1. The Role and Future of HR
Today’s challenge & tomorrow’s vision
By Prof Sattar Bawany
While the term ‘strategic human resource management’
(SHRM) may sound like an oxymoron to some, many companies
recognise that effective HRM is key to their competitiveness.
It is widely acknowledged and accepted in business that the
sources of sustained competitive advantage lie not only in access
to finance or capital, but within the organisation, in people
and processes capable of delivering business strategies such as
customer satisfaction or rapid innovation (Bawany, 2004).
HR professionals who have the business acumen to contribute
to business strategy at the highest organizational levels are leading
the shift in the HR profession from administrators to strategic
advisors. Those HR professionals who understand the language
of business, who speak in financial terms and who express the
value of their work in relation to its impact on the bottom line
make HR a compelling component in strategy discussions. A
CEO quickly connects with the head of HR who can present
an investment and return, rather than an expense view of the
function.
All too often, human resource (HR) organizations transform
themselves in a strategic vacuum, responding to the business’
day-to-day operating needs without a clear view of the big picture.
To be effective, HR needs to align its improvement efforts with
the company’s business strategy. This requires an HR transfor-mation
strategy that is realistic and executable – with accurate
plans, schedules, resource requirements and estimated benefits
that the company can rely on.
HR Role as a Strategic Business Partner Revisited
Business strategy charts a course of action designed to achieve
an advantageous and sustainable market position (market share,
margin/profitability, product or technical leadership, etc.). The
strategic management process includes strategic analysis, strategy
formulation, and strategy implementation. Great human resource
strategies are developed within the context of this ongoing
strategic management process. Elements of this integration are
shown in Table 1 (Bawany, 2004).
TABLE 1: BUSINESS STRATEGY AND HUMAN RESOURCE
STRATEGY
Strategic anal-ysis:
Establish the
strategic con-text
Strategy for-mulation:
Define a plan
to achieve an
advantageous
market posi-tion
Strategy im-plementation:
Execute the
plan
Business
Strategy
• Assess
driving forces
shaping the
future of the
industry (tech-nology,
com-petitors,
mar-kets,
customer
requirements,
etc.)
• Determine
key success fac-tors
• Assess
business and
organizational
capabilities
(strengths and
weaknesses)
• Define
strategic issues
• Determine
future market
positioning and
competitive ad-vantage
• Formu-late
mission,
vision, values
(a shared
mindset)
• Define
the required
culture, man-agement
phi-losophy,
and
business prac-tices
• Set busi-ness
objectives
and priorities
• Develop
action plans
(steps, timing,
responsibil-ity,
resources
required, and
performance
measures)
• Allocate
resources
• Develop
required or-ganizational
capabilities
(structure, sys-tems,
processes,
talent, etc.)
• Manage
performance
(establish per-formance
ex-pectations
and
accountabil-ity
for results,
manage perfor-mance,
evalu-ate
and reward
performance)
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2. The Role and Future of HR
Human
Resource
Strategy
• Assess
people and
organizational
aspects/impli-cations
of the
strategic con-text
• Assess
people-related
organizational
capabilities
(current situa-tion,
strengths
and weaknesses)
• Determine
future people
and organiza-tional
require-ments
(pre-ferred
future
state)
• Determine
people-related
business issues
(gaps between
current and fu-ture
state)
• Develop
people-related
strategies
to address
these issues
(objectives,
priorities, ac-tion
plans, and
measures)
• En-able
effective
change (com-munication,
involvement,
influence, ini-tiatives,
etc.)
• Align core
people manage-ment
processes
to enable strat-egy
implemen-tation
• Align
the human re-source
function
with changing
requirements
(organization,
roles, capabili-ties,
systems,
practices, etc.)
• Establish
and implement
a business plan
for the HR
function itself
(objectives, re-sources,
priori-ties,
measures,
etc.)
