Human resources (HR) professionals have long made the case for employee experience to be a key strategic driver within organisations. With greater focus on company culture, it would appear that the long-heralded shift to people-centric businesses has finally happened.
But is it HR that’s actually driving this change? A recent study by Sage found that just 40% of HR leaders believe that employees fully understand its role, while 60% of C-suite leaders still see the function as purely administrative.
“While the role of HR has evolved significantly over the past decade, the historical perception of HR as an admin-heavy function still prevails,” says Eesha Phakey, head of HR at integrated communications agency Rooster.
“Long-standing perceptions can be hard to shake and our collective understanding of what a job in HR looks like simply hasn’t caught up with the times.”
Businesses: ignore HR’s insights at your peril
However, there are conflicting findings from Sage’s report. Some 91% of HR professionals – and 96% of the C-suite – believe the department’s role has “changed drastically” over the past five years. If everyone acknowledges a shift, why the disconnect with how the majority views HR?
While the upheaval of the Covid-19 pandemic changed attitudes of workers and some business leaders, it may have actually reinforced traditional views of HR. Lynda Folan, an HR consultant and doctor of organisational development, explains that high levels of employee turnover put immense pressure on businesses’ people teams.
“Just getting bums on seats has become a really significant challenge over the past few years,” says Folan. “After Covid, you had the ‘great resignation’ and all the other resignation trends that have popped up. HR teams have been forced back into that very transactional space.”
This can have serious consequences, Phakey explains. Businesses that ignore the insights of HR and pursue more obvious revenue drivers at the expense of building an effective organisation and culture may suffer in the long run.
“Businesses that fail to acknowledge HR as a key strategic player will miss out on the valuable contribution they make to the success and longevity of the company. We can collect meaningful data and provide the C-suite with strategic recommendations on company policies, recruitment strategy and even CSR initiatives,” says Phakey.
“Retaining good talent will always be more profitable than bringing on new recruits, given the cost of the recruitment and onboarding process. However, because HR is a function that doesn’t directly impact business revenue, smaller businesses often view HR as a luxury rather than seeing the long-term ROI.”
How making HR a hero can transform culture
Despite having fewer than 50 employees, Phakey says Rooster has shown a commitment to empowering her since becoming the company’s first head of HR. She believes there is a clear understanding of her role within the company, which she credits to the company’s investment in supporting technology and new policies that improve staff experience.
“We’re proud to have rolled out our own menstrual policy this month and be part of the movement that recognises the importance of destigmatising menstruation at work. This policy was developed through direct consultation with employees to ensure it reflected what people want,” says Phakey.
“Our HR platform has supported this policy roll-out as our ‘single source of truth’. We can easily pull demographic data to support the need for menstrual and menopause policies in an agency that is nearly 70% female.”
This commitment to data is also fundamental if HR teams in bigger organisations are to prove their value. Kelly Metcalf, head of people experience at Fujitsu, says her team is viewed as a central part of the discussion in achieving the business’s goals and has influenced other teams by its analytical approach.
“Our HR insight and analytics team is widely viewed as a template for other units to follow when using data to deliver positive business outcomes,” she says. “We aren’t seen as a mere administrative function; HR leaders are treated like any other business leaders. We have unique insight into getting the best out of people and making the company a place people want to help succeed and stay at.”
This has improved employee experience across the organisation. At Fujitsu, diversity and inclusion training has proved popular over the past few years, with many leaders across the organisation taking part and then implementing new processes in their teams.
“I always take it as a compliment when other senior members of the organisation take some ownership over ideas that have originated from the HR function,” says Metcalf.
“Being a values-led organisation helps in this regard too. Across Fujitsu globally we have three consistent values – empathy, trust and aspiration – that we strive to embed into our culture throughout the people-first policies we design.”
Why HR needs a C-suite role
Ultimately, greater cut-through requires HR leaders to stand up for their teams and make the case for inclusion at the top table.
“I would never have taken a job if it wasn’t in the C-suite,” says Folan, who held CHRO positions at companies including Tesco and The Hard Rock Cafe. “Without that you don’t have the level of influence. You need to influence both the C-suite and the board.”
Folan believes making that case will become easier; as younger workers filter into organisations, companies that don’t have a people-first voice on their board will lose out.
“Generation Z is going to push us to change. If we don’t start making organisations that work for its people, as well as profit, we’re going to see huge levels of churn. Whatever you do and wherever you are in the world, HR has to have a seat at the table.”