The Shift in Perception Towards Human Resources: From Secondary Department to Strategic Partner
When I was finishing my Business Administration degree and thinking about focusing on human resources, several people around me warned that it was the worst department to join. I was even given the privilege of speaking with the CEO of a large chemical multinational in Spain, who told me, “Human Resources are dead, we’re going to outsource them. Team leaders will take on the role of HR.”
On the other hand, I was reading and studying what makes a good HR department and all the value it brings to the company: supporting leadership management; creating efficient and optimized structures; establishing policies and processes like performance management to grow and retain people. From Daniel Pink, Daniel Goleman, Richard Branson, to Boyatzis… they all said HR is key to the future of the company.
In the end, I managed to understand the relationship between the two perspectives: the personnel department was going to transform into something different. Over the last 20 years, we’ve seen this transformation: HR directors began sitting on the executive committee, performance management processes with competency levels were created, management training programs were encouraged, compensation policies were defined, and SAP was implemented in the department.
The Added Value of the HR Department to the Business
Today, in the 2020s, we’re talking about People Management and observing the added value it brings to the business and financial results. As Deborah Wilkes states in her book Empowering HR: in companies, the mindset of people and organizational culture towards HR is changing. It is no longer a secondary department contributing a residual value to the business. Now, it’s strategic, and its opinion is valued and needed in executive committees.
Finally, companies and their CEOs have realized that the real long-term competitive advantage any organization has is its human capital. They’ve come to understand that the turnover ratio is as important, if not more so, than financial forecasts. The latter looks at the short term, while the former delves into long-term sustainability.
And to achieve all of this, HR itself is evolving. The people who work within it are no longer just administrative staff handling payroll and Christmas dinners (though they still do that too). Now, you’ll find people titled as Coaches, many with an MBA, who are capable of understanding the business and providing a strategic view of it.
Conclusion: Empowering People Management for Business Success
Today, within the HR department, there are expertise units that adapt the latest trends in people management to the organization, along with a Business Partner unit that sits alongside the business, analyzing financial results and discussing which people can add the most value to each function. The famous HRBP (Human Resources Business Partner), supported by the expertise units, creates organizational structures that are appropriate to achieve the desired outcomes. The HRBP manages team dynamics, helps leaders manage people, fosters engagement, and ensures that the leader successfully implements training on the job. Today, HR is critical to the success of teams, departments, and businesses.
Updating the words of that executive from 20 years ago: HR is now invisible because it’s behind every leader, supporting and assisting their people management to ensure the company’s long-term sustainability. Today, the People Department has empowered itself to guarantee the success of the company.
