How well HR teams are prepared to support the needs of both employers and employees?

In most companies HR departments are among the largest administrative teams, and a high level of manpower is necessary to accomplish the large number of repetitive tasks. In future, many tasks can and will be automized or outsourced. HR policies are shareholder driven and due to increasing competitive pressure among companies, the goal is to extract the most value out of the human capital been employed. HR employees often less focus on individuals and their personal developments, but rather on matching supply and demand at the lowest costs, resulting often in low levels of trainings and inflexible compensation policies. 

Employees nowadays want to learn and progress continuously and do not understand a job as a lifetime commitment anymore, like previous generations did. This expectation has a major impact on HR, specifically in terms of challenging processes based on annual cycles (performance management, benefits and compensations, training programs, etc.). Today personal development opportunities are a major criterion for choosing an employer because most employees need to progress professionally in order to ensure their employability in an ever faster changing working environment. This makes employees been highly opportunistic in the way they manage their careers. Employee loyalty consequently declines considerably and in the modern working environment it is perfectly normal to change from one company to another in order to reinforce or add professional skills, or to simply advance in the career. All in all, the relationship between employers and employees is weakening because many employees want to be more independent of their employers, with whom they often only maintain money for work relationships. 

HR solutions are still often mass-customized and therefore fail in developing and retaining talents. Based on my experiences, HR needs to play a much stronger role in future. Too often only the line managers determine growth potentials (and therefore also learning opportunities) of their employees. But talent needs to increasingly be managed according to individual profiles rather than job descriptions. Many HR processes are still mainly people-driven, and so is the working attitude of many HR departments. After all, computers or processes cannot replace a good conversation. But do feel high performers really always been recognized by HR teams? Are the employees who have time for good conversations with HR employees really the same employees who are contributing most to the companies’ successes? According to Deloitte’s “The future of Human Resources”, high performers tend to prefer to be assessed by automated systems to minimize the impact of personal relationships on their evaluations. Median performers on the contrary tend to prefer to be assessed by a person to compensate for the potential performance gap through establishing a personal relationship with their evaluator. Consequently, often neither contributors nor talents advance fastest in their careers, but self-expressionist and underachievers. This shows the importance of aligning emotions and behavioral incentives to optimize workforce performance and motivation. For many HR employees this is very challenging, since in many companies HR teams are working in purely administrative roles, far away from realities and responsibilities of the daily business. Therefore, often a good relationship between HR teams as employers’ representatives and employees actually has little value on its own. Consequently, employees are increasingly becoming the architects of their own careers. The modern job market requires professionals to drive their own advancements by strengthening their personal and professional skills, building their personal brands and defining relevant opportunities through their professional networks. 

Moving forward, organizations need to become agile. They must flatten the hierarchical levels and the working environments and company cultures must be adjusted to support engagement and collaboration, interactions and open exchanges of ideas. Companies working in silos are failing due to their hierarchical constrains which do not allow the free expression of opinions and exchange of ideas. Leadership needs to be completely transformed to manage increasingly open and interactive in alignment with their employees instead of on-top of their employees. In successful companies’, workforces can no longer be managed legitimately by hierarchical authorities alone. Here HR teams can and need to play much crucial roles in managerial trainings and change management. From my point of view this truly defines the term HR Business Partners. 

Staffs need to be managed based on desired outcomes and not just according to standards and outlived processes. Senior managers need to develop differentiated management styles suited to the demands of younger generation employees and employees with different cultural backgrounds. Within companies, objectives need to be jointly shared. Why HR should not take responsibilities in the companies’ business achievements as well? Since HR bears as much responsibility for the successes and failures of companies as the operational teams, it must accept to be measured according to its economic performance with relevant KPIs. Too often HR purely focuses on back office roles and administrative tasks. Instead it must be integrated more closely into operational teams to better understand business needs and the demands of both senior managers and teams. Only by doing so HR can help to develop new working practices, particularly in stagnant organizations which have been organized vertically for decades and are weighed down by outlived rules and “command & control” processes. 

Recently I read an inspiring article about Decathlon, which is replacing the HR department with HR committees, where employees from various teams come together to discuss and recommend HR policies, recruitment policies or processes. “Every team leader is an HR head himself or herself because who better knows the best practices for their own team?” This change doesn’t let HR teams become obsolete, but it shows that having an HR head sitting in her/his office and making decisions that will impact all employees does not fit anymore into the modern working culture. The future role of Human Resources will be more and more defined in the quality of employee-employer relationships and the measurable values HR teams can provide to both parties. 

Consequently, HR teams need to take on different tasks: 

▪︎ Detecting talents inside and outside the organization and develop favorable working cultures and values to attract and retain talented employees. 

▪︎ Creating roadmaps for cultural changes in hierachial organizations, to build environments supporting free expression of opinions and exchange of ideas.

▪︎ Developing advanced workforce planning strategies, to replace the matching supply and demand at the lowest costs policies. 

▪︎ Reinforcing the employability and personal developments of highly talented employees, free of emotions but in accordance with behavioral incentives. 

▪︎ Redefining employee assessment models and encouraging senior managers to exercise their assessments responsibilities in transparent and beneficial manners. 

▪︎ Supporting employers in the digital transformation of HR departments, not only to safe costs due to automatizations, but much more to ensure talents not only advance based on supports of their superiors but in accordance to actual skills, contributions and KPI achievements.

▪︎ Designing more agile and efficient organizations and work methods that can break down silos and add values. This includes the eliminations of tasks and activities that have lost their reasons of existence already. 

▪︎ Supporting senior managers and teams to establish these new agile models within the organizations, by implementing positive cross functional collaborations and communications. 

▪︎ Defining and establishing new leadership models by recruiting new profiles from outside the organizations to diversify teams. 

▪︎ Building new labor and work models, offering more personal responsibilities for achievers and talents. 

All this will help to keep companies competitive and to increase the relationships between employers and their employees. 

Shanghai, August 2019

Axel is German national and has been active in the Chinese retail market for the past 17 years. His career is focused on FMCG, fashion and sports goods retail in online and offline channels. Since 2019 Axel has been working with Totuba, a management and technology consultancy, supporting MNCs in their market entry and market expansion strategies.