Today’s Role of HR and Challenges
People and organization issues are related directly to specific
strategic business issues and, in turn, derived from forces driving
the business and critical business success factors. Table 2 high-lights
issues currently being addressed through human resource
strategies by leading companies (Bawany, 2008):
TABLE 2: HR ROLE IN MANAGING PEOPLE AND OR-GANIZATION
ISSUES
ATTRACTING, RETAINING, AND DEVELOPING
CRITICAL TALENT
• Recruiting and selecting scarce talent with critical
skills
• Developing the required capabilities in the current
talent
• Building loyalty with less company commitment (e.g.,
job security) and employee commitment
• Providing the necessary “value proposition” for critical
talent groups
• Providing attention to the “whole person” (e.g.,
desired work environment, development, work-family bal-ance)
• Addressing the needs/interests of multigenerational
workforce
BUILDING HIGH PERFORMANCE WORK ORGANI-ZATIONS
• Building commitment to creating a high performance
culture.
• Establishing accountability for achieving business
results (e.g., balanced scorecard)
• Emphasizing the business case that provides a line of
sight to business results
• Building customer intimacy and an obsession on cus-tomer
satisfaction
• Communicating the direction the business is taking
and what it means to each person
• Promoting teamwork and collaboration across organi-zational
units and regions
• Enabling individuals to update their expertise and
skills, be responsible for learning
• Accelerating speed/cycles, innovation and creativity
• Aligning reward systems with changing priorities (e.g.,
incentives, profit sharing, stock ownership, team-based
compensation)
• Building values and principles which will sustain long-term
growth of company
ALIGNING PEOPLE WITH THE BUSINESS
• Involving employees in the business planning process
(top down, bottom up iteration)
• Building a business mindset, addressing how employ-ees
may contribute and building commitment through
understanding
• Establishing cross-business activities (e.g., cross-func-tional
teams, assignments, communications)
• Building more effective two-way, personal communi-cations
with managers, team leaders, or coaches
• Evolving from quality management and re-engineering
to balanced change integration focusing on growth, market
share, new markets, and customer retention
In a published KPMG Research, Rethinking Human Re-sources
in a Changing World (KPMG, 2012) there seems to
be a continued vast gulf between the perceived importance and
the perceived effectiveness of HR today.
Whether deserved or not, this stigma is clearly evident in the
survey. For example:
• 81% of respondents see talent management as a key com-petitive
advantage over the coming three years.
• Only 15% see HR as able to provide insightful and predic-tive
workforce analytics.
• Just 17% view HR as able to demonstrate measurable value
to the business.
With the growing importance of human resources to the success
of the business, HR managers and their departments have become
more involved in the business. They know the needs of the busi-ness
and are helping address those needs. One consequence of
this role is an increased involvement in the longer-term, strategic
directions of the organization. A second consequence is a new
emphasis on long-term activities in addition to the more typical
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3. The Role and Future of HR
medium- and short-term activities.
HR Challenge # 1: Adapting to a rapidly changing worker
profile - Demographic shifts are creating a diverse, multi-generational
workforce
An ageing population is very apparent throughout the devel-oped
world, raising concerns that the remaining working popula-tion
will not be able to bear the strain of increased expenditure
on elderly care and pensions.
Governments have responded to this reality through im-migration
and by raising the pensionable or retirement age.
Meanwhile, much of the developing world is confronting a
very different demographic challenge, and is seeking to devise
the appropriate education systems to prepare an overwhelmingly
young population for the workplace.
HR Challenge # 2: The world is much more global and in-terdependent
In 2013, the developing countries contributed 50 percent
of the world’s GDP. This is expected to grow to 55 percent by
2018, a significant increase in business opportunity centering on
these newer economies. Trends in leadership, talent acquisition,
capability development, analytics, and HR transformation are
all impacted by globalization. Companies that learn to leverage
global talent markets while localizing their HR strategies will
be poised for strong performance.
HR Challenge # 3: Technology’s evolving role in redefining
work and workforce demand with mobile, social, and cloud
computing continue to explode
All this technology has transformed the world of recruiting,
the world of education and training, the world of analytics, and
even the way we work. Today we are online 24/7 and relentlessly
flooded with information, messages, and communications. Not
only has technology become a critical and pivotal part of human
resources, but we have also identified a new human capital issue
discussed in this report: the overwhelmed employee. Organiza-tions
face an imperative to find ways to absorb more technology
while simultaneously making it simple.
