Shortly before the beginning of 2020, I dealt with the question: When will strategic HR come and close the evidence gap? A few weeks later, Covid 19 overshadowed (almost) everything. Nevertheless, there is increasing pressure on human resources to develop from an operational, administrative function to a strategic, transformational function in the company.

Today we know: Due to the pandemic, which unfortunately still dominates our everyday life, there were significantly more opportunities than risks for HR. The speed with which business models are changing across all industries as a result of digitization is increasing rapidly. Many of us have paid increased attention to our workforce: What do managers, teams and employees think and feel? What problems did the employees have when switching to virtual work? Where does communication fail most often? Which new tools and technologies do we need in the home office?

Looking ahead to the new year 2021, I don’t want to get lost in the countless trends and challenges below – a lot has already been written and posted on this – but rather sketch the “longing for the wide, endless sea” (freely based on Antoine de Saint-Exupéry ).

In the end, it’s about adding value …

As important as HR is; in the end, HR is not about HR, but about results:

  • With digitization and automation, jobs are becoming superfluous, and new job profiles are emerging at the same time.
  • “New Work” is not only associated with more freedom for creativity, self-determined action, flexibility in work organization and time, but also with greater commitment and higher productivity.

Who are the HR customers? In addition to investors / owners (market value), there are regulators (social responsibility, regulation), partnerships (depth of added value, outsourcing) and external customers (CX management, applicants). In the case of internal customers, a distinction is made between employees (productivity, competence) and managers (strategic value contribution).

Value can be created for these stakeholders on an individual and organization-wide level; here are some examples:

  • Developing the IT skills of the workforce: training employees to use new technologies, providing communication / collaboration tools and cloud solutions.
  • Establish hybrid work models and digital workplaces: Remote work has many advantages for employees, hybrid work lowers operating costs.
  • Retaining skilled workers: promoting strategic personnel planning with the involvement of Total Workforce Management, promoting retention programs, developing managers – also with a view to communication, management style and culture.

… based on culture

A central task of HR is the development and maintenance of the employability of employees. For this, self-responsible action, network-like cooperation and individual working conditions are necessary.

Digitization and automation are generally positive and helpful. But the truth also includes that automation and technological progress can also have negative effects, such as loss of data protection and confidentiality or less manpower, especially for low-skilled employees.

Culture change therefore means:

  • Without a massive change in corporate cultures, digitization will only succeed to a limited extent.
  • Working quickly with positive energy as well as high dynamics and a culture of trust are essential.
  • Agile methods such as Scrum and Design Thinking “fuel” the cultural change.

Between culture and value creation resp. corporate success there is a causal relationship – so much for statistics:

  • Above-average high-performing companies already have a strong corporate culture in their DNA and use this solid basis, such as the self-competencies of the employees in flexible structures, the use of agile methods and the exemplary behavior of top management.
  • Less successful companies show weaknesses in cultural development. This applies in particular to the aspects of exemplary behavior of top management, positive energy and high dynamism in the company, use of agile methods as well as leadership with vision and inspiration.

Here are some examples of the effects of culture on stakeholders:

  • Employees: attracting key talent, engagement, productivity / expectations,
  • Organization: strategic focus (core competence),
  • Client: corporate identity / reputation, culture as an internal manifestation of the corporate brand,
  • Investor: Intangible asset that investors value over time, part of the Leadership Capital Index.

In the working world of the future, people will make the difference. High performance resp. value creation needs freedom, a culture of trust creates positive energy.

“HR: disrupt yourself”

Today empathy, diplomatic skills and networking top the list of key skills in human resource management.
In the future, skills in big / smart data and workforce / people analytics as well as the willingness to experiment will become massively more important. At the same time, network skills develop into by far the most important skill. Strategic and visionary thinking are also given much more weight than they are today.

For HR, it is a matter of taking a forward-looking and exemplary approach in all disciplines of digitization and the agile working world and focusing more on the experience of employees in the company, the so-called employee experience.
HR needs a clear self-image to be able to act as a visionary and strategically strong enabler.

The effects of the Corona crisis on corporate development and the workforce are increasing the pressure on HR work to support the management of the crisis and to drive forward the company’s transformation after the crisis.
In addition to digitization, however, the current economic situation of a recession with an accompanying trend towards de-globalization and social developments such as social distancing, personal security and political regulations have an impact on the business models of companies.

According to Kienbaum and SAP, these developments are ultimately reflected in five key changes for companies and HR:

  • Leadership: Radical change in management culture towards empathy, compassion, understanding and listening.
  • Agility: Accelerating agile, flat, open and self-organized networks.
  • Virtual work: increase in remote work.
  • Digitization: Acceleration of the “Future of Work” and the digital workplace, integration of AI above all in recruiting [more] – in compliance with digital ethics.
  • HR Transformation: Accelerating the transformation from HR to a strategic partner in business and towards (employee) experiences (diagnostic tool!).

The changed understanding of the role of HR as a designer of the digital transformation requires that it must dedicate itself to more strategic tasks in the future. However, the scalability of the function is limited, because HR also has to make its contribution to increasing company’s margins. Therefore, the digital HR transformation is of crucial importance. Core processes and support processes must be consistently optimized using intelligent technologies.

When it comes to the provision of products and services, it is crucial for HR to adapt their structures in order to be able to optimally use the digital potential. Digital technologies and changed requirements of the workforce and organization in terms of HR influence the selection and sharpening of a suitable operating model.

Conclusion

HR urgently needs a future-oriented vision, a target image, as a guideline for the inevitable reorientation in the coming years.

Areas of activity that hold considerable potential for improvement are:

  • Workforce analytics for more informed personnel decisions,
  • HR technology management for more efficient working methods,
  • Culture and leadership development for more effective work with digitized business models, as well as
  • Work organization for a more flexible and quicker execution of tasks.

On average, only around 20 percent of the resources are still available for strategically relevant topics, whereas over 40 percent are used for personnel administration and highly operational support processes; the core processes alone, with 40 percent of the capacities, are adequately staffed on average. Even if the support processes are absolutely necessary, they do not contribute positively to the growth of the company and thus to the added value. Personnel functions are therefore well advised to differentiate between transformational and transactional services and to prioritize value-adding processes in resource allocation and to increasingly map standardized processes and routines using intelligent solutions and / or outsourcing concepts.