Future of HR: The Road Ahead

Future of HR The Road Ahead
One of the important major shifts of recent times is strengthening of democratic values within society. Organizational workforce is a sub-set of larger society and hence, such societal changes bring in corresponding shifts within the organizations.

As part of its evolution, Human Resources since its inception has undergone tremendous shifts and changes. Beginning with humble background of being a welfare-oriented function, meant to manage & improve working conditions and productivity of employees, it has transformed itself into an important strategic function. Intermittent stages have been Industrial Relations, Employee Relations, Personnel Management and finally HR.

The journey has been through multiple curves and turfs. Several adjacent & auxiliary functions were added and removed in various phases. Largely the evolution of HR, at different stages of its growth has been driven by the need to address progressively higher-order of requirements within corporate organizations. Research & development in humanities and other disciplines of applied social science have helped in adding new dimensions to HR as a function.

Changing All Wheels Together

With growing complexities and competition, HR models of delivery have undergone changes. Various experiments continue to be carried to find out more effective ways of addressing people, organization and culture-related imperatives. Quest is likely to continue as society keeps evolving and new paradigms of employment (relationships) keep emerging. People centricity of commercial organizations will continue to increase, as other factors of competitive advantage get equalized among significant players.

One of the important major shifts of recent times is strengthening of democratic values within society. Organizational workforce is a sub-set of larger society and hence, such societal changes bring in corresponding shifts within the organizations.

Continuing with the trends of last 2 decades, this change has been exerting pressure on corporate organizations for more transparent, equitable & democratic ways of working, behaviors & systems. Expecting fairness in people management systems is no more a premium element, its assumed to be existing by default in psychological contract.

Space of conventional hierarchy will continue to shrink further and will remain limited mostly for administrative convenience. Models of value creation have become more fluid with prevalence of collaborative work systems.

HR as a function in progressive organizations is cognizant of these slow burner changes and aligning internal people practices in line with these mindset shifts within communities. These have also become important to assimilate next gen members of the workforce.

Decentralized model of HR delivery with resource deployment closer to employee base, remained in practice for long, wherein most part of HR value chain was covered by HR teams at operating unit level. A few elements like HR strategy, budgeting, governance, assurance & policy making were centralized in such regime.

Use of technology has led to centralizing employee services for uniformity of experience & also for cost advantage. It has helped the function become more resource efficient with large number of team members available to carry out higher value adding jobs.

Journey of HR to evolve into a function with significantly higher share of strategic impact needs continuous improvements and refinements on several count, primarily in evolving key systems. Delivery model and overall capability within HR community are critical from implementation perspective.

Advancement of digital technology presents opportunities before HR to move several other transactional parts on tech platforms for higher efficiency and flawless delivery. More insightful & real time data related to employees, productivity, engagement, morale, skills, competencies, drive, traits, collaboration etc. will progressively be available which will open new vistas to drive value creation into critical business processes.

One of the core propositions of HR has remained its proximity to employees. Staying closer to people has helped it being connected to softer aspects of workforce management, knowing the pulse in advance and acting upon it. Advent & use of digital systems poses a challenge of HR getting away from its personalized approach and relationship advantage. While pushing tech agenda, retaining the core competence is critical. Change of texture on this count may alter several other offerings. 

Simplifying HR Mental Model

Role of HR in the context of corporate organizations is through segments that it must deal with. There are 3 distinct segments that need to be catered by the team in the course of its work viz. employees, business and the organization. Relationship with employees is b2c i.e. for benefits administration, clarifications, role & position related queries, concerns of any nature in employment matters, wellness, career management, rewards, recognition, communication etc.

Business partnership relation is more in the nature of b2b encompassing recruitment for the team, restructuring, rewards distribution, motivation & morale-related issues, performance matters, training & capability, etc.

There is a vital segment which is invisible but all-encompassing i.e. the organization itself. Organizations are continuity & meant to be perpetual. The entity gets represented by different set of people at different stage of existence. Being intangible, it doesn’t represent itself vocally, the way other 2 segments do. Hence, a proactive calibration and conscious vigil is required to assess the impact of various actions that shape the organization.

Elements like culture, ethics, corporate-level organization design, governance systems, underlying capabilities etc. are part of this segment. Such elements have long-term outlook with longer horizons for shifts and impact. As third segment is not vocal, there exists a probability of its needs getting lesser priority over those of other two segments.

