Feature

The business impact of HR

Sudipta Dev on why HR needs to speak the language of business

The changing role of HR is aimed to make the function a strategic partner in business growth. Instead of being a support function, HR professionals need to speak a language that the rest of the organisation can relate to—in terms of business development. It has become the powerful player in the organisation that can bring figures to the table and state its point with quantifiable data.

"In a highly technology and people-driven industry, HR function’s prominence is vital from the point of human capital management and RoI" - Shrikant Kulkarni Senior Vice-President, HR KPIT Cummins Infosystems

To enable this, the HR department needs constant support from the top management who should create the right ambience in the organisation to enable the efforts of the department and involve them in the decision-making processes. “Building the talent continuously from within and from outside when needed is a continuous challenge, and a supportive eco-system in every organisation with the top management’s support will help to achieve the same,” says Shrikant Kulkarni, Senior Vice-president, HR, KPIT Cummins Infosystems. He asserts that HR is at the table and not on the table in the current business scenario. Being a strategic function like any other function in the industry, it is impacting the business from the standpoint of talent acquisition and talent management in view of the ‘global war’ for talent. “In a technology and people-driven industry, HR function’s prominence is vital from the point of human capital management and RoI,” adds Kulkarni.

Business drivers

"HR has made significant progress in aligning and partnering with the business. It is getting considerable time and attention from the CEO’s office" - Deependra Chumble Chief People Officer Hexaware Technologies

HR needs to understand the business drivers for the company. HR policies and processes impact the business, particularly those pertaining to recruitment, retention and talent management. V Ranganathan, Managing Director, BNA Technology Consulting, believes that these factors should be modified and be aligned with business objectives.

Deependra Chumble, Chief People Officer, Hexaware Technologies, feels that there are three pillars in organisation building—structure, processes and people. Out of which the first two are passive without the third one, that is the people. “HR can play a significant role in getting the right people, help them learn and develop, become a sounding board for the employees, the bridge between various management levels, create the right environment for them to deliver, and most importantly it can act as the ‘change agent’ in these days of uncertain external environment. HR has made significant progress in aligning and partnering with the business. The fact that HR has got considerable time and attention from the CEO’s office reflects the direction.”

A knowledge-based industry like IT, where the vital resources are the human capital who work in the organisation, has seen a faster evolution of HR than perhaps any other industrial sector. Chumble points out that IT and ITeS sectors are truly “for the people-by the people-and-of the people”. “HR certainly has evolved faster in the IT and the ITeS industry. The sheer speed of growth of this industry has enabled this. Gone are the days when HR was a record keeping transaction-oriented back office, it has come out on the “board” and also in front of the customers. More customers want to meet HR heads before signing any deals,” he adds.

Hexaware employees at work

Quantifying in monetary terms

"HR is not a resource that can be treated on par with other resources and hence we may not derive too much benefit by quantifying HR functions" - V Ranganathan Managing Director BNA Technology Consulting

The question is: Is it necessary to quantify the impact of people management functions into dollars/rupees? There are differing responses to this question. Many experts believe that HR should be quantifiable and result-based, others disagree. Some of them concede that HR which puts quantifiable data on the table can make its points stronger and be understood by the rest of the organisation. “It is a known fact that anything that cannot be quantified cannot sustain for long in a profit-making organisation. Thus it is necessary to measure each individual’s performance to quantify personal growth. It instills clear accountability in people management functions,” states Chumble.

Ranganathan acknowledges that an exercise to quantify in terms of dollars or rupees would be useful, if this can also be considered to be a resource that can be optimised using standard tools. He however adds that HR is not a resource that can be treated on par with other resources and hence we may not derive too much benefit by quantifying HR functions.

Kulkarni albeit insists that one always cannot quantify in dollar terms. He points out that while the HR metrics and measurement can provide a direction, the intangible benefits accrued can demonstrate the healthy and vibrant organisation—HR is a great contributor in this.

A strategic business partner

In the IT industry, the HR is already a strategic business partner and its impact will be greater in the near future. The widening gap between the demand and supply of talent, accentuated by the shortage of specific skills and vast employment opportunities will ensure this.

Agrees Chumble, “There cannot be more significant times for HR than now and in the foreseeable future. HR shall continue to remain a strategic business partner by literally moving out ‘transactional’ HR to outsource vendors.” He adds that any organisation has several key pillars like sales, marketing, etc. But HR remains to be the foundation that supports all these pillars in creating a powerful organisation. “So while most organisations perceive these pillars to impact the business growth, I feel the time has come for HR to be a dominant decision-factor.”

Benefits to the industry

The increasing importance of HR in the decision-making processes in an organisation, has long-term benefits for a company as well as the industry. It will be easier to counter the human capital issues which pose the greatest challenges to the industry.

Kulkarni explains, “It will benefit in many ways—right from getting the right talent on board to business growth and scale up with right people in right slots. The organisation will gain from sustainable growth and the IT industry will be benefited by higher contribution in GDP and sectoral growth.”

It will bring about an environment where every line manager will be a substitute for an HR functionary. Chumble points out that the right processes set by HR can empower line managers to take right decisions related to their people and their careers. “I guess the ultimate test of successful HR would be when employees are absolutely comfortable with their respective supervisors. So HR has the task of transforming all the line managers into HR professionals,” he says, adding that such an organisation will be well-synchronised and a highly motivated company which can blend the personal goals of all employees and the organisational goals, beautifully. The benefit, to say the least will be immense.

Change in the mindset

It needs a change in the mindset of both HR professionals as well as how an organisation perceives the HR function. This change has already started happening fast. “However a lot of industries are shy of giving HR heads the strategic business decision powers,” states Chumble. He is however optimistic that times are not far when HR chiefs with sound business understanding will manage the show.

As Kulkarni aptly concludes, “Going forward, there will be only one mindset and that is the business mindset. All functions will embrace the business.”

ec@expresscomputeronline.com