HR is Fast Becoming a Strategic Partner in Businesses

September 22, 20158:34 am2061 views

The HR function is evolving and undergoing a radical change. From being regarded mainly as an administrative function, the role of a HR is now emerging as a strategic business partner for organisations.

The strategic role of a HR is aligned ever more closely with the business and focused on recruiting, developing and managing the talent on which organisational success depends. Almost half (45%) of senior HR leaders in South East Asia directly report to the highest levels of management (CEO, CFO etc.)

According to a recent study by Michael Page, a leading recruitment company, it tracks the changing and challenging role of HR for businesses globally. The results are based on extensive data collected from over 2,500 HR managers in organisations ranging from SMEs to blue-chip brands in a cross-section of industries.

The survey findings are highlighted in a report titled, ‘Global Insights: HR Barometer 2015’. The report provides compelling evidence that organisations are now gearing up for a new “war for talent.” 27 percent of organisations have increased their budget for recruitment in the recent months and technology sector is leading the global demand for talent.

Among the most pressing priorities, HR leaders in South East Asia emphasised on their focus on talent: Talent Management (53%), Talent acquisition and recruitment (33%) and Succession Planning (32%). Employee performance (72%) and staff turnover (67%) are the dominant HR KPIs in the survey, tracked by more than two-thirds of organisations.

This survey also brings to light regional differences: for example, only 45% of HR managers in South East Asia expect to see an increase in staffing levels over the next 12 months, as opposed to 75% in the Middle East. Similarly, only 3% of South East Asia’s HR organisations list diversity and inclusion as a priority, versus the global average of 4%.

See: Positioning HR as a Business Partner

Taking an objective look at the challenges and priorities of senior HR managers and leaders across the world, Anthony Thompson, Regional Managing Director, Michael Page – Greater China and South East Asia says, “South East Asia’s HR leaders are found to be below global average for the percentage reporting into the highest levels of management, but they seem to be slightly ahead of the curve when it comes to scope of their responsibilities. Higher percentages than the global average have increased responsibility for improving talent management, talent acquisition, performance management and employee retention.”Michael Page_HR as Strategic Business Partner 1Half of organisations in India, South East Asia (Indonesia, Malaysia, Singapore and Thailand) and Turkey rate talent management among their top three HR priorities for the next twelve months. In India, an above average number of organisations also identify talent recruitment / acquisition as a major HR priority. This correlates with other evidence showing that India and Asia Pacific lack skilled labour on a large scale.

An above-average number of Indian organisations acknowledge talent acquisition /recruitment as a major HR priority. They are also significantly more likely to track recruitment efficiency as an HR KPI – 68% compared to 43% overall – suggesting that recruitment is a widespread concern in India. Recruitment efficiency is also tracked by a large number of organisations in China, South East Asia and Turkey.

HR shows particular strengths in crucial issues such as talent recruitment and talent management. However, there still appears to be room for improvement, especially in respect to measuring HR KPIs as a solid foundation for decision-making and in relation to diversity and inclusion.

Adopting a systematic approach to HR challenges is surely an indispensable condition of being regarded as a business partner. From this study, it is apparent that HR must position itself to fulfil the organisation’s need for talent and to be a change agent; in other words, to operate as a strategic business partner helping to steer the organisation and its people.

Will the next Michael Page HR Global Barometer show that HR has transformed itself into an agile, responsive function, using all the tools at its disposal to identify and quantify talent requirements and accelerate delivery, while creating the right environment for stellar employee performance? Only time will tell.

Also read: Top 6 Emerging Skills for CHROs to lead HR 2020