Professor Julie Hodges explains why the human resources function needs a rethink in the face of major new challenges.
Anyone who has been on a long car journey with a child has heard the repeated question, “Are we there yet?” At first, the question captures the excitement of the child anticipating a new place, but after a while the questioning becomes exasperating and only adds to the length of the journey.
Similarly, the Human Resources (HR) function seems to have been asking the same question for some time, “Are we there yet?” and appears to have spent years looking for, but never arriving at, their destination. Indeed, there are few HR functions that have not, at some point, embarked upon a journey of transforming the way they are organised and how they deliver their services, including moving from being a low level administrative and maintenance function to operating as a core organisational function and a strategic business partner.
Much of this change has been based on a desire to achieve a greater alignment between business strategy and HR strategy and to drive more cost effective and improved delivery of services.
The need for the repositioning of HR is particularly acute now as organisations attempt to navigate through several complex trends, not least of which is the global pandemic. This reimagining necessitates HR asking itself, “How can we add value through improving organisational effectiveness and individual wellbeing?”
Within this context, my latest book Reshaping HR considers the role of HR in organisational change. Some of the underlying thinking in the book is based on the results of a global study involving 500 HR practitioners and non-HR managers from 30 countries, operating in 20 industries. The findings from the study indicate that HR practitioners are largely operating in the transactional space (that is, internally focused on the operational side of how employees are managed); reactive rather than proactive; supporting change, mainly during its implementation; performing the role of adviser to line managers during change; and still controlling the management of human resources.
Overall, the findings suggest that the role of HR practitioners in organisational transformations is ambiguous in that they advise and support managers but still adopt a policing role. Consequently, the HR function is facing key challenges around its credibility, relevance and added value.
The main proposal in the book is that, since people are of significant importance to the success of change, and since HR knowledge and expertise is vital to the experience and engagement of individuals and teams, internal and external to the organisation, there needs to be clarity about the role of HR in transformations. This is not to say that HR is not already involved in organisational change, but that the role of HR lacks clarity and focus with respect to how transformational change affects the whole of the organisation in an age of accelerating and complex change. We suggest that HR exists to focus on the people aspect of organisational change and that this needs to be done within the context of improving organisational effectiveness and individual wellbeing.
However, this does not imply that HR should be solely responsible, but rather that HR and line managers, in particular, should work together in leading and managing the process of change. To do this effectively, HR will need to connect to the broader context in which the organisation operates, and to external, as well as internal stakeholders. HR will also have to change the conversations they have with stakeholders. They will need to be prepared to challenge views, provide innovative ideas, have a healthier appetite for risk, and be courageous and bold in order to build trust and credibility with stakeholders.
In order to succeed, HR needs to make a critical shift from being transactional to transformational which requires:
Thinking about stakeholders differently: Rather than considering stakeholders from an internal perspective only, they should also be considered from an external perspective. Applying a stakeholder lens will help to drive a critical shift in HR thinking and this shift is the foundation upon which other transformational priorities can be built
Developing new capabilities: HR will need to adopt a new mindset and embrace new skills and behaviours, which will allow the organisation to thrive in the digital age
Increasing the efficiency through which HR transactional activities occur using automation: HR will have to widely deploy advanced technology in order to promote productivity and value and to simplify the employee experience. In addition, HR will have to capture data that will facilitate the development of more data-driven decision-making
Expanding the expectations and stature of HR: HR must elevate its focus by driving tangible and measurable value across the organisation.
Movement in this direction is not without its issues and it will require HR to address some key challenges, one of which is what it is called. What was clear from the research is that the term ‘Human Resources’ is no longer fit for purpose, and some organisations have rebranded the function as ‘Employee Experience’ or ‘Employee Engagement and Performance’.
Likewise, some HR leaders have changed their titles from HR Director to Chief HR Officer (CHRO), People Director, or even People and Culture Director. This type of rebranding has been happening at major inflection points in the history of the profession, such as when the name of the function was changed from ‘Personnel’ to ‘Human Resources’. Although such a rebrand can serve as a refresh, it may also be ineffectual if there are no fundamental changes made to the purpose, role, and outcomes. Merely changing its name and/or job titles will not transform HR.
The path forward for HR requires some fundamental rethinking about what HR does and how it is built to deliver its purpose. In reshaping the HR model, a whole systems approach will need to be adopted to identify changes to be made to the structure, governance, and analytics, in order to create a coherent self-sustaining and integrated HR. What emerges then will not be a ‘cut and paste’ of someone else’s best practice, nor an implementation of a standard model, but instead a model that is fit for the future.
Professor Hodges’ new book, Reshaping HR, is available from the publisher routledge.com.