More than just payroll
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 (above) 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.”
First published in English daily The Star, Malaysia, 1 November 2014