Transformation of HR

Historically Human Resources (HR) has sat in the back seat of many organisations, acting as a support and letting out the odd back-seat driving instruction. With businesses turned upside down in the pandemic, HR was thrust into the driver’s seat to navigate redundancies, health and safety risks, the mass move to remote work, and a workforce now reevaluating their priorities and careers. McKinsey & Company spoke with over 80 chief human resources officers (CHROs) to gain insight into where they see the future of HR. The results are summarized in this article, noting that over 90 percent of CHROs believe the strategic function of HR is here to stay, and that HR needs to transform the way it operates maintain its leadership in the future.

These are the changes CHROs are prioritizing to transform their operating models according to the article:

• Utilizing digitalization to our advantage. Mobile self-service tools, process automation and gathering and analysis of employee data for more informed decisions.
• Enabling agility and fluidity. Breaking down silos within our own HR function and providing a flexible, agile team who can respond to issues at short notice.
• Refocusing the HR Business Partners. Move HR Business Partners away from routine administrative tasks, freeing them up for a more strategic role.
• Creating HR practice groups. Tackling processes end-to-end to dissolve the strategic versus transactional divide.
• Organising around the employee experience. Identifying the “moments that matter most” in the employee journey and aligning HR resources and functions accordingly.
• Give HR Business Partners a dual role. Business Partners will support specific areas of the business and also have a functional specialization that spans across the organisation.
• Putting the business in the driver’s seat. Shifting decision-making power and responsibility to line managers where possible, for things such as recruitment and performance appraisals.

During the interviews, the CHROs also identified four areas of focus that will support the evolution of HR from a supportive function to a critical leadership and strategic role:

1. Improving capabilities in the areas of agility, digitization, and design of the employee experience.
2. Adopting a governance model, moving beyond the traditional separation of tasks.
3. Empowering line managers to perform (and champion) people leadership tasks.
4. Maintain real human interaction at points along the employee journey where personal interaction adds the most value.

Some of these suggestions may challenge us, and will certainly take time and effort to implement. The investment in the future of HR as a strategic partner and the resulting benefits across the organisation is well worth the journey.