The Future of HR
These changes in the workforce and workplace are significant,
disruptive, and here today. How can human capital strategies
power companies to thrive in this era of rapid change?
The specific recommendations HR could implement to address
these organizational challenges in their role as Strategic Business
Partner which are summarized below (Deloitte, 2014):
• Lead and develop: The need to broaden, deepen, and
accelerate leadership development at all levels; build global
workforce capabilities; re-energize corporate learning by putting
employees in charge; and fix performance management
• Attract and engage: The need to develop innovative ways
to attract, source, recruit, and access talent; drive passion and
engagement in the workforce; use diversity and inclusion as
a business strategy; and find ways to help the overwhelmed
employee deal with the flood of information and distractions
in the workplace
• Transform and reinvent: The need to create a global HR
platform that is robust and flexible enough to adapt to local needs;
reskill HR teams; take advantage of cloud-based HR technology;
and implement HR data analytics to achieve business goals.
In 2013, the SHRM Foundation launched a new strategic-thought-
leadership initiative in collaboration with The Econo-mist
Intelligence Unit, to identify and analyze critical trends
likely to affect the workplace in the next 5-10 years.
The following three critical themes emerged from the Report:
1. Evolution of work and the worker. The globalization of
business, changing demographics and changing patterns of mobil-ity
will continue to change the nature of work and the worker.
2. Engaging and integrating a global workforce. Cultural
integration and clashes/unrest will continue to grow globally,
at both societal and corporate levels.
3. Use of talent analytics for competitive advantage. Talent
shortages will continue to grow globally, requiring HR to become
the provider of human-capital analytics for input to strategic
business decision making.
Conclusion
The Human Resources function currently faces pressing,
interconnected challenges. The challenges for HR range from
adjusting to the demands of a globalized workforce, through
negotiating cost constraints, to taking advantage of new tech-nologies.
At the same time, HR’s potential strategic value is
under-appreciated. In order to emerge stronger from its current
struggles - stronger and better able to add value - executives must
recognize and implement three concurrent changes to the HR
function as we have discussed earlier.
We need to develop the capabilities required to be effective
business leaders and human resource leaders. As human resource
and business leaders, we strive for superb execution of strategies
that will give our business an advantage by matching internal
capabilities with external market opportunities far more effec-tively
than our competitors. We are obsessed with doing the
right things, achieving results, and thereby help achieve targeted
business objectives. To become effective in this role, we must
create opportunities to lead, find the time to lead, and develop
our capabilities to lead. S&P
BIBLIOGRAPHY
Bawany, S. (2004), HR as a Strategic Business Partner in Today’s New
Knowledge Economy, Human Capital (Singapore Human Resources Insti-tute),
March - April 2004.
Bawany, S. (2008), Strategic HRM: Aligning HR to Business Strategy,
Human Capital, August 2008 Issue
Deloitte Consulting LLP and Bersin by Deloitte (2014), Global Human
Capital Trends 2014: Engaging the 21st-Century Workforce
KPMG International (2012), Rethinking Human Resources in a Chang-ing
World
Mabey, C., Salaman, G. and Storey, J. (eds.) (1998) Strategic Human
Resource Management: A Reader The Open University/Sage.
Miles, R. E., and Snow, C.C. (1984) ‘Designing strategic human resource
systems’. Organizational Dynamics (Summer): 36-52.
Purcell, J (1995),”’Corporate Strategy and the Link with Human Resource
Management’, in Storey, J (ed) Human Resource Management: A Critical
Text (London: Routledge).
Wright, P. M., and McMahan, G.C. (1992) ‘Theoretical perspectives for stra-tegic
human resource management’. Journal of Management 18: 295-320.
Prof Sattar Bawany is the CEO & C-Suite Master Executive Coach of Centre
for Executive Education (CEE Global). CEE is a premier network for estab-lished
human resource development and consulting firms around the globe
which partners with our client to design solutions for leaders at all levels who
will navigate the firm through tomorrow’s business challenges.
Email sattar.bawany@cee-global.com
Visit www.cee-global.com
HR Strategy and Planning Excellence presented by HR.com | 11.2014 Submit your Articles 15