HR is at the centre of it all

In a corporate world driven by underlying factors such as innovation and growth, it has become essential for companies to streamline corporate strategies in a manner that not only promotes growth but also maximum productivity within its current and future workforce.

With regard to this, no sector across the globe has undergone as high a level of streamlining than the corporate human resources sector.

Over the past decade, and specifically during the economic downturn, the HR function has become increasingly reactive, assisting business leaders in coping with the unique financial situations with which they are currently faced.

In today’s ruthless business climate, HR is left facing extraordinary demands in order to be effective, efficient and, most importantly, agile enough to address changing organisational and business realities.

In the modern HR realm, it is no longer sufficient merely to advise employees about benefits programmes or job vacancies; rather, it has reached a point whereby HR departments themselves are becoming strategic partners within the business.

Consultants vary on the precise definition of HR strategy, but most agree it is essentially stepping outside the traditional duties of a corporate HR department and developing a broader understanding of what the larger company is trying to achieve, as well as defining how functions such as recruitment and talent development can be harnessed in order to help meet these objectives.

There are numerous ways in which companies, both nationally as well as internationally, are ensuring they become more strategy focused.

Many industry leaders claim that HR professionals can acquire the requisite knowledge, skills and experience necessary from a wide variety of sources, ranging from MBA programmes to volunteer work.

With the modern corporate sphere attaching increasing emphasis on human capital (i.e. effective employees) than ever before, HR professionals are having to shift their fundamentals to co-align with this.

Numerous professionals within the field have stated that strategic HR is increasingly being called upon to measure the impact of human capital on business performance. In the past, HR was merely called upon to provide metrics whereby it was looking at people as a cost factor for the organisation or company itself; whereas today, strategists are faced with the concept of what the return on each worker within the organisation will be.

South African companies are fast realising there are fundamental guidelines that need to be adhered to when implementing effective corporate HR strategies.

These include investigating

issues such as:

• What is the market in which the company is choosing to enter?

• Who is the company’s niche customer base?

• What are the opportunities and/or threats of the company’s targeted environment?

• How does the company organise all its functions in order to compete successfully?

Starting with this end goal in mind, HR professionals can derive quantifiable reason as to why the company exists, as well as what the company is trying to achieve – a far cry from the strategies of a decade ago, whereby a business ethos of ‘increased profits by all means necessary’ was implemented.

Investigating the company structure from the top down, and asking itself how HR strategy can align all corporate objectives and energies toward accomplishing those business goals, is fast becoming the foundation in which the modern HR strategist is making a difference in not only streamlining but also the profit margins of the modern business sphere.

One of the most significant alterations and demands, with regard to a corporate strategy outlook, has been the realisation that strategic decisions tend to involve the entire business over long periods, with high-risk decisions ultimately being the difference between successful and failing companies. HR strategists need to be thinking strategically in the short- and long term, as well as expanding strategies to equate how decisions affect not only a single job or department but the organisation as a whole.

In an emerging economy such as South Africa’s, it is essential that HR policies are based on effective change and progression and, more importantly, understanding how to deal with these changes. If South Africa is to keep up with an emerging global corporate sector, it is essential that the makeup of strategies is as dynamic as their respective business environments.

Market environments change, technologies change, competitors change. In a dynamic working environment, you require a dynamic workforce; and in order to do this, companies need to ensure their HR approach is one that is set on obtaining effective employees with applicable skills in order to support the strategic objectives of the company.

Following on from events such as the Fifa Soccer World Cup, higher levels of foreign investment will be increasingly shaping South Africa’s business future, with investors increasingly measuring the impact of human capital on a company’s market value – something that will see effective HR strategists becoming increasingly essential moving forward.

Factors such as the compatibility of business teams, commitment of a brand’s workforce, as well as attrition rate are all factors that are taken into account in due diligence undertaken prior to corporate mergers and acquisitions.

It is vital that, with the setting out of an entirely dynamic HR landscape, HR professionals recognise and effectively implement their unique position within the corporate structure.

While some feel that with the current ‘strategy’ mindset with which HR professionals must align themselves as strategic thinkers in order to prove their relevance, many local industry leaders further believe HR can bring something to the strategy table that other players lack in the form of appreciating the subtleties of dealing with people, as well as developing a progressive system and environment for those individuals.

An area in which South African business has taken notable proactive steps in this regard has been the implementation of individuals with broader based experience.

Experts agree that having some form of non-HR experience on the operating side of the business is an increasingly attractive credential for a would-be HR strategist.

Analysts have proven that the problem faced at larger organisations is that often individuals tend to begin their careers within the HR sector and maintain these positions indefinitely, thereby only experiencing a single area of the organisation and being one-dimensional in their abilities.

This often leads to a scenario whereby the individual may not understand the numerous other tasks demanded of the modern HR sector, let alone how the organisation runs as a whole.

To counter this, companies are increasingly seeking HR strategists who harbour a varied working history, including that of areas such as operations, and even volunteering.

The modern corporate landscape is a shadow of its former self. HR strategists need to grasp any opportunity that will allow for interaction with other departments, divisions or even organisations.

Individuals involved in the HR strategies of a modern South African business need to realise that any opportunity that removes them from the narrow scope of daily tasks is going to assist them in developing a broader, strategic mindset and, in doing so, develop them into a significantly more effective HR strategist.

Local business leaders are swiftly coming to the realisation that if individuals are going to aid in shaping a corporate strategy, their organisations are going to need to embrace an HR strategy that is diverse, a strategy team that is multifaceted and, more essentially, one that is in touch with and actively embracing successful and proven business strategies.

Adam Currie