The changing role of HR in business | SupportBiz

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The changing role of HR in business

Do you remember what Henry Ford said decades ago? “You can take my factories and burn up my buildings, but give me my people and I’ll build the business right back again.” Isn’t this single statement enough to indicate the role of HR in the business environment?

The significance of HR in business units has only increased multifold over time.

The role of HR has always been important, across the many phases of transition from the days of labour relations to employee relations to personnel management to HR. With an incredible number of pressures on today's organizations - like increasing globalization, rapid technological changes, tougher competition, and changes in organizational structures and workforces - HR plays a critical role in helping organizations navigate through these challenges.

While capital and cash flows were always important and continue to remain so, brand, technology and intellectual capital have become the new measures of success. The role of HR has also changed accordingly.  Notwithstanding the basic role of managing the people chain – find-nurture-retain - HR today has a very important role of enhancing organizational effectiveness.

It is becoming increasingly important for HR professionals to move up from the day-to-day operational level to the role of change agent and strategic partner. It may be perfectly alright for HR to focus on aligning employee-oriented processes, but what they need to ask themselves is the very purpose of this exercise… and the answer is very clear – Whatever does not make business sense, cannot make HR sense! It is critical for an HR manager to understand business and what drives it.

Who needs HR for transactional functions? These can be much better performed by automated systems, with much higher levels of speed and accuracy.

The traditional role of HR professionals in many organizations has been to serve as the policing arm of management. It was believed that the HR function was there solely to serve the management. The changeover from personnel management to HR management saw many HR professionals projecting themselves as the ‘people advocate’. The role of HR managers today is a fine balancing between these two extremes, thus becoming a consultative business partner.

For instance, while HR is responsible for ensure that good people are adequately rewarded, more important is the realization that the rewards must come out of earnings. A firm’s Performance Management System must be able to measure human capital’s contribution to business performance.  To repeat, whatever does not make business sense, cannot make HR sense.

HR has to be an avid influencer, which is possible only by adding value, since the bottom line is that it is impact and not intention that matters.  The answer lies in HR making a measurable difference in the organization, towards achieving its business goals.

By maintaining a focus on visible emerging trends and anticipating future ones, HR must be able to evaluate the likely impact of these changes on an organization's people, processes and business. Its focus should be to work with the business as a strategic business partner, to help it remain ahead of the curve and not behind it.


Ashok Grover is the Director of a resource development and consulting firm, Skillscape.