HR practitioners and educators alike agree on one thing – the people operations unit of the past has evolved to become more than just a cost centre, saddled in routine administrative matters such as claims processing, payroll management, or scheduling interviews.
Present-day HR holds its own, directly affecting organisational bottom lines by adding value through the use of big data analytics to drive the design of meaningful company-wide recruitment, engagement and retention initiatives.
In short, the function has evolved to become far more business-minded.
The transformation of HR from a primarily data-extracting to a data-analysing unit stems from the inherent need for companies to have a leg up on competition through innovation. That innovation naturally takes place around an organisation’s most important assets, its human capital.
“Organisations are constantly looking for an edge against their competition, and it distils down to what one does better or differently,” says Dylan Choong, Chief Talent Officer of Singapore concept hospitality chain The Lo and Behold Group.
And what separates an organisation from its competitors lies in how it integrates its people strategies. That’s where HR comes in, Choong says.
“The call out is really for HR to be seen as a partner and enabler to the business in harnessing an organisation’s human capital assets,” he stresses.
To truly leverage its workforce, HR has had to take on a more strategic role than previously.
“HR needs to review its focus from ‘the organisation of the business’ to ‘the business of the organisation’,” states Choong.
“So if HR wants to be seen as a relevant partner at the strategic table, this function has to meet the demands of the business and move further up the continuum of adding competitive value.”
Sales and marketing software company Hubspot’s Global Recruitment Director, Declan Fitzgerald, believes the transformation boils down to changing workforce demographics and lifestyles.
“These days, employees no longer look at just the material benefits a company can provide, but also evaluate how meaningful the job is to them,” he explains.
Fitzgerald adds that technology has also enabled remote working, and more employees expect to be able to work “wherever and whenever”.
“Too many companies operate as if they are frozen in time. There is a need for HR to become more people-friendly and transform the way their employees work,” he says.
Expanding work scope
Steven John Armstrong, visiting professor of organisational behaviour at PSB Academy, explains that intense market competition and the economic recession have also made it critical for organisations to lower operational costs and increase productivity.
“Full spectrum HR can complement the overall organisation strategy by moving beyond the administration of ‘personnel’ functions, into proactively developing strategies to motivate and nurture the organisation’s ‘people talent’, and creating a conducive work environment for ‘extra mile’ service and value innovation,” he says.
The Lo and Behold Group, which owns Singapore-based restaurants and lifestyle clubs including The Black Swan and OverEasy, underwent an HR transformation in 2014. As part of this, it began using psychometric profiling for talent attraction and recruitment.
This platform has allowed the talent division to screen and assess job candidates more accurately, which has resulted in what Choong calls “the best hires for the type of hospitality that our group offers”.
Staff retention has always been a significant problem for the food and beverage industry, and Choong says turnover has fallen by 7.5% since the change.
This has led to reduced on-boarding and retraining costs for new employees.
According to Choong, employee engagement and high-performance culture have also increased significantly.
He adds that the transition was made smoother because the company’s owners view HR as a strategic business component instead of, merely, an executive function.
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Like The Lo and Behold Group, Hubspot has based its policies on employee information, creating what the technology firm describes as the “Hubspot Culture Code” – a 128-page internal document outlining the people, culture and values of the organisation.
Described as “part-manifesto and part-employee handbook”, the document is updated with feedback from employees periodically to reflect the true consensus of its population.
Fitzgerald says the ability to make suitable recommendations based on data analytics gives the HR team a newfound edge.
“By mapping trends and patterns of employee movement, HR professionals can forecast headcount needs and manage talent,” he explains. “This will have valuable impact on recruitment and help companies retain employees with the necessary skills and competencies to take businesses to the next level.”
The code is also a major advantage for Hubspot employees because it allows them to shape their own workplace culture. “That culture is important for HR,” says Fitzgerald, noting that few organisations really make use of the cultures their staff develop.
“Culture does not just help attract amazing people, it amplifies their ability and helps them do their best work,” he says.
“HR can take ownership of company culture and implement activities or changes to employees’ work life that will not only increase their productivity but also elevate them and their skill-sets.”
