HR to play a role in organisational health

by 11 May 2009

CEOs increasingly expect HR leaders to play a major role in improving organisational health through factors such as sustainability, culture and values, according to the Chartered Institute of Personnel and Development (CIPD).

“This is not just about looking after the people who work in the organisation,” said Mike Emmott, employee relations adviser for the CIPD.

“It is also about longer-term performance and sustainability … and may also mean HR bringing an independent voice to the table.”

As HR is part of the management team, Emmott said it needs to be able to stand back and consider the longer-term interests of the organisation.

He also said HR leaders clearly have a big job to do in helping organisations deal with the effects of recession.

While issues about handling redundancies and reducing costs are uppermost in managers’ minds, Emmott said the way that organisations are handling the economic downturn this time is very different from the last recession in the 1990s.

“Then, employers rushed to see how many compulsory redundancies they could declare, in order to get across the message to investors and others that they were taking a properly rigorous approach to controlling costs,” he said.

“This time round, employers have been slower to make people redundant, preferring to wait until it is absolutely clear that this is necessary. They have instead been freezing recruitment, offering sabbaticals and in some cases either freezing or reducing pay.”

Unwelcome as some of these options are, Emmott said they have often been accepted by employees and trade unions as less damaging than redundancy.

“This suggests that HR leaders of the future will have a strong platform from which to assert the importance of handling people issues with care, in bad times as well as good,” he said.

“This will be critical to retaining the confidence of the workforce so that the organisation can benefit from the recovery when it comes.”

In the future, Emmott said there will continue to be a range of specialist areas such as reward, employee resourcing and employee relations that will offer opportunities to HR people who may fail to progress up the HR career ladder.

“Such roles can be both worthwhile and rewarding and no stigma should apply to those who take them on,” he said.

HR professionals can usually earn the respect of colleagues by ensuring that HR systems and processes are functional and provide an effective and economical service to internal customers, according to Emmott.

However, the longer-term trend in larger organisations is for this to be done through shared HR service centres, either in-house or contracted out.

“The job required of HR leaders is increasingly to be strategic and adopt a wider business perspective,” he said.

“Most senior HR professionals fully accept this, and CEOs certainly expect their HR director to be business-savvy and understand the commercial and financial issues with which colleagues are grappling.”

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