Pic: IMAGESBAZAAR

HR has long since been considered as a support function. Has that definition changed over time? Is it becoming more strategic in nature?

With increasing competition, changing economic and business environment, CEOs have recognised people capability as a competitive advantage and therefore, HR is an important and a critical business function; besides, the ambition and aspiration of the well-informed new generation has given a new dimension to HR function. Large diverse business conglomerates have already experienced the contribution of HR as a strategic partner in organisation-building and sustaining growth," says Pradipta Panda, group president, HR, Adani Group.

On similar lines, Sandip Mallik, director- HR, Aviva India, says, "HR is becoming more strategic on two counts. First, HR is a risk manager, and second, HR facilitates the growth of engagement capital, both of which have a huge impact on franchise valuation. Traditional engagement approaches provide a quick fix, but lack long-term benefits and potentially ignore upto 65 per cent of the reasons why employees disengage. Today's HR professionals contribute to creating engagement capital, or building engagement over time, to improve employee effort, retention, and key business outcomes. As we balance short-term improvements with engagement drivers that sustain engagement over time, there is a greater alignment of the HR function to an organisation's strategic needs. One of the key pieces in franchise risk management is smooth succession. An effective succession management strategy by HR overcomes four risks: vacancy risk in critical positions, readiness risk among designated successors, transition risk as new leaders move into roles, and portfolio risk from poor deployment of leaders across the organisation."

While it is clear that HR - over a period of time - has emerged as one of the key strategic decisionmaking areas for any company, what are some of the factors – internal and external – that have contributed to the strategic aspect of the human resources function? "With capital and technology in abundant supply, there is very little differentiation in the marketplace. The only true differentiator turns out to be people. It's the workforce that creates a credible, long-term relationship with the customer base. HR is the key enabler in moving all people vectors in the right direction. HR is also accountable for creating long-term employee value proposition. The best HR organisations engage in thoughtful discussions to collect data and test assumptions to implement an authentic employment value proposition that is a source of competitive advantage. Organisations that present an authentic, differentiated value proposition can better retain current employees and promote attributes that will make them an employer of choice in the Indian labour market," adds Mallik.

Atul Saxena, head, HR, CHD Developers Ltd lists out other key factors, "Internal factors contributing to the strategic aspects of HR functions are organisation structure, culture, competencies, internal policies, processes, etc. Likewise, some of the external factors contributing to the strategic aspects of HR functions are market scenario, competitors, government policies, technological advancements, etc."

If HR is entrusted with key roles such as strategic planning of human resources in the organisation, what kind of responsibilities does it entail on HR heads? Is the HR fraternity geared up to be at the helm of strategy planning anytime in the near future? "The HR fraternity in the last decade has learned and had to learn the hard way the importance of moving up the value chain. HR has learnt that if it can't add value to the business, it will get dropped, as the basic transaction activities either can be automated or outsourced to a service provider, thereby reducing the costs for the organisations. So HR started moving from giving just qualitative inputs to quantitative inputs for decision-making. HR has become a ‘measurable' function like sales or operations where it has to prove its reason for existence," says Deependra L Chumble, chief people officer, Hexaware Technologies.

At the same time, the need of the hour is for HR heads to take more interest in core business activities so as to make any substantial contribution to strategy as a whole. "HR managers still need to get involved with the businesses to begin with. That is where they need to focus on, instead of getting caught up in typical HR administrative processes. It is true that activities such as recruitment, selection, training, performance appraisal and compensation plans need to be carried out, but HR needs to give equal importance to strategic effectiveness as well. A setback that the HR fraternity faces is that HR personnel are not fully equipped to deal with strategic functions. The HR department will never achieve its full potential unless it demonstrates the role it plays in creating value for an organisation and its return on investment," concludes Rajiv Vastupal, president of AIMA (All India Management Association).

- Unnati Narang