How HR departments in the GCC can bring more value to businesses

As we move into the second half of 2017, many businesses will be getting to grips with the opportunities and challenges from the first few months of the year, and looking ahead to those on the horizon.

Be it growth, diversification, consolidation, or another element of your business strategy, you should take time to ask yourself this: Is my HR function ready and able to deliver what the business needs?

Even in 2017, many HR functions will continue to do what they have been doing for years and focus on activities that are centred around day to day employee administration such as payroll, policy administration, leave and attendance and so on. They will respond to new requests, such as recruitment, only as and when the need arises rather than take a proactive approach in anticipation of what the business needs.

This is what I would describe as a ‘reactive HR’ function that is likely to be process driven as opposed to driving policy and culture or supporting delivery of the business strategy.

It is unlikely that HR professionals performing in this way will think about, or even question, how they are doing things, or even ask if what they are doing really adds value to the business. They are unlikely to take a lead in finding more efficient or cost effective ways of doing things. But in today’s business environment, isn’t this the expectation of every business?

Indeed, in order to really earn a seat around the leadership table, HR professionals need to think about what value they will add by having a place at that table. What value will this bring for the rest of the business?

It is important to ask yourself ‘what are we doing?’ Are you driving change? Are you identifying new ways of working to reduce costs or introducing new policies or initiatives that will help to engage and motivate employees and ultimately improve performance and productivity? Or are you merely saying yes when you are asked to do something as and when it is needed?

You must also ask yourself ‘are we measuring how well we are doing whatever it is we are doing?’

I recall an experience a few years ago when I was acting as the HR director of an organisation with 3,500 employees. The attendance policy was not effective but when I talked about changing the policy there was no appetite for any change from the rest of the business.

I took it upon myself to carry out a detailed review of attendance and punctuality across the organisation. I gathered data for two consecutive months to see how many ‘man days’ had been lost due to unauthorised absences and lateness. The results were staggering. When I presented these facts to the leadership team they certainly sat up and wanted to listen to what I had to say. This resulted in implementing a new attendance policy that was very quickly signed off by all stakeholders around the table who previously didn’t see the need for change.

This is a simple example of how the HR function influenced the business to drive change by using data that was readily available. By translating the impact of this issue into financial terms, a language of numbers that business leaders clearly understood and could measure, I was able to create the support and appetite for change.

In today’s VUCA [volatility, uncertainty, complexity and ambiguity] environment there is increasing pressure on all businesses to reduce and operate more effectively and thus there has never been a greater need for HR to be more proactive in looking at how to bring value to the business. Be it by reducing costs or increasing productivity, HR professionals across the region need to review what they are doing and ask themselves what they can do better or differently to make a bigger contribution to the business.

As HR professionals, do you know your company’s business strategy and do you know what your role is in delivering that strategy? Or will you be reactive and wait to be told what to do?

My recommendation is to be proactive in reviewing your HR policies and practices in order to streamline processes to drive efficiencies and improve the way of working.

A good example of this is the recent shift we have seen in how some companies are now managing their annual performance management processes. Some organisations have replaced the traditional annual performance management process with more regular informal reviews that focus on an employee’s strength and potential rather than the development areas being the main focus of the discussion. The traditional annual review process was seen as time consuming with little or no value addition so this is now being replaced by a different approach. The new approach is still being tried and tested but what is important to note is that the companies that made the change replaced the traditional method because it wasn’t working for them.

Looking at efficiencies internally within the HR function is a good place to start. It is important to collate data and use HR analytics to drive prudent business decisions. We should start by measuring costs of key HR activities such as recruitment, attrition, absenteeism and the return on investment of training and development as an example.

Let’s consider a scenario in which a company is reducing budgets or cutting costs. Quite often the training and development budgets are the first to be cut but what is the longer-term business impact of this? Are these decisions purely based on short-term cost savings without considering the impact on employee retention, engagement, motivation and capability development? Are the long-term costs to the business greater than the short term savings?

This is where HR needs to provide inputs and insights to the business so that decisions are taken in an informed manner with a view on the bigger picture. HR has a role to play in influencing such key business decisions – not just in implementing them once they are made.

The ability to assess these scenarios will give HR functions a voice at the leadership table, and allow them to influence using a language that carries weight through the rest of the business.

The difference between reactive and proactive HR essentially comes down to two things – foresight and timing. Proactive HR practices involve the planning and implementation of programmes based on analysis of data and trends that help drive the business agenda or at the very least strategically support it.

Ensuring compliance with policies and procedures, timely payroll runs, administering daily attendance and other such tasks are necessary activities, but they are reactive HR practices that form part of the operational running costs without adding any strategic value or impact.

The choice of whether or not to provide that value and impact is in your hands.

Asma Bajawa is the managing director of HR consultancy firm PeopleFirst