is crucial to prevent attrition rates from skyrocketing during times like these.
3. HR as catalyst for company growth
The Malaysian Institute of Human Resource Management, for example, has been organising the Malaysia HR Awards (since 1999) to provide recognition to the HR community for applying HR strategies to spur business KPIs (key performance indicators). When we look at the awards presented to employers of choice, companies generally emphasise that their HR plays a major role in their workers’ learning and development, values-based method of recruitment and talent management – as compared to skill matching and incentives given to retain employees. These feats cannot be achieved without HR standing in as the agent to strategise, cultivate and promote desirable work environments, which in turn translates to strong attraction for top talents to pursue their careers.
HR is indeed shifting to a more strategic quadrant and moving away from stereotypical views of “just another maintenance unit”. So if someone were to ask me again, what exactly does HR do? I would say…
“HR is like a mechanic, keeping the engines of an organisation well-oiled to produce optimal performance – the engines being the people’s asset, policy and processes, and the company’s culture.”
Watch engaging video discussion between Professor David Ulrich, Roshan Thiran and R.A Thiagarajah on the evolution of the HR space in Malaysia