Outlook 2013: Human resources

In today’s fast-paced marketplace, organisations need to be versatile, agile and adaptive, and it is talented people that ensure that a business is run in the most efficient way. In this context, the human resources function is increasingly evolving into a less process-focused but more strategic role for attracting, retaining, motivating and developing the very best talent available. The recent elevation of the role of chief human resources officers (CHROs) demonstrates that companies recognise the strategic imperative in focusing on businesses’ most vital assets: their people.

Several factors have created the need for a more versatile approach to managing human resources. Companies are operating in a more complex global environment where the demand for capable talent is greater and the competition for that talent is more intense. Recruiting and retention are top agenda items for companies and developing the right organisational structures, creating optimal incentive systems and building the internal infrastructure to support growth are key strategic initiatives. Organisations need a leader to help shape them, grouping functions together to ensure the best cooperation, interaction and information flow to be effective.

This has resulted in the growing need for a chief human resources officer, particularly for larger firms, who must possess the industry knowledge and business expertise to devise an HR strategy that is tightly aligned with business strategy, corporate profitability and long-term objectives. CHROs are typically charged with a mandate directly related to business success: accessing the best talent; retaining, motivating and rewarding individuals and teams, and developing future leaders. Driven by the well-recognised importance of talent and organisational effectiveness as a major value creator and competitive differentiator, world-class CHROs are increasingly business leaders who help build and shape enterprise strategy in concert with the C-level team and the board. They are bridges to the board of directors on a wide variety of issues from compensation to succession planning and to external audiences on brand and company culture.

So to assume that the responsibility of HR is purely administrative functions and operations is no longer appropriate. In fact, outsourcing and process improvements have removed the burden of HR administration freeing up time for higher value initiatives. As we have shifted from a manufacturing based economy to the global information age, HR no longer has to manage labour relations, but must oversee a more demanding workforce where employee engagement and team productivity drive success. These trends are reducing the emphasis on many traditional HR duties and heightening the focus on talent and leadership development and serving in a strategic advisory role to the C-level team and board as the primary HR leadership objectives.