 "Defining the new role of HR leaders")
Cary Cooper, distinguished professor of organisational psychology and health at Lancaster University Management School, ranked as the most influential UK thinker in the 2014 HR Most Influential (HRMI) rankings, recently commented that HR directors have less influence now than they did a few years ago, and called for a campaign for a qualified HR director on every board. His comments follow a clutch of surveys that suggest that HR is fighting to exert influence at the highest level (Hewitt) and that stress levels in HR executives could result from the fact that they don't manage to turn things around the way they should be able to for company employees.
Is this trend a result of the protracted slowdown? The Strategist speaks to experts to find out if HR's influence is indeed on the wane and what could the function do to regain strategic importance
Like any other role, the HR director's role and its nuances keep changing in line with dynamic business realities, driven by factors external to an organisation and by internal factors such as business strategy, employee demographics, organisation structure and so on. It is natural, therefore, for an HR director's attention to move from some priorities to the others, as the operating and strategic environment change. Given the centrality of talent issues and the leadership development needs that organisations have, more so in growing economies such as India and China, the HR role is central to delivering business strategy through talent initiatives.
With growing pressures of external scrutiny and regulatory complexity, the top leadership of any business needs a reliable sounding board. Thus, a competent HR director is valuable if she stays connected to the CEO and the top leadership team. Different HR directors play this role differently. Some are more aggressive and reach out to the business leaders on their own, while others are reticent and wait for the client group to seek their inputs. Both styles can be equally effective depending on the CEO and the leadership team's expectation from the HR director.
Issues relating to an organisation's values, corporate ethics, and corporate social responsibility occupy central position in the way organisations interact with the larger context. These have led to the rise of many internal institutions, both at the operating and the governance levels, such as Ethics Committee, Whistleblower Policy, CSR Committee at the Board level and so on. These developments have lately accentuated the HR director's role in shaping an organisation's culture to such an extent that one can argue that the real and potential opportunity for the HR director to influence critical aspects of the organisation has actually grown.
Some thinkers such as Professor Ram Charan have argued that HR directors may be either drawn from 'line' functions or their role may be split to enable some part of the HR director's role to be merged with that of the CFO. At one level, this may be seen as a criticism of the way CHROs play their roles. However, I see it more as a call for CHROs to engage with the business and acquire newer skill sets. It doesn't imply that the influence of the HR director is diminishing; rather they seem to be an acknowledgement of the criticality of CHRO's role. While a CHRO has the responsibility of setting the HR agenda of the organisation in collaboration with the CEO and the Board, very often the CHRO's role is defined by the expectation set by the company's top leaders.
Any research that analyses the CHRO's goals across organisations would reveal a qualitative difference in the expectations from the role. Our debates and discussions must, therefore, focus on how to enhance the CHRO's capability and derive more out of this unique and significant role, than analyse whether the influence of the role has diminished. It would be natural to expect that some roles will play a more active role in a particular stage of the organisation's development than others. Roles such as the chief risk officer or the chief sustainability officer seem to be more visible today than ever before.
India is a growing economy, and businesses need quality talent across all levels and competent business leaders who are adept at not just running businesses but also growing the business in a competitive environment. As the market grows rapidly we will require both, several more new employees and business leaders. This is where the role of HR leaders becomes critical as they step in to become key decision makers in companies. However, there's a bigger issue to be addressed: the lack of enough HR leaders who can strategise and meet the demands of businesses. Rapid growth, indeed, creates leadership challenges for HR itself as the pool of such leaders is small.
That said, HR's influence on company Boards is high and it is growing in India. A leading item on the Board agenda is high quality talent acquisition. Compensation and benefits strategies, too, occupy a good part of deliberations. High wage inflation over the last 10 years has made sure that compensation and benefits are having a much bigger share of value added and, therefore, there is more impact on the bottom line.
Developing high quality operating leaders at the middle level is becoming a critical activity because of growth, severe competition and globalisation. As Indian companies globalise, the need for global talent becomes acute. Companies also need a core set of people who can be groomed for global leadership positions - these exercises need HR intervention.
