Putting the Capital in HCM: A look at how HR is defining strategic business decisions in a digital-first world

|

|

Last update:

As a bellwether occupation, the HR profession has long been about hiring new employees. If your interaction with a HR has been limited to the hiring process and on the day of hiring then you won’t be alone. But that’s changing and it’s changing in a big way.

HR professionals and recruiters are now increasingly seen as business leaders thanks to improved technology that provides vast amounts of information about people. This actionable data means they are in a position to advise the C-suite on important strategic business decisions. As a result, these roles have evolved from just filling an organisationโ€™s vacant roles.

This profound change in the stature of HR leaders, from order-takers to strategic advisors, is especially handy when industry is preparing for slower growth. Critical and difficult resourcing decisions need to be made this year by many as to whether to layoff employees, freeze hiring, upskill existing employees or look at internal mobility to fill talent gaps. Retaining the high performers will be key too in order to be prepared for when economies open up again.

This changing role of HR will not only spur cultural changes but also change the face of hiring.

HR as a strategic partner

HR business partners
The role of HR has moved beyond filling vacancies within an organisation | Image Credit: DepositPhotos

Strategic work has long been a high profile role within an organisation that was largely restricted to the functions like sales, finance, and marketing. The human resource (HR) function, on the other hand, was seen as a necessary cost centre that lacked or did not need a strategic outlook.

However, the pandemic showed that HR managers were so much more than simple vacancy fillers. From designing hybrid work structures, ensuring people stayed motivated, to providing right WFH tools, HR played a key role in ensuring the organisation stayed productive and kept functioning.

Thus, HR teams are now increasingly seen as strategic partners responsible for developing and directing an HR roadmap as a strategic goal of the organisation. They are also responsible for driving the whole business forward and have proven themselves to be an important lever in the overall success.

In fact, a Gartner study shows that 70 per cent of CEOs now expect their CHROs to play a key role in enterprise strategy. This is a testament to the fact that HR is a unique position capable of impacting performance including company culture and employee engagement.

Another comprehensive study by cloud-based HR Tech company HiBob shows that HR function is seen as somewhat important, important, or very important for business success in major cities around the world. Around 48 per cent of the respondents said HR function is important for business success while 47 per cent respondents from France deemed HR function as “somewhat important” or “important.”

In Germany, 36 per cent see HR function as somewhat important while 29 per cent see it as either “important” or “very important” and 44 per cent in Italy see it as very important. Among major cities, 42 per cent of the respondents see HR function as important to business success while another 36 per cent see it as somewhat important.

If HR was a passive role in the past then the pandemic has shown their active role within the organisation. In other words, HR has solidified its seat at the C-suite table permanently and there is now enormous amounts of data to support that. You could say they have become fluent in CFO speak and given the value of their insights into a businessโ€™s most important (and costly) asset – its people – itโ€™s no surprise that HR has become one of the CFOโ€™s closest allies.

Emphasis on the people

HR human capital management
HR is now designing key metrics for organisational success | Image Credit: DepositPhotos

There is one certainty amidst all the uncertainty in 2023; HR managers and recruiters will have more work to do than before and it will centre on that work won’t have to do with orders but instead will mean leading the organisation into the future of the world of work and the workplace environment.

We will see CHRO (Chief Human Resources Officer), CPO (Chief People Officer), VP People, and others find an active seat at the C-suite table. HiBob found that 26 per cent of the people across the US, the UK, Canada, France, Germany, Italy, and Spain see the director of HR as their primary contact from HR. It was followed by VP of HR and HR manager.

Among the same respondents, 31 per cent said they collaborate with HR on a bi-weekly or weekly basis followed by 26 per cent who said they collaborate on a monthly basis. Among these countries, 100 percent in the US, Spain, and Italy described frequent collaboration with HR, followed by 96 per cent in Canada, 93 per cent in the UK, 80 per cent in France, and 79 per cent in Germany.

