Since prehistoric times, the need to select and train individuals for jobs has been practiced and there have existed consistent methods for tribal leader selection. The purpose and the benefit of this selection was obvious: survival.
Arguably, the value to organisations of the initial generation of HR specialists, commonly known as personnel managers or personnel administrators, was not as apparent. These specialists were responsible for activities such as recruitment, selection, training, and salary administration, and while these tasks were performed effectively, there was little relationship between these various activities and the overall organisational objectives.
Today the current discipline of human resources management is vastly different to its ancestor personnel management. According to the European Journal of Business Management, human resources management is long-term, proactive, strategic, and integrated planning characterized by commitment; in comparison, personnel management comprises short-term, ad hoc, and marginal activities characterised by compliance.
While the need for the human resources function to transforn from transactional processor to a strategic advisor is well documented for some years now, the struggle to clearly and consistently demonstrate the link between HR practices and tangible business outcomes or measurable business benefits is why we still love to hate HR. Quite simply, when HR is reactive and administrative, HR are seen to pursue efficiency instead of value.
How can we as HR professionals change this?
The consensus says, from the top. A CFO has positional power—that is, by virtue of their position alone, people will listen, and ultimately the balance sheet is the bottom line. In comparison, HR leadership is, from my experience, where personal power still reigns supreme. The impact of HR executives who truly lead their HR organisation and set the HR agenda by focusing on the right issues to meet their specific organisation’s needs rather than on traditional HR tasks cannot be underestimated.
Mercer’s 2017 HR transformation study “How HR Needs to Change” adds to the prevailing body of HR literature that suggests HR needs to better align to business strategy and that like any other function, HR must show why the issues it addresses matter to the business and that it has ways to proactively manage them.
The study found that high-performing HR organisations leverage a centralised structure that relies on COEs, HRBPs, and HR-shared services and so suggests building HR capability by better align the HR function with business strategy, shifting transactions to HR shared services and strengthening the business advisory nature of HRBPs. The other key trait of high-performing HR organisations was insights driven via technology.
High-performing HR organisations invested in an optimal mix of technologies to procure key metrics and to drive strategic decision support and expressly delivered a consumer-level experience for both managers and employees. Even though high-performing HR organisations used far more technology than average or low performers, the study concluded that there was still room for improvement.
Is technology the missing link to support the complete evolution of HR from transactional processor to strategic advisor? Is adoption of technology the adaptation HR needs to make to not only survive, but thrive?
The study concludes that high performing HR organisations deliver more value to their business by delivering exceptional customer value, reacting proactively to disruptive change and driving innovation; and these organisations are viewed as great places to work that attract top talent that these businesses need to excel. Technology can certainly be an enabler to all the above. At SAP SuccessFactors our DNA is business execution. To learn more about how SAP SuccessFactors solutions can support your HR organisation to deliver on the promise of being a true business partner please visit our HR digital landing page.