While we in Pakistan are still in the process of renaming our Personnel Departments as “Human Resources”, the rest of the developed markets are asking: “Is HR a career in crisis?” The fact is, the role of HR is evolving constantly and we need to move away from the traditionally administrative function it has been to one that is dynamic and able to contribute positively to the bottom line.
Our situation is different to that of the developed markets because HR here is mainly practised by multinational companies. A few enlightened Pakistani firms also have highly developed HR functions and these, too, tend to be based on concepts borrowed from the West or Japan. However, the criticisms about HR seem to be the same around the world and this is at the heart of the issue.
A recent web-based discussion in The Financial Times provided a thought-provoking insight into the criticisms surrounding the role of HR. Contributors felt that HR professionals were a bunch of deadbeat bureaucrats stuck in the old ways of doing things. They felt that credibility was seriously lacking and that the same old solutions were being offered in new packaging. It was also noted that HR was a function that was most distant from the people and that it was high time they got out of the “tea and toilets” business.
Closer to home, we have another set of perceptions to deal with. HR is seen as a cost centre and not as a contributor. Being a “staff function” it does not offer much scope for fast-trackers (those who want power, money and advancement now) and has therefore been unable to attract top talent. The role models have been less than inspiring and the departments act as gatekeepers and not enablers – they tell you what you can and cannot do. The litany goes on: HR works at the whims of senior management and does not have the guts to stand up for what is right; they do not understand the business and don’t do anything for the benefit of the staff. So what is HR to do?
Added to the mixture are the changing needs of the marketplace. The old contract of lifetime employment is over. Companies now seek to increase the marketability of their staff, both within and outside the firm. Organisations need staff who are flexible and mobile and possess multitasking capabilities. This mobility means workers are not looking for the traditional long-term benefits but want cash upfront. Thus, compensation packages need to be structured accordingly. Attracting and retaining top talent has always been a challenge and will be more so in the new economy. The Internet has put a premium on response times for both internal and external customers. How will this impact HR?
The message for HR is clear – adapt, add value and make an impact on the bottom line. To do this, it will need to understand the expectations of the department from the customers’ point of view and clarify its own role perception. Is it a strategic business partner or just an admin outfit?
The traditional functions of HR – Payroll, Admin, Training & Development, Recruitment, etc., can all be outsourced eventually. Several companies have already done so. What then remains is an advisory role (or, to use the new buzzword, “solution architect”). Gatekeepers will not be tolerated; instead, companies will demand enablers. The HR Advisor will have to become a business partner in the real sense of the term, providing solutions creatively and cost effectively. To do this, the Advisor will have to take time to understand the business in all its various complexities, showing how to get things done. Technology will play a big part in the future of HR as more and more processes can be made available online.
Another thing HR can do to improve its image and functioning is to measure its performance against other departments’ benchmarks. Take Customer Services for example: are the customers of HR delighted with its performance or is it a department one dreads doing business with? It is these “moments of truth” that take HR out of its cocoon and into the realm of a credible player. Measured against the Operations Department, how accurately does HR manage its processes and responses? The Marketing Department is another good measure: what new, improved service is HR providing? How is it selling the benefits versus the features of its function? How does it rate on the mind-share/heart-share scale? How does it identify customer needs and then measure how well it is doing in meeting those needs? How is it communicating its successes? Last but not least, HR will have to demonstrate its contribution to the bottom line by quantifying the outcome of its activities.
No one measure will be singly sufficient to transform the current adverse perceptions of HR. More importantly, no one else is going to take HR to the level of acceptability it seeks – it will just have to do so itself. Let me end with a quote from one of the participants in The Financial Times debate: “The future of HR is fantastic because it is going to be important in the knowledge economy. It will provide a route to the boardroom for talented HR people – not welfarists, administrators, personnel practitioners and other touchy-feely types – but by HR professionals who can demonstrably point to a financial improvement in their organisations through people-systems.”