Moving-up the Strategic Value Chain

HR organization is expected to address needs of all the 3 segments effectively & efficiently. Though there are strategic elements in each of the three, scope of creating strategic impact is most in the third segment, the intangible organization. It also contains softer elements, which have profound and long-term impact in organization’s effectiveness & success. These elements when managed well, help attract disproportionate share of high-end talent into the organization.

Employer brand proposition & perceptions have magnetic impact in driving culture aligned talent towards the organization. Nurturing employer brand elements carefully and fulfilment of brand promise gives exceptionally high tangible & intangible returns in long-term to the organization. Addressing it as a critical part of managing institutional requirement where HR needs to progress well beyond perception level.

Compared to other 2 segments viz. employee services and business partnership, institutional elements are more difficult to address & manage. Employee & business-related matters are part of well-established process architecture within organizations and hence easier to follow with clear metrices of adherence. In institution building elements, almost every opportunity is unique requiring custom solution. Higher efforts are needed to socialize with stakeholders for consensus and for implementation.

Over the years, HR has moved up very well in process design and their implementation. Such process orientation has helped in bringing clarity of its tangible contribution during performance cycles. Ironically, it has also led to a myopic orientation within the function to stick to process provisions, losing sight of their alignment with larger purpose or business objectives.

Re-arranging the Building Blocks

Journey ahead for HR in becoming a truly strategic function needs blending outcome orientation to processes. Falling in love with one’s own creation is human. Eliminating the unnecessary is smart. Focus needs to be on identifying vital few and going deeper into their development and deployment.

Selection parameter for identifying vital building blocks among others is the scope & potential to create impact in achievement of larger business objectives through talent, culture & capability levers. Competitive context of the organization may alter this choice making within overall framework.

Application of behavioral science into business & HR processes brings more certainty, transparency & trust into people related decisions. As an example, use of relevant & credible psychometric tests for quantitative measurement of individual traits & drivers (required for success into role) leads to better recruitment & promotion decisions.

There are various used cases across continents which have reported immense success on this count. Similar applications are available for use into other processes related to performance, rewards, career management, learning, succession etc.

Solely relying on perception driven (conventional) decision making in people matters contains possibility of risk with the potential of collateral damage to institutional elements in long term. Hence designing frameworks that help taking science-based decisions or at least having additional data points (to aid & corroborate such decisions) is a direct contribution for long term systems approach as against person dependent system.

Ability to identify & manage important levers of business model which help in disproportionate wealth creation is a gifted ability among entrepreneurs and in some professional managers. One of basic levers, organization design & structure is largely within the scope of HR.

Focus of HR to design value creating team structures and staffing those with required talent is another area of opportunity. Initiatives to create & nurture teams which develop new propositions and solve intricate problems foster growth of the organization. Such interventions need full understanding of business model by HR team and an active partnership with the line organization in co-creating people focused solutions.

Organization design is more than arrangement of lines and boxes. It is the vehicle to carry out the strategic intent. Anti-fragile structures also act as shock absorbers to the vagaries of business cycles. Moving up further onto value chain from tactical to strategic continuum requires careful application of ingenious faculties, partnering with stakeholders and working with internal or external specialists for ideas and convert them into tangible propositions. In the era of disruptions, carefully designed structures can significantly enhance value creation ability of the organization and hence needs disproportionate investment of efforts.

Change of Course or Stay on Course

While other parts of HR value delivery is important to manage everyday needs of organization, addressing elements which have direct bearing on growth & excellence will accelerate the journey ahead. HR leaders also need to focus on building internal capabilities of HR team to progress this agenda.

New generation of HR professionals bring youthful energy and cutting edge of knowledge base. Their strive needs to be channelized into acquiring competencies and skills that are required to move HR agenda ahead. Together with building process orientation and skills, assigning high value projects (with empowerment and opportunity to implement their work) helps in accelerated growth of these professionals.

HR has mastered to a large extent, the art of employee championship and streamlining services through process deployment. Managing perceptions normally takes precedence over managing results. Designing popular slogans and programs with short term shelf-life has also been in existence for quite some time. Objective of such measures is to manage in short term and move to next program in next quarter. Where do we go from here?

To identify and manage critical people-related systems which have a direct bearing on business outcomes is the road less travelled. Set of such HR systems include high commitment work systems, high involvement work systems, high control work systems, high reliability work systems, high performance work systems and customer centric work systems. The strength of relationships between these HR systems and organizational performance varies due to change in business strategies and organizational context factors.

Modern-day complexities of business together with digital transformation present a never before opportunity to shift gears and steer the course to add high impact strategic elements as integral part of the function. Choice like always remains in the hands of practitioners on the forefront.


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