Human Resources is a vital part of every organization. HR does more than hiring, payroll, and benefits administration. They also help build company culture, keep employees engaged, and advocate for all individuals in the company. As challenges and needs of the organization change in response to recent market demands, internal expectations of HR are also changing; Organizations now need HR to be more strategic in their thinking and to bring their insights to the table to help solve business issues. Some HR departments are more agile and can rise to meet the expectations of their business partners. Others, however, are lagging behind.
In Argosight’s recent survey of over 500 professionals in the Human Resources & Talent Management Executive community, we asked the respondents if they agreed with three statements regarding their internal HR department:
1. HR focuses more on compliance / administration versus addressing strategic business challenges.
2. HR provides vision and strategic insight to help drive the business.
3. HR is a partner and core business decision-maker.
Below is a graph of the results.
More than half of the people (61%) who work in the business (outside of HR) still view HR as a compliance and administrative service provider. About 45% of people in HR agree with this group, admitting that the main part of their work is administrative. This, of course, is not a surprise to anyone. If anything, one would expect the percentages to be higher from both groups.
On the other hand, almost half of the HR respondents and about 25% of the business respondents say their HR department is participating in strategic matters in their companies. This shows that HR is in fact stepping up to the plate to provide higher value to the business. It also shows that HR’s business counterparts are noticing their efforts and hence, noticing the value they bring beyond fulfilling administrative tasks.
Although HR is making progress in some companies, it is very much in a period of transition. Transforming the department into the HR of the future will take more than time. Some changes that can help speed up the transformation process include:
Alleviate the traditional responsibilities of HR
Traditionally, HR was set up to provide administrative services so that an organization can run smoothly. These services are still needed by the organization, however, some of the work can be automated or streamlined using currently available software. Additionally, there are third party providers who offer services such as recruiting, benefits administration, payroll, etc. to augment HR departments. Decreasing the amount of admin work will allow HR professionals to attend to more value-added matters.
Educate HR on the business of the company
A common complaint about HR from the business is that HR does not understand the work of the company, specifically how the company makes money. Educating HR on this matter will allow HR to connect their activities to the company’s overall business strategy as well as help them understand the financial impact of the requests coming from the business. Seeing this link will help employees feel invested in the company and encourage them to leverage their roles to contribute to the business strategy.
Integrate HR into teams across all functions
With expertise in the management of people, HR can add value to the work of all teams across the company. Allowing HR to contribute to each team will build HR’s knowledge of that function. Additionally, it will close the clear disconnect between HR and the business and allow both to work together to achieve the common goal of business growth.
While it’s good to see that HR is starting to transform itself into a strategic partner to the business, they still have a long way to go before they have the support and recognition they need to become a true partner. The biggest obstacle in their way is not just senior management on the business side, but also internal HR professionals who hold tightly to their administrative work. Looking at the survey, HR needs to convince over 60% of the business community that they do more than admin work; prove that their work is strategic to about 40% of the business folks who disagreed; and on top of that, encourage 45% of HR professionals who think their work is mainly administrative to think beyond that work to create value for the organization. Basically, HR needs to convince about half of the people on the business side and half of their own people to let them do more strategic work. But on the bright side, the expectation/ desire to be more strategic is not only coming from high up in command; it’s also coming from within HR.