Soft Skills

HR: A strategic partner

Human resource management reflects an organisation's strategy regarding people, profit, and overall effectiveness, writes Smita Sah.

For years the HR function in an organisation had not been linked to the corporate profit margins or bottomlines. The role of human resource management (HRM) in a company’s strategic plan and overall strategy was usually shrouded in fuzzy terms and abstractions. It was merely a tagalong unit with people-oriented plans, not a major part of planning or strategic thinking.

HR professionals were rarely seen in an organisation as they just worked behind the scenes to ensure that personnel records were in order and employee benefits were being properly administered, but the job stopped there. Their function was concerned with nothing more than simple filing, housekeeping and record keeping or else they had to brandish the whip to ensure that systems, policies, rules and regulations are properly adhered to in the organisation.

Most large companies today outsource all their HR requirements to boutique consultancy firms. Sometimes the entire HR department is outsourced. Sometimes managing various functions within the department such as recruitment, training and policy formulations is handed over to consultants since companies believe that outsourcing such functions would help them to focus on their core business. In fact, this trend is mutually beneficial as it gives the company access to proven expertise and the professionals gain exposure to a diversified range of HR activities.

People are the greatest assets for an organisation, because, through people all other resources are converted into utilities. However, management of ‘people resources’ has always been a vexed problem ever since the beginning of organised human activities. People limit or enhance the strengths and weaknesses of an organisation.

Today the changes experienced by organisations around the world include growing global competition, rapidly expanding technologies, increasing demand for individual and team responsibilities and competencies, increasing legal and compliance scrutiny and rising customer expectations. Changing markets and advance in communication technologies are all paving way to a new kind of working—in virtual teams. While virtual teams bring their share of opportunities they also bring their share of challenges. They call for a greater emphasis on communication and openness to a global community. As long as the benefits outweigh the challenges, virtual teaming enabled by technology will increasingly be the way organisations are going to work in the future.

These changes combined with the realisation that the performance of a firm’s human assets must be managed, led and coached have resulted in the need for strategic planning and modern HRM practices.

Today, because of the recognition of the crucial importance of people, HRM in an increasing number of organisations has become a major player in developing key plans. Today’s HRM strategies must reflect clearly the organisation’s strategy regarding people, profit, and overall effectiveness. The HR professional like all managers is expected to play a crucial role in improving the skills of employees and the firm’s profitability. In essence, HRM is now viewed as a “profit centre” and not simply a “cost centre”.

The strategic importance of HRM means that a number of concepts have to be applied by HR professionals to ensure that an organisation will survive and prosper. Some of the key concepts are:

• Analysing and solving problems from a profit-oriented, not just service-oriented point of view
• Assessing and interpreting cost benefits of issues like performance, legal compliances, employee satisfaction, salaries and benefits, recruitment, training, absenteeism, turnover, training effectiveness, overseas relocations, layoffs, attitude surveys, accident rates and return on investments
• Using planning models that include realistic, challenging, specific, and meaningful goals
• Preparing reports on HRM solutions to problems encountered by the firm
• Training the HR staff and emphasising the strategic importance of HRM and its role in contributing to the firm’s profits.

Today’s HR manager has undergone a sea change in the outlook and demeanour. From the most dreaded person in the organisation, an HR manager has now become a counsellor and mentor who provides solace and comfort to the employees through pep up talks, motivational lectures and theories on how to improve the standard of life. Often HR managers end up giving guidance and directions to new employees at work so that they find solace and comfort in their workplace and gel with the work culture of the organisation. HR managers in IT firms often end up dealing with such employee counselling matters as a regular routine of their day-to-day chore.

HR managers today are the brand ambassadors of their organisation as they have to deal with a wide spectrum of stakeholders. The HRM function today is therefore much more integrated and strategically involved. The importance of recruiting, selection, training, developing, rewarding, compensating and motivating the workforce is recognised by managers in every unit and functional area of an institution. The increased strategic importance of HRM means that human resource specialists must show that they contribute to the goals and mission of the firm. The actions, language, and performance of the HRM function must be measured, precisely communicated and evaluated.

Thus HR has now become a partner in strategic planning and decision-making. This leads to HR engaging in policies, processes, and procedures that are aligned with strategic goals. Managers, who have a drive, are able to create a balance, are engaged in activities, align processes, are able to go with the flow, create value teams, and learn from each other.

So today the HR professionals are analytical, knowledgeable, strategic, flexible, sensitive and open. They are aware of the market developments and new policies flowing in.

The era of accountability for HRM has resulted from concerns about productivity, from widespread downsizing and redesigning of organisations, from the need to effectively manage an increasingly global diverse workforce, and from the need to effectively use all the resources of an organisation to compete in an increasingly complex and competitive world.

The focus of HRM is on developing, maintaining and managing future competencies. Continual learning opportunities and portability of skill sets are key factors that contribute to this competency. The next time you have to meet with someone from human resources, remember that without him/her, your company might not be running so efficiently.

Smita Sah is HR Manager with eInfochips, Ahmedabad