In today’s organisations needing to move forward and achieve true transformation, there are three clear requirements that HR leadership must deliver to confirm its significance in providing strategic value within its organisation and at the same time address evolving demands from employees.
First, in light of the disruption caused by the Covid-19 pandemic and expected disruptions in the future, HR must take a key leadership seat at the strategy table to lead our human capital strategy and transform workplace culture.
HR’s role in transformation relates to shaping the corporate and workforce culture to become more agile to challenges ahead.
The Covid-19 pandemic amplified uncertainties that will be a part of our lives and economic landscape. Hundreds of thousands of organisations worldwide weren’t prepared and equipped to brace the pandemic’s global business and economic impacts. The result: thousands of businesses ceasing to exist and millions of employees left jobless.
For eCommerce and technology enabled companies like Amazon, Alibaba and Zoom, they were able to grow. Their business models were able to address changing consumer requirements. One observation is that some businesses were ‘lucky’ while others were ‘ready’. ‘Ready’ to pivot and make the necessary changes to their service proposition and operating models to keep pace with shifting customer needs.
The need for organisations to be agile and pivot to change has never been more urgent. To achieve this, a human capital strategy that empowers, enables and inspires employees to identify, lead and execute change / transformation is necessary. Led by HR, our human capital strategy must transform to enable organisations and the people that are our organisations to emerge stronger and fitter.
Second, utilising technology as the enabler and always putting humans first at the heart of our decisions. Hence, HR’s role is to shape the future of work, then lead organisations through the redesigning of work to engage our employees more sustainably.
According to a report by KPMG, one of the biggest questions HR must answer is ‘how can it utilise technology to truly understand the needs and motivations of employees?’ AI or artificial intelligence is also a big part of HR tech prompting HR leaders to prepare the workforce for it.
Despite that, technology will not replace the human workforce in the future. Continuously eliminating or reducing human capital capacity and replacing it with technology is not sustainable. Technology as an enabler is the next step after putting humans first to achieving organisational transformation.
Digital transformation, first of all, is not about technology. It is about people with the right mindset for change and progress to magnify technology’s efficiency and reliability. In order to achieve digital transformation, organisations must first recognise and address employees’ concerns about being obsolete because of technology.
That being said, we need to stop creating more work for the sake of work alone. While this has been the outcome of a once noble purpose to bring the economy out of past depression, it’s not the case today. Recessionary times led us to stagnate. The work of tomorrow automates repetitive tasks that do not require human judgement or critical thinking.
With technology as the enabler, HR will create the work of tomorrow. By breaking down the barriers of repetitive tasks, organisations can unlock our human capital and create meaningful jobs that redevelop themselves over time through connected learning and reskilling.
The increasing demand for HR expertise and services from organisations across the globe under different sectors has seen capable and insightful HR executives taking their seats at the boardroom table.
To retain their seats in the boardroom, HR must prove to be more than just process administration, governance and support. Instead, HR leads must focus on accurately, and credibly reporting on organisations’ human capital ROI in clear financial, social and governance terms.
Human capital needs to be accounted for. Just like technology and marketing investments that deliver measurable value over time to organisations’ financial performance and share price.
Financially tangible human capital metrics showing us that there is a strong ROI on human capital investments are still a challenge for most organisations to report. There is a strong need to improve HR’s digital dexterity or the use of advanced data and analytics. This is important to generate proficient workforce insights that are valuable for organisations.
The change agenda will require HR to measurably articulate the human capital impact that converts to financial metrics and ROI. That means HR needs to be more strategic and represent human capital as a key investable asset rather than just a cost.
For HR to fulfil all three requirements, HR as a function must first transform. HR leaders now have the opportunity to build-up their function with strategic and commercial thinking. HR must communicate data-driven insights in a business sense and deliver measurable and long-lasting value for organisations and our workforce.
It is then that HR will evolve from functioning in the shadows of a support function. Therefore, HR will influence and lead change within the workplace alongside the senior leadership team.
For our next post, we will discuss the challenges and opportunities in measuring HR’s financial performance. Follow Will for new insights as they are released.
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