Strategic Human Capital Insights

HR Has Evolved: 2 Human Resource Functions Redefined

Two businessmen with chess in officeThe function of human resources (HR) means so many things to different people that, in many cases,  there is a resulting identity problem for HR.  There are mixed and sometimes unrealistic expectations of the HR function. Over the past decade, HR has attempted to rebrand itself to the point where the terminology is ambiguous! No wonder people outside HR are confused about what HR does.  The new word in vogue is Talent – and it is used to describe everything from Talent Management, Talent Acquisition, Talent Development, Talent Success, Talent Engagement and the list goes on.  HR is definitely evolving and going through rebranding at the same time. It is no surprise that the people whom HR serves may be confused about what HR does.  HR is now responsible for a number of functions that simply didn’t exist when I first started working in HR.  I remember when HR was the upgraded version of Personnel – but what has changed over the years?  The one change that the recent research does highlight is that the perception and value of HR has changed – the consensus view globally is that HR’s value is in steep decline. How can that be? It may be in the evolving perceptions of HR. 

The reality is that the HR function has evolved over the years into two separate functions.  Instead of acknowledging this split, HR has rebranded and to what end? Sadly, I often hear people describe HR as payroll or benefits, and it is, can be and should be so much more. Every organization creates a unique HR function that comprises some or all of the following two functions. Consider these two evolving functions and think about how HR is structured in your own organization:

Function 1: HR Compliance (Mandatory)

HR Compliance deals all the process, legal and regulatory issues that HR Compliance must manage. There is no choice.  The areas include benefits, payroll, attendance, onboarding, recruiting (in some cases), HRIS, general admin, to name a few.  We must acknowledge that every year there is something happening in this space that layers more and more work on this HR compliance function.   This is the administrative and execution arm of HR that the organization relies upon.  It is often perceived as less ‘high profile’ but to be clear, it is absolutely necessary.   It is also the function that can be and often is outsourced!  And here’s the issue.  This HR function is often taken for granted, until something goes wrong.

Function 2: Strategic HR (Should be mandatory but is often only partially provided or non existent)

Strategic HR is the function of HR that aligns with the business.   Strategic HR provides the human capital insights, from a business perspective, that help the business units they support achieve business goals and initiatives.  To be relevant, this function must have the business acumen to understand the business goals and translate how the present and future human capital capacity can be deployed to reach those goals.  At the same time, they must ensure that the organization is agile, resilient and ready to meet the next market opportunity and competitive challenge. Strategic HR must be in every planning meeting and needs to articulate the business case for human capital. Embedded in this role is the ability to anticipate and envision, communicate, influence, negotiate, problem solve, analyze near, mid and long-term business risk relative to human capital and have a thorough understanding of organization development.  They must be capable of human capital gap analysis and provide relevant and targeted learning and development solutions along with a governance process to ensure accountability at every level. They should be able to say no when misguided decisions are made regarding human capital.  This is a very different role than the HR Compliance role.

So as we consider the two different functions that are possible within HR, these functions have indeed evolved into two very different but equally important functions.   What does your HR team look like?  What function dominates?  This HR condition has evolved over many years.  It may be the time to conduct an appraisal of what is really happening in your HR world and how it is perceived by other parts of your organization. It may be time to reset the course of HR in your organization. If you want to see if your organization needs to press the HR reset button, take our complimentary organizational stress test.

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Topics: Human Resources

Posted by Joanne Flynn

Joanne Flynn

Joanne T. Flynn heads up the human capital advisory group, Phoenix Strategic Performance, Inc. Previously, she was a Managing Director with Phoenix Group International and was Vice President / Director of Global Learning and Development at Goldman, Sachs for nine years. Joanne works with organizations as they face global growth and competitive challenges. She works with her clients to be both externally focused and internally responsive. With her unique background, she aligns competitive strategic efforts with related internal organizational leadership challenges. With the benefit of her career-long focus, Joanne contributes the unique insight of aligning strategy to internal organizational structure and process. She focuses on human capital relative to strategic initiatives, accelerated business growth, value creation, and business development. Joanne holds a Master of Arts degree in Business Management from the University of Oklahoma. In addition, she holds a double degree major in History and German from St. Elizabeth University, as well as certificates from a variety of leading universities and professional training and development organizations. Joanne has recently published her latest book, Accelerating Business Success, The Human Asset Management Strategy.

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