In many ways, the last several years have emphasized the critical importance of HR leaders and the function. As businesses across industries adapt to widespread change management initiatives and digital transformations, HR is tasked with upholding traditional responsibilities in addition to offering up emerging innovations in the field. For HR leaders who are responsible for developing organizations, effective, sustainable change can only result from a transformational journey at both the individual and functional level.
We recently spoke with more than 60 Chief Human Resource Officers (CHROs) and over 300 senior HR leaders worldwide to explore the dual developmental journey of the HR leader and the function. The conversations focused on the complexities of the role, including the impact of COVID-19, what it takes to enable transformation, redefining the operating model, and what the HR leader of the future might look like. What follows are our key findings.
The job of HR leaders has become increasingly important, challenging and complex. The classical and fundamental expectations of HR—talent management, team development, performance management, organizational design, etc.—still exist, but the skills needed to navigate those responsibilities are now more varied. In sum, our ever-changing world will require HR leaders to adapt, learn new skills, and develop new capabilities.
A major area of focus is digitalization, which has emerged from advancements in technology, embracing digital learning and an increased focus on organizational management and efficiency. This shift underscores the need for HR talent to have the ability to navigate a variety of complex digital solutions.
Diversity, Equity and Inclusion (DE&I) has also taken center stage and will require its own set of innovations from HR. With various social movements at the forefront of public attention, and certain inequalities being further exacerbated by the pandemic, this will continue to be a major priority for businesses.
The elevation and integration in the areas of diversity and inclusion will be really important. A lot of places have it as a sub-function somewhere under talent, but those were the old days—and today that would be a mistake.– Senior HR Leader, Multinational Company
HR will need to play a pivotal role here, with innovations also concerning the entire C-suite and board. Perhaps the key will be reframing DE&I as less of a box to be ticked, and more of a best practice grounded in the desire for sustainable growth in an increasingly socially aware environment.
There is also an increased focus on employee mental health, highlighted in large part by the conditions brought about by COVID-19. Anxiety and fear naturally heightened as the pandemic wore on, as well as feelings of burnout, with many remote employees working harder and longer over the last 18 months as the lines between work and home became increasingly unclear. Mental health will need to be a serious priority for the next generation of HR leaders. “It may also be poised to be the next silent epidemic,” shared one leader of a prominent multinational company.
In addition, there are expectations that the CHRO be a more visible public figure, ranging from engaging employees on social media to interacting with the press. “There’s a component of reputation management—companies are now expected to have a voice on external issues,” one HR leader notes. This increased visibility of the CHRO also extends to the board. CHROs are not just expected to attend remuneration committee meetings. They present to the full board on talent management, culture change, and sustainability. With heightened external attention on these topics, board members are turning to their CHROs for guidance and input.
Lastly, HR leaders are expected to play a more prominent role in enabling cultural transformation, which often coincides with the appointment of a new senior leader, a change in business strategy or a business development acquisition. While the HR function doesn’t “own” culture, it can provide a strategic framework for how the CEO and Executive Committee can influence a company’s culture over time, especially through people strategy–whom you promote, what you reward, leadership behaviors you develop, and the decision-making power of the organization design you choose. In addition, policy decisions on engagement channels, working practices and working environments all shape an organization’s culture and the HR function is often in the center of that.
However, despite all the demands made upon HR leaders and the function itself, there remains a gap between what an organization needs and how much it’s willing to invest in HR development. But for leaders to be effective in these expanding roles, resources must be dedicated to developing and recognizing HRDs as leaders in their own right. Reflecting on the challenges and massive amount of rapid transitions HR leaders have had to manage over the last 18 months, the pandemic could be a catalyst for rejuvenation for both HR leaders and the function.
While transformation and technology are often synonymous, even more important is the human component, and leaders are increasingly focused on implementing digital solutions in a way that empowers their employees.
From remote hiring and onboarding, to virtual coaching, to supporting remote and hybrid work through new systems, all of these need to be considered with people at the core. “A lot of tech is about enabling the HR function, and we need to go farther—let’s forget about enabling the function and [focus on] enabling the humans,” says an HR leader of a multinational company.
Somewhat paradoxically, amplifying the human component of the HR function will likely be achieved by adopting emerging digital technologies. What HR leaders and talent need now is to cultivate a healthy relationship with technology and understand that its aim is to empower human functions rather than just to replace or eliminate them. Ultimately, these tools are only as effective as they’re directed to be by humans who understand the functionality and how to leverage it in the context of unique objectives. And because the potential applications of new technologies are so broad—and continuously expanding—HR leaders need to retain and acquire talent with both the brain power and curiosity to master and adapt to various digital solutions and virtual environments. They must also separate the hype of technology from what they actually need to carry out their HR strategies.
How do we make sure that we integrate technology in a very human way—these are people processes, and they need to stay people-centric. So, how do we make sure that we make those interactions that people have whether it’s online or in face-to-face or in conversation, always feel human, authentic, engaging?– Senior HR Leader, Telecommunications Company
Rather than seeking out specialists to manage isolated programs, HR leaders are increasingly interested in highly motivated, intellectually malleable generalists who are comfortable navigating myriad technologies and assuming different roles as needed.
