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The Evolution of HR Strategy

We look at the development of HR strategy

19Sep

In a recent Harvard Business Review article, Ram Charan, indicated his desire to wave goodbye to the Department of Human Resources. It’s important to point out that when he says he wants to get rid of HR, it’s just the department he sees no use for - the things it does remain we know, nothing is more valuable to the corporation than the talent it can attract.

It’s important that HR professionals go further than the ‘good with people’ mantra that has seemingly stuck with the function since the inception of the role. There are a wide range of skills that now what types of management they benefit from most. These findings make the HR function far more efficient and value-adding for the rest of the organisation.

Much of the disdain Ram Charan holds for the HR function, and the Chief Human Resources Officer role as essential as ever. If you’re in HR there’s a good chance you’ve already created a mental list of the things you do well, whether it’s workforce planning or solving employee disputes, the HR role clearly adds tangible benefits to the organisation. The problem is that there have been a multitude of studies that reflect badly on HR workers. A recent survey of CEOs identified that the HR department was the least agile and that CFOs struggle to build a strategic relationship with them.

The role, like many around it, has developed significantly. Many still think of it as an admin-based role, but HR strategy is a function which can add significant strategic value to the organisation, as go hand-in-hand with the HR role - more than anything it comes down to the individual’s ability to see the organisation as a whole, because it is only when this is achieved that they’ll be able to identify what type of talent is required to drive the business forward.

There also needs to be a move away from qualitative methods for HR strategy as they are less reliable. Analytics are the way forward and agendas have to be set with data at their heart. There are a variety of metrics that can be adopted which will be able to determine who a company should let go, how much they should pay someone and in particular, is his belief that they don’t know how to make business decisions. They know their people, understand how they tick, but can’t really relate this to why an organisation isn’t meeting its targets.

This apparent need for business acumen is not a view shared by everybody. The HR department, especially in large companies, is often viewed as a platform which enables ‘the go-getters’ to work to the best of their ability. Whereas a pure strategist is focussed on gaining a competitive advantage through new avenues,the HR department’s goal is to make sure that the people who spot these gaps are both happy and dedicated to the cause. This train of thought would see the HR function not as tangible force for strategic change, but an important enabler.

If this is HR’s main goal, then analytics have to be used. As mentioned before, qualitative methods are so ambiguous and there is a good chance that employees that you thought were happy are actually bored and looking to move on. Having these insights are important and there is a good chance that without a dedicated department these insights wouldn’t be so attainable, and the company’s strategic endeavours would likely worsen because of this.

Within a start-up, the HR function has to be different - there is no choice but to move away from its old admin-centric roots. When there is a flatter organisational structure, the ability to confront and influence key staff is a vital function. If your office only has 40 people in it, feuds can grow at an alarming rate - within no time at all you can have a very difficult situation on your hands. This is why the HR strategy has to be able to quell volatile situations quickly.

Social Networks have also added to the demands of the HR strategy. Especially in start-ups, there is a merge between personal and business profiles and this can misrepresent an organisation.The HR department must keep tabs on all social media activity to make sure that employees aren’t expressing overtly negative feelings, and if they are, work out why this is the case.

The HR role is changing and evolving. It’s as important as it has ever been, however many are unsure where the department should stand within the organisation. There is certainly something to say for the function becoming more central to strategy and I think this will gradually become pivotal to the role and this has to be embraced by the department if it is to establish a better working relationship with other strands of the organisation. One thing is for sure, the HR department is as important as ever, and I cannot envisage that wavering at all, so it looks like Ram Charan’s ideas will not be coming to fruition.

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