Why does the HR function seem to be losing its credibility again?

The value that the function delivers has been a topical area of discussion recently. During the pandemic, the existing challenges were amplified, and the displayed value was significantly elevated, with CHROs co-steering the organisations towards stability. Two years later, the debate on its effectiveness is back in the rounds.

A recent 纽约时报 article highlighted the growing dissatisfaction within and outside the HR community. Employees often see HR as enforcers of unpopular rules. HR professionals themselves feel burnt out, overwhelmed, and underappreciated, because of the sheer breadth of challenges they have to deal with. Business leaders think that HR is barely able to meet the demands of talent to run the business, and for the most part, is not ready to lead, as yet.

This isn't just a recent trend - HR has been criticized for over a decade. Being an HR Practitioner for two decades, I can say it with fervour that there is no question that it is one of the most strategic functions in the business today. Along with Finance. Simply because, the biggest struggle companies face is either a lack of/or optimum use of skilled talent or capital, to produce consistently favourable business outcomes.

The challenge is - the HR function struggles to balance a wide variety of transactional tasks with the strategic work that drives real value, and the honed capability to drive the latter.

The frustration is palpable within the HR community, and it's clear that something needs to change.

So, what should change?

As Dave Ulrich noted in an article a few years ago; in any function, we have 20% professionals who are exceptional, and add great value to move the company forward; 20% are locked into fixed mindsets and lack either competence or commitment to deliver real value; and 60% are in the middle. It is easy and fair to critique the latter 20%, but not fair to paint the entire profession with the same brush. Perhaps, it's best to not focus on the earlier and the latter 20%, but the 60% who should be actively engaged in learning how to help their organisations improve.

To move the needle, CHROs can focus on the below:

Focus where strategic value is created - Delivering HR-related operational tasks well is important, but doing so is table stakes. The CHRO ought to provide direction to the HR team to focus on areas that create the most value, and step-up to the implications of the new world of work. These are, but not limited to:

1. The entire talent value chain - Understanding the demand and supply chain of talent, and what you do with talent when you have - drives sustainable competitive advantage.
2. Leadership - The leadership team’s alignment on values, company strategy, short to medium-term goals, leadership behaviours, and coherence as a team sets the tone for culture for the next set of leaders and organisation, at large.
3. Capability - building continuous learning agility across the organisation, to stay resilient and ahead of the curve, despite external changes, helps maintain the company’s competitive edge.

Organise as per business context - There are many operating models for HR, but one that works best is that which is aligned to serve business and employee goals. However, the critical aspect in design is how the CHROs organise the HR teams to provide enough bandwidth to deliver areas of strategic value.

Invest in HR capability building - While ‘being good with people’ was a key mantra to join the HR profession in the past, in today’s times, HR practitioners require a wide range of sophisticated skills, not only in talent and leadership areas but many others, such as:

• Understanding the dynamics of how the business works, makes money, competes
• Systems thinking and creating incremental impact
• Excellence in the design and implementation of various people solutions
• Anticipating problems and proactively building readiness for solutions
• Execution Excellence
• Ambidexterity – balancing the short-term with the long-term
• Using data to make decisions
• Using technology to solve problems at scale…to name a few.

Through, formal and experiential learning, CHROs should build an equal impetus on investment in the HR capabilities. ?

The contribution of the CEOs to elevate the HR function towards its strategic effectiveness cannot be undermined. At least from those who do believe in its potential to become a strategic partner to them.

It is not easy to move a profession forward. And that’s why it's crucial to continue this conversation – about the challenges HR professionals face, and most importantly about the solutions that will help increase the credibility of this important function.

#leadership #hr #culture #businessstrategy #transformation #talent

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The above views are being made by me in a personal capacity. It is not intended and should not be construed as a representation of any Tata entity.

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