Earlier, companies believed that there was only a need for a single HR person for every 50 to 100 employees (based on industry), but now organizations are searching for better options. Technology is providing efficient solutions to all transaction-related HR issues (which 50 to 60 % of HR staff performed earlier) & this one-time cost is being capitalized in certain cases. While HR staff keeps changing from one company to another, the automated systems provide the desired continuity. The HR department may, therefore, be needed more for human related problems, legal issues, and welfare measures etc, which require face to face interaction. The Line Managers are rightfully assuming a bigger role in people management, with online information readily available on teams & subordinates.
In brief, HR outsourcing & HR technology platforms tend to be more cost effective for all organizations and is slowly replacing the previous concept of using a huge HR staff. Trained HR professionals may thus have to graduate to new roles such as HR analyst, business analysts, system implementation specialists and so on.
What do CEOs think?
The new breed of CEOs, in their early to mid forties, look at managing talent as their personal role. They are convinced that all initiatives, aimed at business growth, require better management of key human resources. All they need is some data points on HR, in the same manner as Finance & Operations. Some of their thoughts that I could gather during a conference, are summarized below:
• Maintaining employee records/personal files, preparing MIS on HR, managing various HR processes and ensuring statutory compliance are some of the outdated roles in HR today. There is software with the capability of performing all these functions today, with better accuracy & in a timelier manner. CEOs want to view information, down to its source, in their own time & draw their own conclusions about developing people in my company.
• CEOs maintain that employees are perfectly capable of creating & updating their personal data. HR merely validates some data, before the database gets updated as career documents are scanned & uploaded automatically onto the database.
• CEOs want employees to believe that all HR transactions are completely transparent and objective. The focus is to create a loyal workforce and CEOs do not see how a qualified HR resource fits in his/her business setup.
• It is typically thought that HR is only needed to deal with labour disputes & manage employee unions.
• CEOs are uncomfortable expanding the HR department when it means recurring and increasing costs every year
What then is the new role for HR professionals?
Taking clues from the above inputs, it may be worthwhile debating what HR professionals offer to the new breed of CEOs who will soon move to manage bigger establishments. You can’t change their mind set, they have successfully managed small organizations and have a flair for the use of technology to manage people.
My own views about the new role of HR includes:
1. Manpower Planning: All businesses, at all times, will look for higher revenue per employee and lower manpower cost. This will mean HR needs to focus on ‘job enrichment’, redefining ‘job roles’ and re-writing ‘job descriptions’. So manpower planning, for growing businesses, shall be a persistent challenge.
2. Review of Skills & Competencies: Along with job enrichment, the skills & competencies required to manage new jobs would also need review. Doing it internally, rather than outsourcing to consultants, could be the future role of HR.
3. Training, Development & Evaluation: HR will require designing of programs to develop new skills & competencies. Also they will need to define the scales/ yardsticks to objectively evaluate employees for each of the competencies & skills applicable to them.
4. Alignment of employees to corporate objectives: This will tend to be an important role, for which HR may have to make use of tools like Balanced Score Card & spread awareness across the company. Helping line managers set the goals for subordinates & develop KPIs to monitor performance shall be a key HR role.
5. Career management: Defining the career path for an employee in any job position shall help in arresting attrition, an issue affecting most organizations.
6. Managing IR: In labour intensive organizations (manufacturing, infrastructure development etc.), Industrial Relations (IR) shall continue to be an important role for HR personnel.
7. HR systems Configuration: Small companies will need HR executives who can configure the ‘User Configurable HR Software’ solutions now available in the market, deploy these solutions & train employees to use these.
Will these roles be taken up by mainstream HR professionals or specialists? Will the management institutions realign their curriculum to prepare HR people to meet these needs? These are some of the questions which we need to debate.