Modern trends in human resource management require that human resource (HR) be run like a business. In order for this to be achieved, there is need to get a clear picture of the core business of the organisation. What is being referred to here is not the business arrangement that exists between two commercial entities. However, one similarity that can be drawn from the arrangement is the reference to customers.
Column by Paul Nyausaru These customers include both external and internal customers. In this instance, HR internal customers are all the divisions and departments in the organisation. External customers would include other commercial or business entities having business dealings with the organisation.
In this concept, the HR function is called upon to provide quality service just as in the case of business entities. HR is therefore expected to understand HR issues from the perspective of both the employer and employees.
Until HR professionals realise this and take the necessary steps to understand the business their organisation is involved, they may continue to have a “business as usual” approach. The name change to human resource department may not have involved actual change from being a personnel department. The HR department continues doing the day-to-day administrative activities performed by the personnel department.
Nowadays, investors look for many things in an organisation. One of the things is to see whether the organisation has sound HR policies, apart from its strong financial standing.
This also includes determining how well the organisation has embraced corporate governance principles, the effectiveness of the organisation’s leadership and the rate of staff turnover. If these are lacking, investors will know that HR plays an insignificant role in the organisation.
Investors may conclude that a weak HR department means inability to find and engage the talents needed to run the organisation within an increasingly competitive business environment.
How then do we go about making the HR department a business partner? There is need to engage financial experts from within the organisation. The reason for their engagement is to make them assist employees get a clear understanding of the business of the organisation.
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They will also act as your internal experts to assist you implement this approach. These “internal experts” can demonstrate how each job contributes to the achievement of the overall strategic goals of the organisation.
It may also be prudent to engage external business consultants to help explain the connection between the organisation’s core business, departmental functions and employees’ jobs. The external business consultants are there to explain what it means to run an organisation as a business. They are also there to explain how every employee can become a partner in business.
HR personnel also attend these sessions in order for them to better understand how the HR function is closely connected to the business goals of the organisation. This facilitates better planning whereby the HR function will be able to align HR activities which will assist in achieving the overall goal of the organisation.
In this way, HR will enhance its image as being necessary and relevant to the organisation’s survival. When HR is invited to participate in top management decisions, then it will know that it has begun the journey on the road to being a strategic partner.
What then does HR being business partner mean? Being a business partner means that HR personnel, its processes and practices are in smooth operation with the other functions in the organisation.
HR needs to get an overall view of the entire organisation and how each of the different divisions and departments fit into the whole picture. HR people would have to get a clear understanding of the activities carried out under the different departments of the organisation.
This information is crucial for planning purposes. For example, HR can strategise recruitment exercises, identify the right training to take care of existing or new skills needs, come up with effective compensation and benefits plans, and formulate incentive schemes.
- Paul Nyausaru is Human Resources Practitioner. Views contained in this article are personal. You can contact him on email [email protected] or [email protected]