Choong also underscores the importance for HR to be well-versed in human capital analytics so as to optimise the workforce.
Referencing authors Thomas Davenport, Jeanne Harris and Jeremy Shapiro, he says analytic tools and software programmes allow HR to: track an employee’s performance by studying data points; gain insights into specific groups of employees; prioritise actions that have the greatest impact on business; and identify retention levers of key talent.
“Imagine being able to receive the right intended HR intervention programme through segmenting HR data,” adds Choong.
“These are huge, positive impact areas, particularly for us in the food and beverage industry.”
According to Choong, the proliferation of data analytics throughout the HR sphere has been made more possible by the falling cost of data collection and storage, the increasing speed of data creation and transfer, as well as the emergence of alternative data sources, including social media.
Beyond analytics, HR departments can also add value through careful and strategic communication within the organisation, says PSB Academy’s Armstrong. This can prove particularly valuable when it comes to easing the company population into any new or unfamiliar organisational structures.
While there is a growing trend of technology firms and start-ups employing flatter organisational styles to encourage greater communication between co-workers, Armstrong believes this structure can be more difficult to implement in Asian companies because of cultural norms around hierarchy.
Even then, HR can facilitate the transition by bridging the gap between managers and staff.
Fitzgerald reiterates this need for HR to assist all employees in adapting to a newly-developed culture; and communication is the most important tool available.
“It helps if HR managers can explain the new culture in a personal context and let employees know how the change can help them as individuals,” says Fitzgerald.
“Above all, ensure transparency in the change process. Employees should have a clear idea of why the new culture is being implemented, and what the final goals are.”
He emphasises that for employees who are resistant to change, it is especially important to include them in the planning and feedback stages.
“This gives them a reason to care about the new culture,” he states.
Fitzgerald says HR can also introduce an incentive programme to reward early adoption of new organisational culture and styles. This will help to limit initial resistance and reinforce the opportunities presented by the change.
Armstrong notes that line managers have been increasingly tasked with traditional HR responsibilities, such as recruitment and dismissals. In these situations, HR should provide training support.
“HR has to take on a more strategic role in equipping line managers with the knowledge and soft skills to make better managerial decisions, and to focus on strategies that align HR management with an organisation’s goals,” he explains.
It is also important for HR practitioners to understand the ins and outs of the business, says Choong. That typically means spending quality “face time” with the various departments to understand their specific needs and concerns.
“I will prioritise the time spent with operations, finance, and sales and marketing,” he says. “Engaging stakeholders in these functions is often where I would start, and I will listen intently about their pain points and limitations.”
Choong believes HR can add further value through this type of department outreach, by “listening to what is done and how things are done, and then making suggestions to where HR can support or mediate”.
Based on the information collected, HR can then review internal processes and policies that are cumbersome or no longer effective.
“It is about having a vested interest in making the HR function easy to partner with, as opposed to the department being the policy police,” says Choong.
The impact of strategic talent management on internal stakeholders has undoubtedly been significant. Most HR departments who have moved in this direction report improvements to both productivity and overall staff happiness.
“We see employees re-energised and engaged with their work,” says Armstrong. “That’s important because companies are increasingly recognising that they need to take a step back to see beyond their customers.”
Fitzgerald says Hubspot employees are also happier, partly because they now have a hand in the organisation’s plans.
“We value transparency and openness. This fosters a culture where employees feel free to voice their opinion and give feedback on company policies,” he explains.
“They are also more productive and have a stronger sense of loyalty to the company, not just because of the benefits, but because they feel that the company cares for their personal development.”
Citing a recent White Paper by the International Data Corporation, Armstrong believes there are still vast opportunities for Singaporean companies to unleash the national workforce’s potential.
The Asia-Pacific study found that Singaporeans workers were the least satisfied and engaged in the region, although they were also among the least likely to change jobs.
“If companies can rethink and accommodate the needs of their employees better, this would trigger a virtuous cycle where employees are better motivated, more productive and contribute positively,” he notes.
The article first appeared on HRM Asia.
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