In business, change is the only constant so how do you develop systems that guarantee success?
It's not about the latest tech gadget, a groundbreaking product, or even a disruptive business model. It's about the very essence of every organization - its people.
And this is how you succeed as a people's people, an HR in driving stronger performance on business-critical priorities.
"Human Resources isn't a thing we do. It's the thing that runs our business," remarked Steve Wynne, the renowned entrepreneur.
1. HR's central role in shaping business outcomes
In an age where companies are recognized not just by their financial performance but by their societal impact, the role of HR is more pivotal than ever.
A single decision in the HR department can shift an entire organization’s way forward, influencing productivity, morale, and the bottom line. But with such high stakes, how do HR professionals navigate the challenges of talent acquisition, retention, and management? How do they ensure that amidst the clamor for profits, the human element remains front and center?
We'll delve into the nuances, challenges, and opportunities that lie ahead for HR professionals and the organizations they serve. In the end, businesses don't succeed; people do.
2. Purpose, Value, And Culture
There should be more to an organization than just profiting off its customers. How does an organization have a unique, positive impact on society? What’s the purpose of a company?
Purpose, value, and culture lay the foundation of what an organization aspires to be.
Every company, regardless of its size or industry, exists for a reason. This core reason, often termed as its 'purpose', is not just about profit margins or market shares. It's about the unique, positive impact the company aims to make in society.
Imagine a world where every business operates solely for profit, with no regard for societal impact or ethical considerations. Such a world would be devoid of innovation, empathy, and, most importantly, purpose.
Purpose is the compass that guides a company's decisions, actions, and vision. It's the driving force that motivates employees to come to work every day, inspired and ready to contribute to a larger cause.
People don't buy what you do; they buy why you do it - Simon Sinek
But how does one define this purpose? It's rooted in the company's values—a set of principles and beliefs that shape its culture and operations.
Culture, on the other hand, is the manifestation of the company values. It's the environment in which employees work, the ethos they imbibe, and the behaviors they exhibit.
A strong, positive culture fosters collaboration, innovation, and a sense of belonging. It's where employees feel valued, heard, and empowered connected by similar values working towards a common purpose.
Companies need to articulate their 'why'—their core reason for being—and ensure that it resonates with every stakeholder, from employees to customers. Wanna know about our ‘why’ at Vesume? It’s here!
There are little things that differentiate a good company from a great one. And these are what attract top, drive innovation, foster collaboration, and ensure long-term sustainability.
3. Talent shortage
People want jobs and when you see job posts getting 100+, in some cases 1000+ applicants you might believe labor shortage isn't a real problem.
HRs who've been building corporations of the future know “failure to attract and retain top talent” is not as uncommon as one would like to believe.
The Conference Board 2023 C-Suite Outlook survey ranks “attracting and retaining top talent” first in the list of focus areas for CEOs in 2023. In this period of downturn CEOs are betting on innovation, technology and talent to drive growth.
The older more experienced individuals usually hold complex and sophisticated positions for a long time. As they retire, finding someone as skillful isn’t easy.
True talent is hard to come by 82 percent of companies don’t believe they recruit highly talented people. For companies that do, only 7 percent think they can keep it. (McKinsey)
So have you been lucky and got someone talented? What are you doing next to retain them? Counting on luck to see if they'll stay isn't a foolproof business strategy.
4. Talent allocation
According to Mckinsey, organizations that can reallocate talent as required and where required are more than twice as likely to outperform their peers. This is largely because the ability to swiftly move talent to high-priority areas enables companies to adapt quickly to market changes, capitalize on new opportunities, and stay ahead of competitors
Traditionally, roles were defined by hierarchy, and talent was often a secondary consideration. The best talent needs to be reallocated to roles that handle business critical priorities. Having to climb the long never-ending corporate ladder kills talent.
As an HR, measure employee capability and make sure they're somewhat challenged by the work they do. The challenge should be about acquiring a new skill or mastering what they've known. Inducing stress, impossible deadlines etc isn't what you want to challenge them with.
Consider the tech giants, Tesla and Apple. Tesla's relentless pursuit of fast-paced innovation and Apple's unwavering commitment to user experience are not just corporate strategies; they are deeply ingrained cultural priorities. And at the heart of these priorities are roles, often related to Research & Development, filled with immensely talented and creative individuals. These roles, driven by top talent, are instrumental in translating the company's value agenda into tangible outcomes.
