Historic opportunity for HR to lead

Key areas where HR needs to play its part:

1. 1. Culture Champions.: Building a more entrepreneurial and agile culture is a key requirement for enterprises to succeed in the digital age. HR needs to play the role of culture champions, working closely with the CEO to define the underlying values, embed them in all the processes, and ensure they are followed consistently, especially in times of crisis (‘moments of truth’).
   2. Organization redesign: There are many forces at work impacting organizational design in the digital age. There is the pressure to move towards simplification to drive speed, the need to develop and manage a global delivery model, to create an extended enterprise that includes a variety of partners and stakeholders, and finally, to manage an increasing proportion of work done virtually (accelerated dramatically by the Covid-19 pandemic). HR has to bring science and method to this organizational design process, balancing the often-conflicting requirements.
   3. Learning Reboot: The scope and importance of learning have manifold dimensions in this digital age. In addition, the methods and technologies involved in learning are going through a complete transformation. At the same time, it is not easy to establish ROI for learning initiatives. HR leaders need to drive an upgrade of the learning function while ensuring it is well anchored to the organizational and business objectives.
   4. New talent acquisition: One of the key requirements of the digital age is for every organization to build a technology DNA. This, coupled with the fast pace of technology changes, means that acquisition of high-quality tech talent is a priority for most enterprises. The increasing requirements of diversity adds another dimension to talent acquisition. Talent sourcing, which has historically been an execution-oriented function, is now a strategic, mission-critical capability.
   5. Employee engagement. Historically, enterprises have talked about being ‘customer-centric’. My view is that in the digital age enterprises need to have a dual mission – to become both ‘customer-centric’ and ‘employee-centric’. The expectations, the new workforce – millennials, technology talent, knowledge workers – have of the organization are also very different from before. Plus, many digital natives have set the bar very high in the matter of employee engagement. This means HR needs to be very creative and purposeful in engaging employees across their life cycle.
   6. Leadership development. The VUCA world we are living in puts immense pressure on enterprise leaders. They need to navigate the enterprise through immense change; they have to step up their own game on many fronts; and they have to be resilient to absorb the knocks they will inevitably face in such an uncertain environment. HR needs to play counsellor to the leaders and also be a connector, helping the team come together.

HR not able to keep pace

As things stand, HR works with multiple handicaps and is struggling to keep pace with developments in the environment. It is on the back foot on many fronts. There is a negative cycle of mindsets/ processes/capabilities falling short, leading to perception issues, which makes it even more difficult for the enterprise to attract top- notch talent:

• • Legacy mindsets: The traditional orientation in HR is a command-and-control model; it tries to exercise control and focuses on compliance of organizational processes. This might not appeal to the knowledge worker who is looking for greater autonomy and flexibility.
  • Heavy processes and systems: HR systems and processes face a couple of unique problems:
    • Traditional models and frameworks which are inflexible and clunky and difficult to apply seamlessly in the rapidly pivoting business environment: For example, annual goals and KPIs may not make sense when priorities are shifting every few months. There is an urgent need to recast performance management systems (PMS) and HR systems because their current construct is limiting for fast-moving organizations.
    • Regulatory limitations, which require manual interventions, coupled with archaic labour laws: These need to be adapted to the changing needs of businesses.
    • Most organizations haven’t even started to review their processes to address contract worker experience.

• Limited leverage of analytics and technology: Employees are the most valuable and critical of resources of the enterprise. Most HR functions don’t spend sufficient time and resources on talent analytics. Even if they do, the effort is sub-par, for the following reasons:
  • Shift in mindset required: The reporting metrics need to shift from proving that the function is working efficiently to focusing on information that will be relevant to help the business/function perform better or take better decisions.
  • Better technologies and models are required to help consolidate the data flowing in from various employee touchpoints: Many HR-focused start-ups have been coming up, especially in sentiment analysis and virtual chatbots. However, there is a long way to go for these technologies to be leveraged properly.
  • Finally, HR must develop the skills to go beyond reporting data to using analytics for forward-looking projections: For example, they can make projections on attrition or use data to identify employee issues, or interpret data for pattern-recognition for other purposes, for which business context is required.
• HR talent DNA and capabilities falling short: For this reason, HR talent is often not able to connect with business leaders as peers. Relationships often regress into order-taking on the part of HR. Currently, there are three key gaps in HR capabilities:
  • Follower-versus-change agent orientation – Historically viewed as a support function, HR is something many firms choose to compromise on when it comes to costs and hiring high-quality talent. As a result, the typical HR team consists of individuals who are probably good doers but will not demonstrate a contrarian point of view, instead tending to execute without questioning.
  • Limited investment – Some firms go half-way, with a view to spending the necessary dollars on hiring the right HR leaders, but make cost trade-offs at junior levels, which again delivers limited results because the leaders’ impact will come to a grinding halt over time because of their inability to delegate.
• Poor speed and bias for action: HR teams often do not keep pace with the business expectations. To address this, the HR team has to step out of the mindset of measuring impact in terms of the effort put in rather than from the perspective of actual business outcomes.
• HR often taken for granted: This is an issue of perception. Often the HR function is taken for granted. A lot of good work done by the function is not fully appreciated. Even if it has a ‘seat at the table’, HR is treated as a support function. This leads to lack of motivation among the team, making it difficult for the function to attract top-notch talent.