HR has never been more visible in organisations, so is now the time for HRDs to press home this advantage and transition to be more strategic?
The post-pandemic world is undoubtedly characterised as “VUCA”, with volatility, uncertainty, complexity and ambiguity. It’s a reality that all departments of a business need to react, but if there’s one function at the epicentre of change more than most, it’s HR.
Changing enterprise priorities, hybrid working, employee resilience and wellbeing, and latterly the “great resignation”, coupled with new business-critical needs, have all reinforced the unambiguous conclusion of Hackett Group, in its HR Issues 2022 study, that Covid-19 was “HR’s breakthrough moment”.
Long-held claims that HR was merely administrative and not strategic enough were cast aside. As Dr Christian Schmeichel, SAP’s chief future of work officer, has remarked, now HR has a “once-in-a-generation opportunity to shape the future of work”.
Certainly it is acknowledged HR’s visibility has never been better. Dolores Castelli, HRD of Southern Latin America at Pernod Ricard, says: “The pandemic has elevated HR; most of our board are focusing on core HR issues. HR is even more strategic now and meets with the executive board weekly rather than monthly.”
Microsoft’s vice president of HR, Stijn Nauwelaerts, adds: “The pandemic has been an opportunity to reset the agenda. HR used to be about running the people agenda, but now the people agenda is the business agenda. No one in our organisation is talking about HR needing to fight to get its agenda to the boardroom; it’s already listening.”
But are these two HRDs the lucky ones and is HR at risk of losing its new-found heightened importance if it doesn’t press home its significance within the business?
For what’s also clear from Ius Laboris’s research is that globally a mixed picture emerges. Almost half (49%) of HRDs and legal experts polled find nothing has changed or HR’s role has not changed significantly, with the consensus being HR remains focused on the same things as pre-pandemic.
Even among the C-suite HR, more than a quarter (26%) regard their roles as “purely” administrative or operational in nature, while 29% of HRDs say their role is “mainly" administrative.
“In many ways HR emerged as kind of corporate heroes from Covid; they massively stepped up, pivoting businesses to working remotely,” says Ius Laboris Hong Kong’s Kathryn Weaver. “But there can be an attitudinal problem towards HR that they are still a bit ‘adminy’.”
Juan Viñales, partner and co-leader of the international labour and employment practice at Ius Laboris Argentina, points out an irony. “New post-pandemic priorities actually consume more of HR’s time, creating new administrative rather than transformation requirements. They dilute HR’s ability to deal with the business strategically,” he says.
HR emerged as the kind of corporate heroes from Covid Kathryn Weaver, Ius Laboris Hong Kong
So what should HR’s priorities be to enable them to transition permanently into the change-makers they wish to be? Clues can be found within the Ius Laboris research.
The capabilities HR felt it needed to develop were better people analytics, which polled top among 44% of respondents, people management skills (42%), and process and systems streaming (36%).
“Broadly, HR needs to be much better at thinking ahead, telling the business what needs to be done,” argues Sarah Draper, head of people and culture, Rider Levett Bucknall.
There is no clear consensus on HR's role today between HR and Legal Staff
Percentages of job titles that feel HR is mainly strategic
This involves having a “solid idea about what’s happening in the business and getting away from always being on the flywheel”, says Nauwelaerts. It’s certainly the case that when HR is included in the boardroom, HRDs feel much better prepared to shape conversations about whatever the next crisis might be – 76% of the included group feel this way, while when excluded confidence plummets as only 45% of those excluded feel capable.
But experts also argue HRDs only have to look around them to know where the function is heading. ”Environmental, social and governance issues, diversity, equity and inclusion are all shaping new conversations in business transformation,” says Burkard Göpfert, partner at Ius Laboris Germany.
“HR will be the gatekeepers around how people feel in organisations, including developing new moral guidelines,” he says. “Against this backdrop, HRDs will need to give their knowledge more readily, rather than being protective of it and it coming across as voodoo.”
Positioning themselves at the heart of the business is a strategy few disagree with. “When you’re in the business you can be ahead of problems,” says Draper, and things become more about coming up with solutions.
“HR works so hard to have the business trust us with all the functional side of things, but it’s then about using this as a platform to demonstrate the strategic side of things,” she says. "If other areas of the business only interact with HR in a transactional way, that’s how they’ll be perceived. HR needs more exposure.”
HR needs to be at the C-Suite table to handle future crises
There’s little doubt that in our changing world, all those involved in the HR function are working harder than ever at the coal-face. The challenge, as our research highlights, is to make the most of an emerging window for change.
The HR profession needs to show better evidence of its transformative, rather than administrative, impact and accept it needs to upskill itself and be comfortable talking the language of the boardroom.
“HR wants to be transformative, but maybe the function itself needs to go through the same transformation process as others in the business first,” Göpfert points out.
The most difficult thing for organisations to understand is the true value of HR to a company. They can’t always see the direct link between the HR strategy and profitability Orly Gerbi, Ius Laboris Israel
Those who are in the thick of it certainly see the change their profession has had to embrace in the last few years. The task for the immediate future is for HR to really take ownership of the demonstrable change they are helping to push through. The more they interact with other disciplines in a strategic way, the more others will perceive them strategically.
As Draper says: “Transformation is about value perception, what HR can bring to the top table. What the business then needs to do is trust us with all the functional things, so we have a platform to demonstrate the next key things: future skills, technology, hiring for potential, representing the communities we work in and adding value.”
She concludes: “HR should never be about box-ticking, but adding value and exposing oneself to new concepts; HR can, and will, transform.”