What is the purpose of HR now?

Endaba Group

Human Resources – two words that for many employees bring to mind tedious admin, obstructive directives and outmoded practices rather than vision, dynamism or strategic insight. HR is every employee’s favourite corporate punching bag, competing with IT for most-irritating function. There has recently been a parade of articles calling for HR to be “blown up”, “split in two” or “redesigned”. But what is HR now, what does its stand for and what is its purpose?

There has been a shift from what HR set out to be – Human Resources. The function has become too process driven and impersonal, with focus placed on strategy before people, transaction before cultural fit. HR has lost its ‘humanness’ and the heritage of its name.

Part of the dismal state HR finds itself in today is a hangover from the recession. With large numbers of job seekers to choose from, stagnant wages and low job security, HR lost importance – employees stayed put and worked hard regardless. In comparison, the dot-com boom of the 1990s, companies competed for hires and retention. Simultaneously, we’ve seen that many of HR’s traditional responsibilities, such as hiring and development, have been foisted to line managers, leading to a state of ‘managing with ambiguous authority’.

Geoff McDonald, ex Global Vice President of HR at Unilever, when asked how far HR needs to grow, said “how long have you got?” He believes HR needs to start by focusing on two key areas: “How do we make organisations more human?” and “have the courage to act more like Chief Integrity Officers”. Looking back, the founding principle of many great organisations, like Cadbury, Procter and Gamble, and Unilever, was looking after the well-being and welfare of their employees – e.g. they were housed, educated and developed. These organisations had a very strong humanness to the way in which they cared for their employees, creating a sense of belonging, respect, trust and commitment to the organisation’s values. “HR needs to think about how it can bring the humanness back to the workplace. The pendulum may have swung too much towards meeting the interests of shareholders and HR needs to play its role in ensuring that the business adds value to all stakeholders with employees a critical component thereof. In so doing, HR needs to create leaders for the world, not in the world and become more engaged in the challenges/opportunities that our anxious world faces. HR, with better understanding of these challenges/opportunities, can play its rightful role in helping businesses play a more overt and significant role in addressing them and at the same time, growing and being profitable.”

It’s a mistake for businesses to wait for another market boom before they turn their attentions back to human resources, but the onus also lies on HR departments themselves to take talent development in hand. Is it time for a re-brand, in order to meet today’s business challenges and gain back favour?

What can HR do now?

Drop the HR label – with all its negative connotations, altogether. Endaba recently advised one client to re-build and re-package HR as a ‘People’ department. Ditch traditional HR titles – instead of Head of HR and HR Directors, create ‘Chief People Officers’, ‘Heads of Talent’, ‘People Directors’. Airbnb recently redefined their HR department with the appointment of a new Global Head of Employee Experience. Zappos, who has attracted attention for its HR culture, calls their employees Rockstars!

Ditch the annual appraisal – why wait a year to air grievances and analyse performance? Forward-thinking HR departments at companies such as PwC and Netflix, for example, have abandoned these traditional appraisal systems in favour of more flexible, organic models of ongoing conversation orientated around skill development and changing business demands.

Take the reigns – HR teams should pre-empt what’s coming. This means clarifying and communicating to executives their informed point of view on people-related issues such as recruiting, flexible working and performance management.

“Know thyself” – Being able to effectively develop people stems from understanding what you’re truly in the business of – and consequently why people actually want to work for your company. This is, crucially, different to knowing what you do. Case in point: Apple could be described as a technology manufacturing business, but it is in the business of beauty, or design. Just as Google is in the business of knowledge, and Volvo of reliability, not search engines and car production. From the individual employee to a team to a whole business, every component should understand its true purpose.