Across companies in India, CEOs are becoming younger. Over the last 20 years, rapid growth has created a shortage of people who could lead companies. Companies are giving greater responsibility to their managers at an earlier age. They are being pushed into leadership positions earlier leading to severe stress in the system. HR has an additional task of accelerated leadership development, retention of potential leaders and acquisition of leaders from outside. Additionally, boards are focused on leadership development and succession planning for sustained business performance, thus, making HR's role core to business strategy. Companies realise HR is actually the base on which businesses can be built.
No surprise then, companies realise that paying greater attention to HR, listening to HR leaders and building a good HR strategy can reduce risk and offer companies success. Thus, an increasing number of companies are now having executive directors on boards with strong HR background. This augurs well for the profession.
While there are many drivers and levers to improve business and the economy, there are very few that focus on building business-ready talent. For long, human resources (HR) leaders and their teams have been the agents of change leading the cultural and skill transformation in organisations. At this juncture, when Indian economy is at an inflection point and corporate India is gearing up for the next era of growth, the HR function has a significant role to play. Additionally, this function has evolved to adapt to a rapidly changing employee profile, nature of work and dynamic business environment while staying connected with employees.
The current workplace is a confluence of Gen X-Y-Z and virtual collaboration is becoming a reality. In a recent survey by Randstad India, a resounding 91 per cent of the current and prospective Indian employees viewed the impact of technology as an opportunity and 65 per cent said that they would change jobs for career growth and advancement, over compensation. Moreover, gender preferences, too, vary between employees. Thus, the parameters of job satisfaction are changing all across. Employers are bringing work to the talent instead of bringing the talent to the workplace, replacing traditional office spaces. With big data emerging as the goldmine of information, HR needs to embrace this and review the metrics of measuring success.
The HR function is the custodian of the employer brand and the employee value proposition. It is what connects the company's promise and the actual employment experience. Finally, HR should create talent architecture for the organisation that can maximise the potential of both employees and the flexi workforce.
Thus, an HR leader's role today includes donning IT and marketing hats to leverage various digital platforms for talent acquisition, employee engagement, learning and development, etc. The role of HR, thus, is not diminishing. It is evolving into something much stronger that is poised to bring in a wave of transformation to usher in a new workplace era.
Is this trend a result of the protracted slowdown? The Strategist speaks to experts to find out if HR's influence is indeed on the wane and what could the function do to regain strategic importance
Like any other role, the HR director's role and its nuances keep changing in line with dynamic business realities, driven by factors external to an organisation and by internal factors such as business strategy, employee demographics, organisation structure and so on. It is natural, therefore, for an HR director's attention to move from some priorities to the others, as the operating and strategic environment change. Given the centrality of talent issues and the leadership development needs that organisations have, more so in growing economies such as India and China, the HR role is central to delivering business strategy through talent initiatives.
With growing pressures of external scrutiny and regulatory complexity, the top leadership of any business needs a reliable sounding board. Thus, a competent HR director is valuable if she stays connected to the CEO and the top leadership team. Different HR directors play this role differently. Some are more aggressive and reach out to the business leaders on their own, while others are reticent and wait for the client group to seek their inputs. Both styles can be equally effective depending on the CEO and the leadership team's expectation from the HR director.
Issues relating to an organisation's values, corporate ethics, and corporate social responsibility occupy central position in the way organisations interact with the larger context. These have led to the rise of many internal institutions, both at the operating and the governance levels, such as Ethics Committee, Whistleblower Policy, CSR Committee at the Board level and so on. These developments have lately accentuated the HR director's role in shaping an organisation's culture to such an extent that one can argue that the real and potential opportunity for the HR director to influence critical aspects of the organisation has actually grown.
Some thinkers such as Professor Ram Charan have argued that HR directors may be either drawn from 'line' functions or their role may be split to enable some part of the HR director's role to be merged with that of the CFO. At one level, this may be seen as a criticism of the way CHROs play their roles. However, I see it more as a call for CHROs to engage with the business and acquire newer skill sets. It doesn't imply that the influence of the HR director is diminishing; rather they seem to be an acknowledgement of the criticality of CHRO's role. While a CHRO has the responsibility of setting the HR agenda of the organisation in collaboration with the CEO and the Board, very often the CHRO's role is defined by the expectation set by the company's top leaders.
