Published by MBA Skool Team, Published on October 04, 2012
After going through so many books, journals, articles, interviews etc. on HR Management and related topics we will agree on one thing for sure- the role of HR managers in the modern world has changed (or is changing) from merely being a support service provider to a strategic partner. Many reputed organizations like HUL for example are opening the doors of their coveted board room for top-notch HR managers.
Today’s HRs are expected to contribute significantly in the top level decision making and execution by devising HR strategies which are in positive alignment with the overall organizational strategies. For all this it is very important that HRs understands and speaks in the language that top management knows. But sadly, rarely do we talk about the skill set and knowledge that behavioral experts need to build or acquire to satisfy these changing expectations.
What is strategy? What are the domains that I am talking about? I will try to answer these questions first and then will gradually move towards the need for their integration with HR functions to make them more effective.
Domains that I have been referring to apart from HR are finance, operations, marketing and IT. In my opinion, fundamental knowledge of all of these is very important to further improve the working of HR machinery in any organization. Strategy in simpler terms means any plan of action or activity devised to achieve a long term objective.
Truly as broad as the definition looks making an impactful strategy in itself require a thought process which considers the economic or monetary viability and operational efficacy of raw ideas. And yes how can we forget that selling any potential idea especially to convince the elite brass requires great marketing skills.
Even if we leave the strategic part and come to the middle level tasks performed by HRs we will observe requirement for the same needs. For example to recruit the most suited candidates for any job positions the first step would be to attract them towards applying for the job. And for that it is important that you advertise the job and organization in the most attention drawing and appealing manner. Here comes your true marketing talent into picture. Just we take a step back we will find the phase where human resource planning would have happened to predict the number and type of employees required to match the available job requirements.
Again an ideal HR manager with the apt financial skills would select a target location and segment to search after weighing both projected cost to be incurred in the whole process and expected earnings from the recruits in future. In some exceptional cases whole process for one candidate’s successful recruitment can also be seen as a sub project, where one can allocate individual share of cost to each prospective recruit using appropriate cost allocation method. Then taking help of HR knowledge can approximate future contribution of candidate based on comparison of his behavioral and technical abilities with past similar data to calculate the net present value of the ‘sub project’.
The most positive NPV sub projects should be accepted for most cost efficient and effective recruitments. This model will be successful when one is looking to fill prime level management vacancy where the cost of selection is high and the prospective candidates very less. Let’s build on the above points and complete the whole cycle.
After recruitment the next major role performed by Human Resource executive is to train the newly recruited employee so that he acquires both technical proficiency specific to his role and inherit culture of the organization. To have it in optimized manner, one needs to plan batches and prepare monthly, quarterly or annual calendar of training based on forecasted demand for the training programs, availability of faculty and available resources like software licenses available or hardware machinery available etc.
Wait a minute let’s get back to the basics of operations management, isn’t all this look analogous to designing the operations of a process and effectively managing the resources at hand to get maximum quality output by using minimum resources. If we flip through the marketing manuals isn’t estimating the demand for a training program quite similar to forecasting the demand for a particular product, after all training programs are products only contrived to meet the needs of internal customers.
When you are dealing with expensive resource requirements mentioned above you need to again apply all those financial models you learned or rather should have learned during MBA to find which method would be most profitable to your department. Like buying or getting them on lease. Again for quantifying the benefits of training one ought to have a solid grip on the various financial theories and models.
These models can always be modified to suit the behavioral measurements but for that one needs to have at least the elementary know-how about them and their use. Although I agree the exact monetary benefits out of various HR initiatives can’t be calculated at present. But for sure an approximate figure or at least a range can always be determined with surety. This is good enough to sensitize top management about the efficacy of such programs; I can say that with confidence based on my internship experience.
Performance management requires reviewing employee’s performance against preset goals and benchmarks which leads to determining compensation where again HRs have to think from the perspective of finance manager. He has to determine the right salary hike and other non-monetary benefits to be paid keeping a balance between the requirements of both the organization and the employee. The employee must not be underpaid and the organization should be paying less than the contribution of the employee to be profitable. Even during change management HR needs to create enough motivation and urge for change in the mind of employees. This can only be done by selling the benefits of change. How the change is going to be advantageous for the employee? Why is there a need to leave the present stage? Answers to these questions and many more need to be publicized appropriately.
Everything discussed till now makes sense but why do HR professionals need to have IT skills? Well this same question was there in my mind too when I was studying subject on ‘IT for Managers’ in my first trimester. The confusion got cleared during the course of my internship period when I had to analyze 13,000 + entries of training related data to find out information like most in demand training programs, most profitable programs, locations from where most nominations for training programs came, which business unit was preferring which training program the most and so on. Data tables, pivot table, data validation…..everything came in to use. It would have surely taken me another year and half for those analysis (with no guarantee of accuracy) if I would not had been aware of all these excel functions. Even while presenting the findings in concise and attractive manner simpler features like data bars, pie charts and dynamic dashboard were of great help to catch the attention of senior managers. Isn’t it how one presents the food on platter many times differentiate a road side cook from a chef?
Above just an overview of few important HR roles were covered to support the assertion in simple and understandable manner. When one will go deeper into the other complex HR functions he will find the same requisites present everywhere.Today’s organizations are looking for managers who can act as one stop shop to find befitting solution to inseparable multi facet HR issues faced by them on frequent basis. Cross domain knowledge is the need of the hour for the 21st century HRs.
What we see today are CEOs who are finance experts or marketing gurus or in some cases operations heavyweights possessing basic knowledge about people management. Whereas foreseen future for taking a multi business organization like Reliance, P&G or L&T to never before seen heights requires accomplished behavioral experts with fundamental knowledge of all the other domains. After all it is the people who finally drive critical operations in an organization and not the other way round.
Since nothing much has been written about the discussed topic let’s build a literature of our own through information sharing. Please write to me your experiences and views related to the theme of this article.
This article has been authored by Vibhav Kardam from IIM Shillong.
Views expressed in the article are personal. The articles are for educational & academic purpose only, and have been uploaded by the MBA Skool Team.
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