HR functions are taking a long-term, strategic approach to growing the value of their people – and the challenges of Brexit are increasing their influence – according to research carried out by the Institute of Employment Studies and the CIPD.
Through in-depth case studies of four employers, IES and CIPD researchers looked into whether managing people was sufficiently forward-looking or more about driving down costs and increasing shareholder returns.
Head of HR consultancy Duncan Brown concluded that “the heart and the soul of people management seems very much alive and well”, with HR increasingly integral to business strategies and their delivery.
The challenges posed by Brexit – such as sourcing and retaining labour, monitoring potential changes to employment legislation and managing change – have contributed to an increase in prominence for the HR function, the report concluded.
Medium to long-term workforce planning, as well as analysing skills needs and numbers for future staffing, have become more common and important, it added.
As employers recognise how the performance of their organisation contributes to the national economy, there’s also a stronger focus on diversity and employee health and wellbeing.
This approach extends to the role HR policies play in supporting employees to “live” a positive organisational culture and espouse its values.
Brown said: “The heart and the soul of people management seems very much alive and well in our case study employers, with the organisation’s purpose, values and culture being an integral part of business and HR strategies.
“This explains the focus we found on employee wellbeing and developing appropriate leaders and leadership behaviours. But HR leaders need to be politically savvy, flexible and tactical in how they pursue and deliver on their long-term vision of building an engaged, high performance organisation.”
The four employer organisations in the research are the Ministry of Housing, Communities and Local Government, the London School of Economics and Political Science, housing group Anchor Homes and pub chain Revolution Bars Group.
Three out of the four had a defined strategic people management plan, although it was called different things in different organisations. For all of them it was important to prioritise goals and show results, rather than develop “excessively lengthy and overly-ambitious HR strategies [that] have bedevilled the function and given HR a bad reputation”.
The IES/CIPD researchers also identified a number of key capabilities HR professionals need to maintain this strategic contribution including: clear prioritisation of goals and effective metrics to track their delivery; managing the balance between short-term activities and longer-term policy goals; embracing an effective HR operating model; and building line managers’ skills to manage and communicate effectively with their teams.
Edward Houghton, head of research and thought leadership at the CIPD, said: “In uncertain times we know organisations must look to their strengths and invest to survive. This research showcases some fascinating data as to how HR functions are responding to the challenging context, looking at their medium and long-term plans and developing their capabilities for the future.
“It is hugely insightful to see HR functions in this research looking beyond their traditional stakeholder groups to explore their impact in a more holistic way. This appears to be clear recognition of the growing strategic value of the function, and the ongoing role it must play through the challenging times ahead.”