The new HRD: A business leader for a changing world of work

by Hudson
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Today’s transformational business environment has also had a major impact on the role of HR Directors.

Just as CFOs have gone from being largely focused on numbers to being responsible for wider strategy, so leading HR Directors have so much more on their agenda beyond payroll administration and placing recruitment ads.

In 2020, the human capital dimension is recognised as a critical strategic driver of organisational performance, and this falls squarely into the expanding remit of HRDs.

In the past, HRDs may have seen that the organisation’s commercial strategy was outside of the realm of HR, and best left to other executives.

There was a time when HR was more about administration and day to day operations than about strategy, but those days were back in the 20th century.

In leading organisations of today, HR is a holistic and strategic area which now spans employee engagement, education, productivity and  talent management through to innovations in remuneration packages more tailored to employees’ work life balances.

There is also a recognition that an organisation’s HR practices have an impact on its brand and its ability to attract and retain the best talent.

Onboarding staff and also managing those who exit the business are no longer administrative tasks, they have a direct impact on reputation and brand and ultimately organisational performance.

Then there is the increasing digitization of business, which is also impacting on HR. HRDs are not only working with new technologies such as AI in their direct recruiting functions, but they have a role in helping the workforce deal with the change management implications of digitization, from automation of functions through to remote working.

When it is framed in this way, as a critical factor in organisational performance, HR becomes a strategic area of the business and the HRD becomes a business leader, with a direct route to articulating strategy to board members and other executives.

It also requires a 360 degree vision of the organisation and the importance of people and culture.

“Most HRDs are now positioned as commercial leaders first and foremost. It is from this starting point that they act as a key partner of the business in delivering specialist, functional HR expertise and service delivery to the executive table” says Gareth Russell, Chief People Officer at Hudson APAC.

“We are continuing to see more HRDs come from non-HR backgrounds. Rather than ‘diluting’ the importance of functional expertise in the eyes of HR teams – CEOs and HR leaders alike are embracing this as a way of accelerating the expansion of HR’s strategic influence on organisations.

“HRDs must certainly be operating as commercially minded, customer-focused leaders – mobilising the HR function to drive overall business success.”

These changes were already well underway before the impact of the COVID-19 pandemic disruptions on business, but change has accelerated through 2020 and presented new HR challenges.

HRDs have been at the forefront of dealing with the challenges of remote working, restructuring and also, in many cases redundancies.

In the transition to remote working, the impacts span the full 360 degrees of change and extend through operational areas around devices and technology to deeper issues around engagement, leadership, culture and productivity.

With many organisations facing unprecedented pressure from the lockdowns, HRDs have also played key roles in the redundancy process, strategically identifying which roles are non-core but also driving sensitive and appropriate outplacement for those exiting staff.

Achieving the best results from this process also demands a deep insight into how the business functions and achieves success through the make-up of the workforce, and which roles are core and if areas can be outsourced or filled with contractors.

Executing decisions on building a contingent workforce to help the organisation’s performance through the lockdowns is a critical area of business strategy, and one in which HRDs have been to the fore.

“COVID has accelerated so many things, and the expanding role of the HRD is one of those areas,” says Hudson’s Gareth Russell.

“HR’s challenges for tomorrow are around harnessing the benefits of digitisation as workforces move towards unprecedented flexibility, while also promoting a shared purpose and deeper connections.

“These are exciting times for HRDs, as they play an even bigger role in shaping organisations and their people into the future.”