ELEVATING HR POSITIONING A Critical Capability and Opportunity

One of the major assertions of schools of thought in modern management is that the most important resource in an organization is the human resources or intellectual capital that enables the institution to grow to a position of pre-eminence. To achieve this, employees have to transcend their role of ‘working for’ the organization into a deep, emotionally connected ‘working with’ it, in a symbiotic partnership to achieve individual self-actualization and a collective performance far beyond the realms of the ordinary. This is expected of employees at a time when job security has reached its nadir. Vision and mission will not become a business reality unless employees within the company are involved and their integration with the company’s goals is valued. The divorce between ownership and functional autonomy is a must for moving ahead.

Madan Lal Pradhan

The world of work has changed a great deal over the last few decades. But there is one truth that continues to stand the test of time; people are a firm’s greatest asset. Human capital, or the knowledge and collective intelligence inherent in a company’s workforce, can be a company’s strongest competitive advantage, and also its greatest source of risk. HR is in arguably the best position to see overall processes and offer a systemic viewpoint, ensuring coordination, communication, and collaboration across units, functions, business groups, and silos. HR can facilitate dialogues that help ensure the right amounts of reinvention, re-proportioning, and re-prioritizing of business goals to adapt to shifting customer demands and markets. It is incumbent upon CEOs and Human Resource Units, to work together to manage their firm’s people assets, and properly evaluate and utilize these alchemic human resources.

Few CEOs have formal experience working in the “people” side of the business. They must rely on their HR teams to keep a pulse on critical talent both inside and outside their organizations. Human resources professionals have valuable insight to impart on important people topics like recruiting, flexible work arrangements, job designs, and performance management. Historically, top executives have relied on HR professionals the most when the economy is on the upswing. As the economy continues to recover from the financial crisis, HR is seen to increasingly been called upon for meaningful support. At other times, HR’s role has been very routine –coordinative and administrative in execution.

Human Resource Management which has emerged as an extension over the traditional Personnel Management, is still limited in scope and orientation in Nepalese organizations and still has been using an inverted approach. Post-90s, the MNCs and development agencies helped to promote HR systems in Nepal. This rendered inspiring optimism about the progressive future of the function but development in this realm has been very sluggish and upsetting in our organizations. The human resource management practices are limited primarily to implementing the basic daily administrative ‘routine’ functions and in the process have been successful in gaining the reputation of sheer administrative expert only. The intensely competitive nature of business today with most of the problems being human-related, there was and will always have a big scope for human resource managers who will be called upon for value-added contributions in strategic and measurable terms.

The realization on the part of the organizations that HRM is proactive in its relationship with people and seeks to enhance organizational performance in its relationship with them is still not sincerely actualized by Nepali organizations. They seem to have given credence to the fact that HR professionals do help in the quantitative and calculative aspects of managing the human resource systematically but have failed to recognize that HR can and should be looked at as a strategic business engagement partner- involved in the business of wealth creation-a critical capability HR can influence. HR units have struggled tough to create a perception of serving as a value-added partner for business solutions-getting the human resource unit ‘at the table’ where they are able to help leaders think through business issues. The Human Resources personnel has often been seen as an agent of implementation, rather than a decision-making and change partner. While many believe that it is up to HR units to prove their worth and the value of their function to the business. This is silly. It is the management’s responsibility to elevate and redefine the role of the HRM, and that HROs should perform.

It is high time our organizations understand that human resources are in a prime position to show the relationship between employee engagement and important business outcomes like turnover, sales, and profits. By challenging longheld misconceptions about HR as a function, and by quantifying the impact people processes have on business, a new breed of HR leaders can prove themselves an invaluable asset to any team.

HR has not had to change in recent decades nearly as much as having the line operations it supports. But now the pressure is on, and it is coming from the operating level, which makes it much harder to cling to old talent practices. This necessitates revamping of the existing outdated HRM practices and establish a renewed reputation in the organizations with greater thrust and focus on development dimensions rather than the ‘routine’ functions – on a strategic leveling ground. Today’s human Resource Managers face three basic strategic challenges. One is the need to support corporate productivity and performance improvement efforts. Second employees play an expanded role in the employer’s performance improvement efforts. The third challenge (stemming from the first two) is that employers see that their human resource units must be more involved in designing –not just executing –the company’s strategic plan.

Despite many HR departments in Nepali organizations making noticeable strides in instituting progressive HR practices in the organizations, one of the reasons that have reduced the HR professionals’ credibility as masters of personnel management and change leaders is that human resources professionals who offer anecdotal evidence rather than solid business metrics to back their vision have failed to quantify the value of people processes and in using people metrics to support their cases for HR programs.

The Nepali HR landscape has changed, albeit slowly, in recent years. In many organizations, the human resource function has gained an exclusive departmental function status as against it being clubbed with other units such as accounts and general administration. This is definitely a big plus. The changes in HR have been a long time coming. Pre-90s, the idea of initiating human resource practices was primarily personnel administration in scope and orientation. The bureaucracy was the point: Organizations wanted their talent practices to be rules-based and internally consistent so that they could reliably meet long-term plans. That made sense. Every other aspect of companies, from core businesses to administrative functions, took the long view in their goal setting, budgeting, and operations. HR reflected and supported what they were doing.

Post-90s, as the business became less predictable and companies-MNCs and development organizations needed to acquire new skills fast, that traditional approach began to bend—but it didn’t quite break. Lateral hiring from the outside—to get more flexibility—replaced a good deal of the internal development and promotions. “Broadband” compensation gave managers greater latitude to reward people for growth and achievement within roles. For the most part, though, the old model persisted. Like other functions, HR was still built around the long term. Workforce and succession planning carried on, even though changes in the economy and in the business often rendered those plans irrelevant. Annual appraisals continued, despite strong dissatisfaction with them. As not much has changed in the past years, one will have to be very realistic and pragmatic about the needs of the future. Liberalization, deregulation, digitization, and enhanced customer sophistication have led to disintermediation- a big challenge for businesses. Adding to it is the Covid-19 pandemic.

Undoubtedly, the pandemic will have new challenges and changes for HR. Therefore, it is essential to redefine our HR strategy to transition businesses to the new future of work predictions. HR has been dealing with the seismic shifts because of the pandemic, and we are now at a crossroads with an opportunity for HR to create important foundations as we move forward. Business models need to continue to be rebuilt and revised and HR has a unique role to play in these discussions. How HR can capitalize and thrive with the new weight on its shoulders will be an interesting watch.

Overhauling performance management practices to jumpstart motivation and engagement; using agile processes to transform how one hires, develops, and manages people; instituting programs that increase innovation and competitiveness as well as inclusion; using people analytics to bring unprecedented insight to hiring and talent management; preparing the company for the double waves of artificial intelligence and an older workforce, closing the gap between HR and strategy; reskilling of the HR function and developing more expertise in IT support and deeper knowledge about teams and hands-on supervision will pave the way for a significant move.

Human resources units must reposition themselves as a strategic business partner and continue to take greater steps to keep studying the impact of human capital initiatives, enhancing its credibility and delivery through continuous reskilling and up skilling, and staffing the HR departments to attract and cultivate analytical HR minds sustainably contributing to the organization in strategic and measurable terms. Is anyone listening?

Pradhan is a Human Resource Specialist, Management Consultant and an Educator.

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