HR, as a vertical within an organisation has also evolved, in a big way. It is now measured on important KPIs such as time to hire, turnover, pay gap, among others. HiBob tracks a total of 16 such KPIs including attrition, retention rate, time to fill, employee growth rate, quality of hire, gender diversity ratio, to name a few.

As a business function, HR is changing in ways never seen before. These changes are also why they are finding themselves as business leaders and not just those meeting another need of a business.

From talent acquisition strategies to enabling remote work to skilling people for future business needs, HR are doing the heavy lifting. One of the roles leading the way is that of CHRO, directly reporting to the CEO or CFO of the organisation.

New HR roles to support the change

HR C-suite
HR has solidified its seat at the C-suite table | Image Credit: DepositPhotos

In March 2021, Elon Musk, the most eccentric business guru right now crowned himself “Technoking of Tesla.” The role was a departure from his chief executive role and further cemented how tech companies can run a gamut of roles that essentially mimic the traditional roles.

However, there are many meaningful roles being created that are essentially the extension of HR functions. Even before the pandemic, GitLab pioneered a role called Head of Remote that is creeping into organisations across the industry.

What is next for HR? Its future is likely to further evolve with the transformation around talent and workforce. The Cognizant Centre for Future of Work and Future Workplace sees entirely new positions being created around five core themes: individual and organisational resilience, organisational trust and safety, creativity and innovation, data literacy, and human-machine partnerships.

Here are some roles that could be created in the future as an extension of HR as a strategic partner.

  • Director of Wellbeing: The pandemic has paved the way for a new HR role that focuses on wellbeing as a business strategy. This role could be pivotal for employee retention and some companies have already begun hiring for this role, albeit with a different title. The Director of Wellbeing will be responsible for strategic decisions around wellness and practices to nurture emotional, physical, mental, and spiritual health of employees.
  • Human Bias Officer: As tech companies increasingly weave AI into their products and services, HR professionals could act as leaders to set the tone for ethical behaviour. With digital transformation and data culture, companies could create HR roles such as the Human Bias Officer to help mitigate bias across all business functions.
  • The Future of Work Leader: One of the roles that could become commonly accepted soon is the Future of Work Leader. The role could define the skills necessary for an organisation to evolve in the midst of rapid change. From defining the strategy for the future of work to creating upskilling and reskilling plans, the future of work leaders will play a prominent role in setting up an organisation for success in the future.
  • HR Data Analyst: Data Analytics is currently driving strategic decisions across business functions. HR functions could also adopt analytics to solve key people’s challenges. A data analyst within the HR function could provide accurate insights around employee performance, retention level, and even connect the dots between different data streams to solve business problems.
  • Chatbot and Human Facilitator: The Future Workplace sees Chatbot and Human Facilitator as one of the emerging roles in the HR industry. The role, as the name implies, covers emerging technology like chatbots to improve employee experience. The idea being that chatbot handles routine tasks like screening candidates and answering frequently asked questions while humans focus on strategic decision making around recruitment. This role is already part of HR functions but is expected to gain more prominence.

All the new roles will essentially report to the CHRO and help make business decisions faster. With the risk of recession and higher inflation, companies are rethinking their business model for the future and will look to the HR function for guidance to steer the business in the right direction.

Karthek Iyer

Karthek Iyer is the Senior Editor and Content Marketing Lead at Silicon Canals, covering news and partner content. He leads our collaboration with clients like AWS, Remote, Flippa, Techleap, Startup Amsterdam, etc. Previously he was a personal technology writer reviewing consumer products at leading Indian newspaper and digital media outlets such as Indian Express, Digit, BGR India, and Pricebaba. He graduated with a bachelor's degree in Engineering and lives in Mumbai.

Partner eventsMore events

Current Month

02apr(apr 2)8:00 am04(apr 4)6:00 am0100 Europe 2025

Share to...