Human Resources traditionally has been underrepresented at a board level. HR directors are often seen as managers tasked with recruitment and training instead of vital decision-makers responsible for ensuring a return on the considerable investment companies make in their personnel. Fortunately, HR is evolving, and the professionals working in this field are becoming more involved in the strategy of the company as a whole. HR professionals must balance their strategic responsibilities while ensuring a healthy work environment and talent management program.
Why HR Should Be Involved With Business Strategy
Most strategic decisions cannot be independent from HR. Whether it involves hiring additional experts, upskilling employees, tasking employees to execute a strategy, or retrenching staff, people are at the heart of everything the organization does.
One company that is leveraging HR as part of its business strategy is the Toshiba Group. According to GM of Personnel and General Affairs, Kazuhito Mihasi, the company is "transforming from a working company to a company we hope to work for.”
The Toshiba Group is implementing work style reforms to become a leading Cyber-Physical System technology company, requiring a diverse work environment that fosters employee satisfaction and engagement. Toshiba Digital Solutions is spearheading the reform with initiatives in processes, technologies, and culture. Examples include telework, satellite offices, job rank system, diversity and inclusion, second job trial, and deploying Robotic Process Automation (RPA), and an internal social network. The reforms align with the future of work, which includes large-scale changes such as freedom from fixed hours and locations, corrections to employment inequality, project-based work styles, and widespread collaboration.
If employees aren't satisfied and productive, a business simply can't reach its full potential. The contributions of HR are vital. The HR department has the insight and knowledge to ensure that the policies and strategies created reflect the needs of the workforce and align with the goals of the business.
Business and People Strategies in Action
HR may be viewed as a "soft skill," but it's far from the truth. HR professionals have made significant contributions to the organizational bottom line for years. Here are just a few ways HR can impact the profitability and operations of the business:
Leveraging Data-Driven Insights To Enhance Future Capabilities
Modern HR managers have vast quantities of valuable data at their disposal, including information about retention levels, absence, productivity, and employee satisfaction. When working in conjunction with HR, executive teams can make decisions based on reliable information instead of assumption.
“By providing data-driven insights, People Analytics can aid in managerial decisions by helping identify drivers of engagement, retention, performance, and wellbeing, among others. Companies can use the insight to customize interventions for different employee groups to optimize organizational performance,” says May Leng Kwok, Regional Head at the CIPD Asia.
The best source for analytics is the company’s Human Resources Information System (HRIS), which contains a wealth of information on recruitment, talent, and performance.
“Analytics should benefit both the employee and the organization. Ensure that the data collected can be legally used for the intended purposes. It is also important to consult with employees on their willingness to share data and give them the option to opt-out if they feel uncomfortable. Also, ensure you link the different data sources that you regularly use so that it’s all in one place, and focus on improving data accuracy. Remember to present data in the simplest way possible for a non-technical audience and teach them how to interpret it,” says May.
Acting as Custodians for the Business Vision
HR professionals are instrumental when it comes to developing long-term strategies, including structural changes and development programs. They have their fingers on the pulse when it comes to the priorities and skills of the existing workforce and can provide in-depth insight about how strategies should be developed and implemented to achieve key objectives.
One company that has demonstrated this clearly is Tata Motors in India. The company believes in hiring a multi-skilled workforce from both the automobile and other sectors to enrich their business. They have ongoing partnerships with industrial training institutes as well as their own professional training centers.
New candidates undergo stringent training to familiarize themselves with the companies’ mission, vision, rules, and regulations. Existing employees are also regularly trained to keep the teams on track with new goals and initiatives.
Ensuring Compliance and Hitting Environmental, Social, Governance (ESG) Goals
Corporate social and environmental responsibility is high on the agenda of all businesses, as government mandates aim to hold companies accountable for their impact. Not complying with legislation leaves businesses vulnerable to hefty penalties and considerable environmental fallout. HR can help businesses make decisions about hiring and employee development in line with the relevant laws and provide valuable contributions when it comes to ESG and CSR (corporate, social, responsibility) policies, ensuring that employees understand and are equipped with the right processes to carry out their duties in a compliant way.
Diversity, equity, and inclusion (DEI) form part of all Corporate Social Responsibility (CSR) programs, and it’s particularly challenging in the APAC region. According to a Google survey, APAC respondents score 10% to 15% lower than the global average on questions ranging from the importance of equal rights to an interest in other cultures.
“The last two years has been hailed as an unprecedented time, which has both unified and brought out the stark differences in our world – be it access to resources or the right to express our true selves, we also need to acknowledge that DEI is all about adapting human behavior, something that requires continuous development of inclusion competencies and ongoing practice everyday to see visible impact around us,” says Rashmi Vikram, Chief Equity Officer, dentsu APAC.
Improving Employee Well-Being
According to the Mental Health Foundation, addressing well-being and mental health at work increases productivity by as much as 12%. Depression, stress and burnout are at a high across the APAC region, following the pandemic which can have a significant impact on a company's finances as well.
Lockton Companies China introduced a special Mental Health initiative to raise awareness about employee well-being in the organization, and to reduce stigma around the process. The company also introduced Mental Health First-Aiders to assist struggling employees. Writing in a LinkedIn post, Stella Sung, who is now SVP, Head of People Solutions - North Asia, opened up about her own struggles and encouraged employees to do the same. “Lockton Companies put our employees' mental health in the forefront. I encourage everyone struggling to come to myself, friends, family, or one of our qualified mental health first aiders to talk about it and we are always here to listen,” she writes.
HR professionals can become important advocates for employees and assist companies with implementing effective top-down well-being initiatives.
People Strategy and Business Strategy: The Best of Both Worlds
It's clear that HR professionals deserve a seat at the boardroom table as key drivers for both organizational strategy and important people initiatives that create an environment where employees are poised to reach their goals and fulfill their obligations to their employers. No other department is able to execute strategic initiatives in a way that goes straight to the heart of the company.
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