As technology matures from time to time, the role of human resources needs to evolve. HR teams need to grow to meet the need for new business challenges and opportunities globally.
In most best-of-breed organisations, HR takes on an even greater role. HR becomes a prerequisite competency for leadership, functional and operational decision making. HR also serves as a strategic planning team that could accelerate to meet the needs of a company’s success. In other words, HR is expected to meet the competency beyond HR and business function to continue to drive business value.
See also: 7 Important Things to Emphasise in HR Leadership
EY report Partnering for Performance: The CFO and HR highlights evidence that bridging the gap between Human resources and finance functions (as a representation of the whole business market). The report showed that there are better business performance and stronger improvement across a range of human capital metrics, including employee engagement and productivity when human resources is growing up – learning how to talk. For example, HR should understand a company’s financial condition as finance is considered a language where organisation and boardrooms could both understand. As a result of mastering this language (finance language), HR will be able to impact organisation as a whole and drive good results.
Technology and analytics are needed to translate data – because deciding on human capital value is no different from deciding on capital investments in the business with an expected return on investment. Human resources is not always about cost but about actual people and the operational, strategic, financial, and non-financial risks inherent in having the wrong talent. Once HR masters the language of these operational and non-financial concepts, they will be able to measure the impact it has and prove its contribution is worth the investment.
High-performing organisations speak in terms of metrics to measure return on invested talent, which is similar to the measure of return on invested capital, and utilize predictive analytics to model outcomes and behaviours for talent. This is a radical departure from the traditional view of talent as a cost opposed to an earning generator (investment in business that is only for profit). In this essence, growing up is about learning how to play better with mentioned concepts (operational, strategic, financial and non-financial concepts) and to use analytics to make sure that it aligns with a purpose.
Human resources can play a vital role by helping organisation’s leaders understand how to interact with a future workforce that has more generations in the workplace than any other previous workforce, a more diversified and inclusive workforce, a more global and flexible workforce, etc. This level and type of play will be different within countries, within business units, depending upon the strategy of the organisation. It will demand that all leaders have the interpersonal and talent management skills (coaching, developing, motivating, etc.) to get the most out of the future workforce.
Tomorrow’s HR will continue to be embedded in key functions and business units as HR business partners, but more importantly, the competency of HR will reside in all good leaders. Human resources as a function will continue to outsource, share services, and centralize the tactical components of HR. But the greatest value in the future of HR will be as an accelerated talent development centre, ensuring that all leaders in the organisation are effective people leaders who can understand, interact with, and enhance their organisation’s talent more effectively in the future.
Read also: How to Create an Employee Handbook that Employees Actually READ?