This demands a disciplined approach, a keen understanding of where the organization truly creates value, and how top talent can amplify this value creation.
5. Bridging the skills gap
Because many roles are becoming disaggregated and fluid, work will increasingly be defined in terms of skills.
The accelerating pace of technological change is widening skill gaps, making them more common and quick to develop.
According to a 2018 McKinsey survey, 66 percent of executives said that “addressing potential skills gaps related to automation/digitization” within their workforces was at least a “top ten priority.” HR should help prioritize these talent shifts.
In a more recent survey McKinsey conducted with global executives about the post pandemic workforce, more than a third of respondents said that their organizations were unprepared to address the skill gaps exacerbated by automation and digitization. The shift to digitization has accelerated during the pandemic: 85 percent of companies have picked up the pace of their digitization (including a 48 percent rise in the digitization of customer channels).
To survive and deliver on their strategic objectives, all organizations will need to reskill and upskill significant portions of their workforce over the next ten years.
6. Employee wellbeing and motivation
Employee burnout is a real and a pressing issue.
According to a Forbes article, employee burnout is the "biggest workplace challenge" of our time. A Deloitte survey reveals that 77% of workers have experienced burnout at their current job. That's more than three-quarters of the workforce feeling overwhelmed, undervalued, and on the brink of exhaustion.
But why should companies care? Well, apart from the moral obligation to ensure the well-being of their employees, there's a financial incentive too. McKinsey reports that workplace stress adversely affects productivity, drives up voluntary turnover, and costs US employers nearly $200 billion every year in healthcare costs. That's a hefty price to pay for neglecting employee well-being.
It’s not a hard problem to solve. It starts with recognizing the signs of burnout and addressing them head-on. As an HR you bridge the employees and the management, ensuring that the former's concerns are heard and addressed. By implementing well-being initiatives and fostering a culture of open communication, companies can combat burnout effectively.
And it's about good leadership not policies and politics. 89% of employees at companies that support well-being initiatives are likely to recommend their organization as a good place to work.
7. Overpromising and under delivering
Expectations are high. Companies promise growth, innovation, and transformation. HR plays a key role in delivering on those promises.
“Talent is consistently ranked as a top three priority for CEOs, yet many lack confidence in HR’s ability to deliver.” -McKinsey, 2021
Why is this gap between promise and delivery so prevalent in HR?
HR departments are overburdened!
The 2022-2023 SHRM State of the Workplace Report revealed that 70% of HR professionals say they’re working beyond capacity, and 61% report working without enough staff.
Wouldn't it be better if there were tools and resources at HR's disposal?
36% of HR leaders admit they don't have the resources to recruit top talent. Without the right tools and technology, even the most well-intentioned HR departments can falter.
Vesume understands the pressure HR departments are under. We're doing our part by perfecting asynchronous interviews and reimagining the way job applicants get opportunities. By using technology, we aim to make recruitment faster, easier, and yet more human.
But are companies ready to equip HR with the tools, technology, and training needed to bridge the gap between promise and delivery?
80% of businesses use HR software, 36% of HR professionals still feel they lack adequate technology. HR needs to evolve, for businesses to invest in their people, and for organizations to bridge the gap between what's promised and what's delivered.
In the words of Richard Branson, "Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients."
8. A rapidly changing workforce
A workplace will always be about its people. It's about individuals who resonate with the core values of the company they work for - values like integrity, respect, professionalism, innovation, and commitment.
Imagine working for an organization that mirrors your own values. It's not just about a paycheck; it's about being part of something bigger, something that aligns with your personal beliefs and aspirations.
This is the kind of workplace that many of us dream of, and it's the kind of workplace that the future promises.
What’s next?
Only 30% of HR leaders believe their current structure allows them to adapt to global challenges. Yet, the future demands adaptability and flexibility. The question is, are we ready to rise to the occasion?
Tech has transformed every field. How do we ensure that technology, which is driving much of this change, aligns?
Technology that holds onto these values while making HR better is what's needed.
One of the key activities progressive CHROs focus on is reinventing the HRBP Role. They aim to transform senior-level HR business partners into strategic talent leaders, shifting away from transactional tasks and focusing more on analytical and strategic responsibilities.