HR needs to change to meet business needs. Here’s how

Organisations can deploy four key strategies to alter their employee value proposition in response to the current labour market.
By: | January 11, 2024

The last few years have forced HR professionals to face a tremendous shift in their functions. Technological advances, business model disruption, a new generation entering the workforce and, not to forget, the global COVID-19 pandemic all contributed to unprecedented change in our world of work. While the HR function was required to quickly implement one targeted organisational intervention after the other, HR leaders have recently been asked to shift gears and adapt to changes in employee loyalty and engagement.

A study by KPMG found that over 60% of HR functions are having to alter their employee value proposition (EVP) in response to the current labour market—one where employees look for the right level of flexible work offerings, learning and growth opportunities, and strong benefits. If their current employer does not meet their expectations, they are willing to switch companies for a better fit. Understandably, this requires HR leaders to shift their approach and design strategies to meet this new challenge.

Here are four key ways to accomplish this.

Prioritise the employee experience

Traditionally, the HR function has been rather siloed: There are specific models for training, rewards and other disciplines that all remain in their particular verticals with very few cross-functional opportunities. With data showing that organisations in which HR facilitates a positive employee experience are more likely to report outperformance, it is time to revisit and redesign those models.

Think about the employee as the consumer and HR as the consumer-grade product and experience provider. Rather than operating in silos, HR should be facilitating and coordinating efforts to enhance the employee experience. HR can become the backbone of the employee experience by building unified onboarding processes, leveraging technology to its utmost potential and making it clear—externally and internally—that the employee experience is a vital part of organisational culture.

Putting the employee experience front and centre also means putting resources towards meaningful HR portfolio activities that matter to employees. Consider how HR could strengthen ties with operations and IT to plan and develop a world-class onboarding process or how communications and HR departments together can re-outline and re-present the company’s renewed focus on the employee experience in global employee forums.

Go digital

In the current competitive labour market, outdated processes will ultimately result in challenges for employee motivation and engagement. Returning to the metaphor of employees as consumers, everything HR offers should be at that consumer-grade level: data-informed, seamless and custom to employees’ needs and their desired experience.

Like consumers, employees often respond to experiences—and those experiential feelings are very telling of what employees want, need or crave. Identifying the experiential sentiment that employees are looking for within their current roles and then harnessing technology to integrate those experiences into workflows and processes is key to employee satisfaction and retention. This is about more than just hanging onto top talent, though that is important; it is also about building relationships between HR and employees to shape and drive training and internal improvement efforts.

Deep analytics and AI offer an evolving frontier where HR functions have the opportunity to help their organisations keep pace with digital transformation. Taking advantage of new, leading technologies is not necessarily about requiring everyone in HR to know how to code, but they do need to be able to leverage the systems and digital capabilities available to them to make data-driven decisions. Maintaining a solid digital backbone—moving forward, increasingly augmented by AI—will elevate HR leaders’ core skills and the HR function’s contribution to their organisation.

Apply agile practices

Since 2012, the concept of agile HR has been employed to support HR leaders in managing volatility and enhancing organisations. Although the concept itself may not be new, an agile HR department now looks a bit different than one from over a decade ago, and HR leaders need to be poised to pivot based on this.

At its core, the agile HR approach is focused on being able to better adapt to shifting priorities while engaging employees. The aim is to enhance their self-motivation and encourage long-term collaboration. Again, let us think of an employee as a consumer and HR as a service provider: The more agile and well-prepared HR is for any sort of crisis or roadblock, the more confidence employees will have in the HR function’s ability to serve them well. Through the agile HR approach, employees have access to a myriad of opportunities to learn and stretch themselves independently of a specific job-related task or goal.

Provide candid guidance

A truly effective HR team will act as a conduit for the employee voice, from the individual to the C-suite, even if it is hard to discuss. HR needs to develop a rapport with leaders that helps them realise the benefits of the people function as a strategic partner; this is essential for the future success of organisations.

While there might be limitations in ensuring the C-suite’s collective mindset toward their work, HR professionals can support leaders to embrace and lead organisational changes; they are the ones with a pulse on the workplace and its employees and can quickly and easily convey their perspective on employee engagement and retention odds—often backed by data and statistics.

READ: Why culture is still king when it comes to HR challenges

The future of HR is one devoid of silos, focused instead on cross-functional work and impact that stretches as far and wide as the C-suite and every team leader. For the HR function, the future revolves around employee engagement and retention that deliver business results. To make that happen, HR professionals are required to use digital and agile methods, leverage AI, and work closely with organisational leadership to serve employees and ensure they know what employees need to run at their personal best.

About the author: Christian Schmeichel is SVP and Chief Future of Work Officer at SAP, where he is responsible for the software company’s Future of Work agenda. This article was first published in Human Resource Executive.