Today’s corporate HR function has changed beyond recognition. But most CEOs still think of their HR colleagues as those who help set up candidate interviews, organize paperwork, raise compliance concerns, plan staff picnics, and order birthday cakes. At best, they see the HR function as a business support one. At worst, they see it as a clerical job – boring but necessary. But based on my experience as the leader of several organizations in the last 14 years and an advisor to many, I would say that no other company job has gone through profound transformation than that of an HR Head, especially in these times when most businesses – whether in manufacturing, agriculture, financial services or IT services — have become ‘people businesses’.
Here are five ways how the HR job has changed.
PAPERWORK: Traditionally, filling in the paperwork was all that an HR person did: putting out advertisements, contacting candidates, arranging interviews, collecting performance reviews, and so on. All this is still important work, for it reduces legal and compliance risks. But this should not take more than 25 percent of an HR team’s total time. Why? Thanks to technology, outsourcing, and standardization, much of this work can be systematized, automated, and then processed as routine.
But if your HR people are always busy filling out personnel forms, then you have accepted them as glorified clerks. As such, you are probably paying them too much to do work that is of comparatively little value for your company’s growth. Instead, I suggest that you look at what sort of tasks the HR team is spending its time on, and then gradually steer them to invest a bulk of their time doing high-value or non-routine work for the company.
CULTURE: When one thinks of, say, the Newari culture, as the collection of its architecture, people, heritage, skills, handicrafts, festivals, language, literature, and cuisine as part of its distinct culture.
Likewise, to take that analogy to the organizational world, when people think of your company, what sort of culture can they expect? This is where today’s HR needs spend about 40 percent of their time – assisting the CEO to set up, develop and grow a distinct company culture that is shared, understood, and practiced by all employees. To be sure, this does not happen overnight and can take years. But this is where your company’s competitive advantage lies.
A company with a distinct culture with regard to how things get done, how people are treated, and how people work with one another for results outperforms those where there is no distinct company culture of any kind. Is there, for instance, a culture of helping, teaching, and coaching one another at the company? Is there a culture of working on project teams and delivering results on time? Is there a culture of holding an open and frank conversation, with everyone encouraged to contribute their ideas and thoughts? Is there a culture of treating women and minorities with professional respect? Is there a culture of solving problems together to take the company forward instead of, say, engaging in internal blame games? You get the idea!
Again, the task of assisting the CEO and the senior management to set up and grow a distinctive culture of high performance and high accountability is difficult. Behaviors take time to be changed. And as said earlier, this does not happen overnight. But this is where the HR team can demonstrate its highest value — for the company’s better future, by using culture as an intangible but palpable differentiator that drives higher performance and productivity.
UNDERSTANDING THE BUSINESS AND THE PEOPLE: Most HR professionals say that their focus is on people, and not on products and services their companies sell. As such, they pride themselves on not knowing the core business model of their company. This is dangerous half knowledge.
Going forward, HR needs to understand how the company makes money, how it loses it, how it saves money, and where the market, products, services, and customers are going next for the company to continue to adapt its business to both make money and do good. This means that HR needs to spend time understanding and learning the key drivers of their company’s business.
Once that understanding is there, then, it can find, recruit, hire and groom talents that can help the company grow these drivers of success. The costliest HR mistakes are often about wrong or bad hires, which often is a mismatch between how a company makes money and how a new hire functions. Understanding the company’s business model, and then hiring and developing talents who are likely to excel in executing that business model is a quirt but critical value-addition work for HR.
I would suggest that HR spend 25 percent of its time understanding its business and people from all departments. This can be done by attending meetings, working on internal teams and projects with others, visiting distributors and factory operations, understanding customers and their needs, and developing a sense of the market perception of the company and its products. All this knowledge and intelligence, gathered over time, can be used to further develop and grow people.
EXTERNAL TALENT MARKET: HR needs to understand the external landscape for talents. Where are the best possible people that the company may want in the near future working? What is their likely pay and benefits structure? Who are the thought leaders in the industry, and what are they saying about the industry trends? Who has done interesting and relevant work in the industry, and who can be brought to the company for consultancy or full-time work?
Sitting in the office all day and running internal meetings will not sharpen the HR’s mind to the realities of the talent marketplace that is outside of the company and is changing all the time. To that end, HR needs to develop deeper relations with recruiters, HR agencies, organizers of industry events, university career placement offices, related industry contacts, and the like to gather and collect information about established and upcoming talents who could be useful to the company in the near future. Putting out an ad for jobseekers works mostly for entry-level positions. Recruiting high-level executives requires a broader and deeper understanding of the talent market. This understanding should be a part of HR’s continuing educational process.
A CEO who views the HR team as a value-adding group is likely to work with it and empower it differently from a CEO who views the HR team as a mere head-counting unit. Working with HR for value-addition can be difficult, but that is where one source of hard-to-copy company strength lies in these times of both crisis and rapid change.