Most of the leaders we spoke with believe that the HR function is behind the curve in digital transformation and that now is the time to start playing catch up wherever possible. In addition to acquiring new technologies, this means cultivating an environment that empowers both existing and potential talent to constantly grow and develop new skills as the HR function inevitably evolves over time. This might entail more collaboration between HR and tech teams, or businesses generally taking a more holistic approach to the application of digital solutions across all functions within the organization.
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As the HR function shifts to reflect the evolving nature of society and the workplace, the traditional operating model of Centers of Excellence and HRBPs is gradually becoming less effective for some organizations. “I’m not sure that model is flexible enough for today's world,” says an HR leader of a telecommunications company, “so I think we will see an evolution of that model to one that is more centered around the employee journey.”
For one thing, the siloed structure of the model runs counterintuitive to the growing emphasis on connectedness, company culture, and employee experience. Now more than ever, businesses want effective, well-rounded HR teams rather than those consisting of isolated experts, and one of the primary obstacles to achieving this has to do with how roles are assigned within the traditional model.
The role of HRBPs, for example, has been greatly complicated by shifting expectations in the field—particularly as a consequence of COVID-19. Because remote and hybrid work arrangements are almost entirely new, at least at the scale being witnessed today, there are no truly qualified experts to address the various challenges that can arise. And with not all employees returning to the office, how can HRBPs continue to make sure people are feeling positive, connected, and oriented toward continued development. As one leader of a multinational company points out, “They will need a lot of innovation to replace walking the halls.”
For many, this raises even bigger questions about the future of the HRBP role at large, as well as the adoption of new operating models altogether. Of course, it isn't as simple as doing away with the old model entirely, as demands for innovation don’t negate the need to preserve critical processes, nor do they promote the defiance of classical expectations.
We have the classic structure, with business partners and centers of expertise, HR operations, [but] we have to bring those teams together much more in order to operate with more pace.– HR Leader, Fortune 500 Company
The key, many leaders believe, is becoming more agile and adaptable to change, cultivating and mobilizing dexterity at the level of both the individual and the organization. Some organizations are experimenting with new, more fluid structures focused on “moments that matter” that center on the employee journey.
What makes the demands on HRDs so different today is that there is no one-size-fits-all model to address them. This has led not only to the springing up of new roles, but also entire departments. New teams under the umbrellas of “company culture” and “workforce upskilling” will likely emerge due to the need to optimize employee experience as well as the novel ability of HR Ops to aid organizations on the business side through enhanced technological capacities.
The key takeaway here is that universal best practices aren’t nearly as reliable as they have been in the past. For effective change to happen, HR leaders will have to zoom-in on the culture of their own businesses, tailoring their operations around solutions related to their unique business strategy, objectives, and capabilities.
Given the heightened complexity and evolving demands of the role, how do we prepare the next generation of CHROs to meet these challenges and lead successfully? One part is the necessary technical skills to do the job, a second is personal traits—humility, sound judgment, courage, determination, dexterity, curiosity—and a third is broader leadership competencies, such as shaping strategy, influencing collaboratively and driving change. “What I want from my team is a big sense of curiosity,” says one HR leader. “This prolonged crisis management has made them increasingly inward facing, and we need to equip them with an internal radar.”
Considering the versatility being asked of HR talent today, it’s critical that the conduct and performance of leadership are mirrored down throughout the organization. An effective leader’s behavior needs to be a reliable point of reference for their talent, whether it pertains to the confident performance of daily operations or in navigating rare moments of crisis management with strength and flexibility. It’s about being able to demonstrate commitment through action, not just words, and there remains important work to be done not just at the level of occupation, but also at the level of identity.
This is particularly true for HRDs today. Leaders need to be proficient in their management of both employee experience and business expectations. They need to build on the traditional profile of HR talent with a new emphasis on dexterity when it comes to skillsets; and curiosity and determination when it comes to addressing the human element.
It starts with intellectual firepower—it’s about being a good communicator, having nuanced judgment and wanting to understand what is going on in the business... then it’s having the confidence that you can add value.– CHRO
To ensure they are set up for success may require deeper development of CHROs. Considering their central role in transformation initiatives, navigating technological change, cultivating empathy and perspective on mental health and well-being, and more, HRDs would benefit from a more concentrated investment in their own transformative leadership. “I took myself and my HR Leadership Team through an individual transformational journey before we could help the organization transform its culture and business model. We role-modeled what we thought needed to happen elsewhere in the company,” said the CHRO of a leading global life sciences company.
The idea of transforming oneself to transform the organization is a sentiment that also rang true in a recent global survey of nearly 1,000 CEOs. There was near unanimous agreement that there is a dual journey—a path where leaders believe viewing their personal development and their organization’s growth as an interrelated journey will affect optimal change. This is no different for HR leaders—to create the organizational transformation that is being sought, HR leaders will need to start within themselves.