When it comes to human resources many business leaders have had a mixed experience at best. It is not often that HR and business performance are used in the same sentence, and it would be safe to say that many CEO’s and business owners see little value in what HR can bring. Yet since the pandemic began, business leaders have relied heavily on their HR leader to support them in managing the significant workforce challenges they have faced. Business survival led to a far greater focus on the employee with a realisation that talent was, and still is, one of the greatest contributors to business value.
Josh Bersin through a yearlong research project, identified 94 business capabilities that define how HR professionals perform. He found that among all the factors that contribute to employee experience and productivity, the capabilities of HR were one of the strongest contributors. He goes on to describe the positive correlations between a strong HR leader and revenue growth, profitability, and innovation. The inverse is true.
So, what is good HR and what should they be focusing on to drive business growth and sustainability in a post COVID world? There are five critical elements to driving business results through people:
HR leaders have been focused on the importance of leadership for decades. Now leaders need to inspire, motivate, share their vision, and coach and build their teams, often in a remote setting and often without the tangible and important acknowledgement you might enjoy in person. This requires them to learn new and different skills, to adapt and be prepared to make mistakes and be vulnerable.
Skills for the future
The Future of Jobs Report 2020 by the World Economic Forum reported that on average, companies estimate that around 40% of workers will require reskilling within six months or less. Sustainable business growth is highly dependent upon having the right people, with the right skills to do the work. Competitive advantage will depend on HR leaders making this a key strategic priority, understanding the skills required, the gap that currently exists and how this need will be met. This is no longer about skills for the future, this is about the skills for now.
Agility & flexibility
Remote working is here to stay. Hybrid working has been added to the corporate vernacular. Many employees have come to enjoy their newfound flexibility. As HR leaders have known for some time, high performance is achieved by focusing on setting clear performance standards and measuring outcomes not inputs. It’s also about creating an environment conducive to employee well-being and desire to perform. In a world where you cannot always see what your employees are doing, new and innovative ways of monitoring performance will be required. Rigid and outdated performance processes will not work.
Finding great people and keeping them
Unemployment in Australia has dropped to 4.9% in June 2021, down from 7.4% in June 2020 (ABS). In some industries and professions, the lack of available talent is really starting to hurt. In others, they must let people go, even when they don’t want to. The employee value proposition (to attract the best people) and employee engagement (to retain the best people), once seen as HR jargon are now seen as critical business priorities. Innovation and in some cases deep pockets will be essential.
Foundations are important
Whilst this might be considered boring, foundational HR practices must be in place. If the basic employee processes are not in place or not done well, they can be distracting and destroy trust and loyalty. Sometimes business and HR leaders focus on this too much and to the detriment of broader business priorities, at other times they are dismissed as transactional and unimportant. Without these foundations in place, it will be difficult to find the time or energy to focus on those critical business priorities outlined above.
CEO’s who have good HR leaders on their team already know the value they can bring. It can be very lonely at the top and to have the support of your HR leader when you need it most is invaluable. Those who invest in and see the value of good HR reap the rewards personally and professionally and will deliver better business results overall.
Featured in CEOWORLD Magazine (September, 2021), ceoworld.biz