The role of the human resources function is changing. Much of the transformation has been driven by the desire to improve the way people are managed, embrace thought leadership and increase efficiencies within departments. But changes are also being made in response to the emergence of a globalised and more flexible workforces. Organisations are being forced to consider new ways of working in the digital age, as the role of technology renders a number of traditional people management norms redundant.
According to Big Four consultancy KPMG, HR is struggling with this challenge. The company notes that the global workforce has become increasingly integrated across borders, while becoming more virtual and flexible. These developments have made the retention of key talent and building workforces in new markets top priorities of HR departments, it said. But just a quarter of human resources departments surveyed said they excel at sourcing and retaining key talent worldwide, supporting a virtual and flexible workforce, and contributing to the globalisation of the business. So the implication is that opportunities are being missed within many firms.
KPMG suggests that finding ways to engage better with workers can help address the challenges being experienced by HR today. The firm highlights the importance of improved employee engagement, fostered by creative solutions. Indeed, HR departments can achieve better success in managing a global workforce if they are prepared to be creative and innovative. Workers are looking for new HR policies and approaches that have global application but local relevance, KPMG claims.
Embracing technology drives HR innovation
When it comes to innovation, technology clearly has a major role to play. HR departments have a range of new solutions at their disposal which can offer the insight needed to support people management and decision making. KPMG says IT has already transformed HR, and data analytics will foster even more profound change in the months and years to come. This is the most commonly area cited for IT investment in the next three years, as firms look to the statistics to help identify future talent gaps.
In addition, 69 per cent of companies surveyed by the firm said their HR function now provides web-based and/or mobile HR platforms, which enables the department to work more effectively. A willingness to embrace technological developments allows HR to do administrative work more efficiently, and provide employees with flexible, tailored training. It also helps them create a positive culture for communication, which helps improve the standing of HR in all areas.
Key steps for developing the role of HR
"Technological change and current workforce challenges should be catalysts for HR to transform itself into a strategic player," KPMG says. But in order to reshape itself in this landscape of new challenges, emerging technologies, and heightened financial constraints, HR needs to take a number of steps. According to the Big Four firm, human resources departments need to develop greater confidence, leadership and credibility, so that their leaders can earn a place in strategic conversations at the highest levels.
HR also needs to develop closer partnerships across their organisations, especially with line managers who will use technology-driven HR services to play a greater role in employee management. KPMG also urges HR to "recast its strategy", beginning from a whole-business perspective and aligned with the needs of the entire company, not just the HR function. This requires departmental leaders to be bold and brave, but the rewards are clearly evident. If HR leaders are willing to innovate and take advantage of digital solutions, they can establish an important voice in the boardroom and make a clear contribution to their organisations' growth strategies.
Business savvy sees HR add value
At present, the reality is that HR is still viewed as a non-essential department within some organisations. Occasionally, business leaders believe that many of the functions of the HR departments can be taken on by other areas, and where this is the case, the onus is on HR to demonstrate its value. One of the ways this can be achieved is by taking a broader view, looking at the organisation as a whole rather than inwardly focusing on traditional people management. This concept fits in with the idea that the shape of the workforce is changing, driven by the forces of globalisation.
Vanessa Robinson, head of HR practice and development at the Chartered Institute of Personnel and Development, comments that human resources professionals need to show their business savvy. She claims they are in a "unique position" to be able to spot the hard and soft factors in organisations that represent either risks, or opportunities, for driving sustainable performance. And given the opportunity, the majority of HR professionals "continually and instinctively step up to the challenge". Doing so, and delivering insight which extends beyond their traditional area of jurisdiction, can potentially help demonstrate the value of HR to organisations.
"Business savvy HR practitioners understand where value is created and destroyed within their organisations and are able to identify people-related improvement points which drive value and enhance organisational performance," Ms Robinson notes. "The most effective HR professionals have the courage to ask questions and look for explanations even when the knowledge required seems masked in technical or professional jargon." She says it is up to individuals to ensure this behaviour is constantly practiced and reflected upon, enabling HR to "become embedded at a strategic level".
Ms Robinson claims that although cost management and belt-tightening are still the primary focus for most organisations in the current economic climate, HR needs to look beyond these immediate priorities. The function needs to review its role, considering what it is doing well at present, but also how it can improve in the future to truly add business value. "This includes helping the business to innovate and work more smartly," Ms Robinson notes. If HR can visibly demonstrate its impact on the business or organisation, using technology to deliver relevant measurements, itsposition will surely be strengthened.
Posted by Jon Aspinell on 3rd December 2012
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