HR needs to grab its chance to lead

HR directors must take the lead in rebuilding employee trust and creating a
new work culture that engages staff and fosters innovation if their businesses
are to compete in future.

This was the message from Professor Richard Scase to delegates at Personnel
Today’s HR Directors Club last week.

Speaking aboard HMS Belfast, Scase said HR must demonstrate strategic
leadership if UK organisations are to adapt to compete in a world undergoing
fundamental economic, demographic and geo-political transformation.

One of the key challenges facing HR, is re-establishing the trust staff have
in business – eroded as a result of scandals such as Enron, numerous
pension-fund disasters and increasing cynicism over high rewards for
under-performing directors.

"There is a low trust culture. The attitude is: ‘why should I bother;
if they are pillaging the business, why shouldn’t I?’," said Scase.
"We need to rebuild that trust and rebuild the psychological
contract."

Companies have to operate in a new economic reality of low growth and
increasing competition from south-east Asia.

Scase told the audience that the ongoing uncertainty created by Iraq and the
war on terror contributed to poor-performing stock markets and reduced business
investment.

Consequently, he expects the business landscape to be dominated by
cost-cutting and consolidation, and anticipates increased migration of
financial and business services jobs to India and China as a result. "It
is not just data processing jobs," he said. "Calls centres in India
are moving up the value chain."

Employers must also respond to the UK’s changing demographics, with the
labour market increasingly dominated by women, older workers and ethnic
minorities.

Another challenge for business, said Scase, is finding ways of engaging the
next generation of workers, who are increasingly non-conformist,
individualistic and cynical.

He told delegates they must become more strategic if they are to lead the
change necessary to meet the challenges they face.

HR must lead a redesign of the workplace so that work environments foster
and encourage sociability, and help organisations tap into employees’ tacit
knowledge to unleash creativity and innovation.

"If people are still at the bar at midnight at corporate events, that
is usually [a sign of] a high-performing business," he said.

As part of this organisational change, the Anglo-American business model –
which focuses on short-term results and the bottom line – must evolve into one
where emphasis is placed on long-term sustainable value.

Employers must improve how they manage diversity, create entrepreneurial
work cultures that are fun and engaging, and redesign work practices to provide
more flexibility and choice to individuals.

Scase concluded that businesses which achieve these aims are more likely to
attract and retain the best human capital, and deliver a competitive advantage.

By Ben Willmott

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