Recommendations on how to shift your HR department from a reactive to a proactive HR Function in 2017

As we settle into 2017, many businesses will be gearing up for new opportunities and challenges. Be it growth, diversification or consolidation, whatever your business strategy, take time to ask yourself this: Is my HR function ready and able to deliver what the business needs?

Even in 2017, many HR functions will continue to do what they have done historically for many years and focus on activities that are centred around day to day employee administration such as payroll, policy administration, leave and attendance and so on; they will respond to new requests, such as recruitment, only as and when the need arises rather than take a proactive approach in anticipation of what the business needs. This is what I would describe as a ‘reactive HR’ function that is likely to be process driven as opposed to driving policy and culture or supporting delivery of the business strategy. It is unlikely that HR professionals performing in this way will think about, or even question, how they are doing things, or even ask if what they are doing really adds value to the business. They are unlikely to take a lead in finding more efficient or cost effective ways of doing things. In today’s business environment, isn’t this the expectation of every business?

So what do HR professionals need to think about to gear up for 2017?

To really ‘earn’ a seat around the leadership table, which many HR professionals believe they should have anyway, we need to think about what value we will add by having a place at the leadership table. What value will this bring for everyone else around the table i.e. the rest of the business? Let’s ask ourselves what are we doing? Are we driving change? Are we identifying new ways of working to reduce costs or introducing new policies or initiatives that will help to engage and motivate employees and ultimately improve performance and productivity? Or, are we merely saying yes when we are asked to do something as and when it is needed? And finally, we must ask ourselves, are we measuring how well we are doing whatever it is we are doing?

I recall an experience a few years ago when I was acting as the HR Director of an organisation with 3,500 employees. The attendance policy was not effective but when I talked about changing the policy there was no appetite for any change from the rest of the business. I therefore I took it upon myself to carry out a detailed review of attendance and punctuality across the organisation. I gathered data for two consecutive months to see how many ‘man days’ had been lost due to unauthorised absences and lateness. The results were staggering. When I presented these facts to the leadership team they certainly sat up and wanted to listen to what I had to say. This resulted in implementing a new attendance policy which was very quickly signed off by all stakeholders around the table who previously didn’t see the need for change.

This is a simple example of how the HR function influenced the business to drive change by using data that was readily available. By translating the impact of this issue into financial terms, a language of numbers which the business clearly understood, and which could be measured, I was able to create the support and appetite for change.

In today’s VUCA environment there is an increase in pressure on all businesses to reduce and operate more effectively and thus there has never been a greater need for HR to be more proactive in looking at how to bring value to the business. Be it by reducing costs or increasing productivity, 2017 in my opinion, is a year in which HR professionals across the region need to review what they are doing and ask ‘what can we do better or what can we differently to improve the way we work and make a bigger contribution to the business?’
As HR professionals, we should ask ourselves, have we understood the business strategy and do we know what our role is in delivering that strategy? Or will we be reactive and wait to be told what to do?

My recommendation for 2017 is for HR professionals to be proactive in reviewing their HR policies and practices in order to streamline processes to drive efficiencies and improve the way of working. A good example of this is the recent shift we have seen in how some companies are now managing the annual performance management processes. Some organisations have replaced the traditional annual performance management process with more regular informal reviews that focus on an employee’s strength and potential rather than the development areas being the main focus of the discussion. The traditional annual review process was seen as time consuming with little or no value addition so this is now being replaced by a different approach. The new approach is still being tried and tested but what is important to note, is that the companies that made the change, replaced the traditional method because it wasn’t working for them.

Looking at efficiencies internally within the HR function is a good place to start. In 2017, it will be important to collate data and use HR analytics to drive prudent business decisions. We should start by measuring costs of key HR activities such as recruitment, attrition, absenteeism and ROI of training and development as an example. Let’s consider a scenario in which a company is reducing budgets or cutting costs. Quite often the training and development budgets are usually the first to be cut but in doing this what is the longer term business impact of such a decision? Are these decisions purely based on short term cost savings without considering the impact on employee retention, engagement, motivation and capability development? Are the long term costs to the business greater than the short term saving? This is where HR needs to provide inputs and insights to the business so that decisions are taken in an informed manner with a view on the bigger picture. HR has a role to play in influencing such key business decisions not just in implementing the decisions once they are made. It is HR’s ability to assess these scenarios that will give us a voice at the Leadership table and allow us to influence using a language that carries weight through the rest of the business.

The difference between reactive and proactive HR essentially comes down to two things – foresight and timing. Proactive HR practices involves the planning and implementation of programmes based on analysis of data and trends that help drive the business agenda or at the very least strategically support it. Ensuring compliance with policies and procedures, timely payroll runs, and administering daily attendance for example, are all necessary activities however these are reactive HR practices that form part of the operational running costs without adding any strategic value or impact.

Is your HR department proactive or reactive? The following questions should help you to assess your current situation and steer you into a proactive direction giving HR professionals something to think about in 2017?

Ask yourself:

• When was the last review of the company’s HR policies? Are HR policies up to date with legal requirements and market/HR best practices?
• Does my organization have a succession plan in place for all critical jobs / top levels jobs in the organisation?
• Has the 2016 performance cycle been completed?
• Has the organisation set and cascaded the business objectives for 2017? Are all employees working towards the business strategy?
• Which function/department has the highest productivity return?
• Which function/department had the highest increase in productivity return over the past 24 months?
• Are the 2017 pay increases and bonus payments linked to 2016 performance?
• What was the company employee engagement score in 2016? What is the ‘mood’ in the business?
• What is the HR budget for 2017 (training budget, salary budget, restructuring budget etc…)
• Is there a link between the current organisation structure and business objectives?

If you have questions or need help with transforming your HR department from a reactive to proactive function that is aligned to your business needs, contact us:

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