Any research that analyses the CHRO's goals across organisations would reveal a qualitative difference in the expectations from the role. Our debates and discussions must, therefore, focus on how to enhance the CHRO's capability and derive more out of this unique and significant role, than analyse whether the influence of the role has diminished. It would be natural to expect that some roles will play a more active role in a particular stage of the organisation's development than others. Roles such as the chief risk officer or the chief sustainability officer seem to be more visible today than ever before.
Santrupt Misra
CEO, Carbon Black Business & Director, Group HR, Aditya Birla Group
CEO, Carbon Black Business & Director, Group HR, Aditya Birla Group
India is a growing economy, and businesses need quality talent across all levels and competent business leaders who are adept at not just running businesses but also growing the business in a competitive environment. As the market grows rapidly we will require both, several more new employees and business leaders. This is where the role of HR leaders becomes critical as they step in to become key decision makers in companies. However, there's a bigger issue to be addressed: the lack of enough HR leaders who can strategise and meet the demands of businesses. Rapid growth, indeed, creates leadership challenges for HR itself as the pool of such leaders is small.
That said, HR's influence on company Boards is high and it is growing in India. A leading item on the Board agenda is high quality talent acquisition. Compensation and benefits strategies, too, occupy a good part of deliberations. High wage inflation over the last 10 years has made sure that compensation and benefits are having a much bigger share of value added and, therefore, there is more impact on the bottom line.
Developing high quality operating leaders at the middle level is becoming a critical activity because of growth, severe competition and globalisation. As Indian companies globalise, the need for global talent becomes acute. Companies also need a core set of people who can be groomed for global leadership positions - these exercises need HR intervention.
Across companies in India, CEOs are becoming younger. Over the last 20 years, rapid growth has created a shortage of people who could lead companies. Companies are giving greater responsibility to their managers at an earlier age. They are being pushed into leadership positions earlier leading to severe stress in the system. HR has an additional task of accelerated leadership development, retention of potential leaders and acquisition of leaders from outside. Additionally, boards are focused on leadership development and succession planning for sustained business performance, thus, making HR's role core to business strategy. Companies realise HR is actually the base on which businesses can be built.
No surprise then, companies realise that paying greater attention to HR, listening to HR leaders and building a good HR strategy can reduce risk and offer companies success. Thus, an increasing number of companies are now having executive directors on boards with strong HR background. This augurs well for the profession.
TV Mohandas Pai
Chairman, Aarin Capital Partners
Chairman, Aarin Capital Partners
While there are many drivers and levers to improve business and the economy, there are very few that focus on building business-ready talent. For long, human resources (HR) leaders and their teams have been the agents of change leading the cultural and skill transformation in organisations. At this juncture, when Indian economy is at an inflection point and corporate India is gearing up for the next era of growth, the HR function has a significant role to play. Additionally, this function has evolved to adapt to a rapidly changing employee profile, nature of work and dynamic business environment while staying connected with employees.
The current workplace is a confluence of Gen X-Y-Z and virtual collaboration is becoming a reality. In a recent survey by Randstad India, a resounding 91 per cent of the current and prospective Indian employees viewed the impact of technology as an opportunity and 65 per cent said that they would change jobs for career growth and advancement, over compensation. Moreover, gender preferences, too, vary between employees. Thus, the parameters of job satisfaction are changing all across. Employers are bringing work to the talent instead of bringing the talent to the workplace, replacing traditional office spaces. With big data emerging as the goldmine of information, HR needs to embrace this and review the metrics of measuring success.
The HR function is the custodian of the employer brand and the employee value proposition. It is what connects the company's promise and the actual employment experience. Finally, HR should create talent architecture for the organisation that can maximise the potential of both employees and the flexi workforce.
Thus, an HR leader's role today includes donning IT and marketing hats to leverage various digital platforms for talent acquisition, employee engagement, learning and development, etc. The role of HR, thus, is not diminishing. It is evolving into something much stronger that is poised to bring in a wave of transformation to usher in a new workplace era.
Moorthy K Uppaluri
CEO, Randstad India & Sri Lanka
CEO, Randstad India & Sri Lanka