The Rebirth of HR: HR Will Begin Reinventing Itself to Lead These Efforts

December 10, 2020      By Karina Schultheis

Ultimate Takeaway
  • The events of 2020 highlighted the impact and innovative potential of HR departments.
  • A panel of senior executives estimated that 72% of their company’s value was directly attributed to their employees—demonstrating a shift in perspective of employees as primary stakeholders.
  • Technology design to support business outcomes will also increasingly prioritize supporting people as a means to achieve that goal.

For several decades, HR has been fighting the stereotype of technically incompetent, soft-spoken corporate enforcers (aka: Toby, from The Office). Despite the proliferation of savvy, effective, data-driven HR teams actively reimagining everything from performance management to corporate culture, a 2019 KPMG study found that three in five HR executives believed that the HR function was rapidly becoming irrelevant, and that HR desperately needed to modernize its approach to avoid becoming automated.

In 2020, COVID-19 and societal unrest elevated the HR function to mission-critical and underscored the importance of human intellect in people management. Companies are leaning on CHROs and CPOs to lead the pandemic response and shape growth strategy while keeping employees engaged, reconfiguring workflows, redeploying talent, and upskilling staff.

Indeed, well-resourced HR teams that successfully managed the transition to a hybrid workplace are now a top competitive advantage for companies in every sector. Just as CFOs’ roles were elevated following the 2008 financial crisis, 2020 will go down in history as the year HR’s impact and innovative potential was fully realized: Strategic, tactical people advocates driving tangible business results.

Embracing the shifting nature and language of HR

No other field combines the powerful skills of process champions (workforce continuity, automating processes, compliance) and people scientists (understanding, predicting, and responding to and/or changing human behavior). Yet, to fully realize its potential, HR must change its nature and language. Rather than treating people like “human capital” and “measuring performance”, leaders must treat people as people and support their overall passions, contributions, and potential. We must rethink what it means to be “qualified”, challenge the status quo, and find ways to be fair and equitable in a world where there is no equal footing nor one-size-fits-all handbook.

People as primary stakeholders

As organizations adapt to putting people before profits, it should be overwhelmingly clear that the most important stakeholders in any organization are its people. In fact, in October 2019, a panel of 600 senior executives estimated that 72% of their company’s value was directly attributed to their employees. Rather than treating people as a resource—something to be managed, to extract value from, a commodity—today’s organizations and HR leaders must put their people at the center of their purpose. Employees have the single greatest impact on the organization at any given time, and they should be respected and treated as such.

For all intents and purposes, HR should be leading these efforts. As technology continues to automate manual processes, HR has the opportunity—rather, the obligation—to focus primarily on serving and enabling their people through meaningful strategic initiatives like well-being and long-term growth and development. It’s time to think differently about people, about their relationships and their impact on organizations, and ensure we’re creating the right conditions that allow our people to thrive.

Consider, for example, a 2020 McKinsey & Company study designed to evaluate employee well-being and work effectiveness during COVID-19. Ten employee experience elements accounted for approximately 60% of the differences in outcomes. In addition to basic human needs, such as safety and security, the key drivers observed were trusting relationships, social cohesion, and individual purpose. If HR doesn’t prioritize enabling these drivers across every level of the organization, who will? And who really stands to lose the most if they don’t?

The evolving role of technology

Thoughtfully-applied technology will continue to play an important role as HR functions begin to shift their focus back to their people. The foundational levels of safety and security are still important, and employees and leaders alike will continue to expect convenience, speed, and accuracy from HR processes. Many emerging technologies are capitalizing on these changes by offering scalable solutions designed to truly serve employees, such as easing financial strain, improving mental health through charitable giving, or keeping a pulse on employee sentiment so leaders can act on the topics that matter most to their people.

Today’s employees desire—and deserve—much more out of work than a paycheck. HR departments, armed with innovative workplace technologies and a renewed focus on supporting people, have never been more empowered to shift from a transactional to a transformational employer-employee relationship.

The result? A diverse, engaged, and empowered workforce that’s agile, flexible, and responsive to changing business demands.

If 2020 has taught us anything, it’s that we need more of that.

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