HR has traditionally been known as the ‘people’ function. The idea of HR as a department that manages employees dates back to the industrial revolution, and when humans were first employed in factories. In comparison to other business functions such as accounting or marketing, HR has historically focused on workers. HR departments have played a key role in hiring, training, and managing employee relations. As an increasing number of companies adopt an agile methodology and become more software-centric, however, HR is no longer the primary point of contact for employees. So, does this mean that HR is an outdated term? And does it also mean that we should abandon the idea of a separate people function? We explore the differences between HR and OD, or the ‘people’ function; whether HR is still relevant; and how to strike a balance between technological support and human resources.
HR: a department for people or for processes?
It’s important to consider the original definition of HR. The HR department was created to manage the people and processes within the organisation. It was set up to ensure that the business is compliant with employment law, that it adheres to best practices, and that employees are engaged and happy. HR departments have also traditionally conducted exit interviews to find out why people are leaving. This data is then used to inform company strategy and help leaders improve employee satisfaction. As technology has advanced and more startups have adopted agile as their methodology, HR departments have had to adapt. HR employees are now more focused on processes than people. As a result, the HR function may not be the primary point of contact for employees. Instead, some companies are now using an HR service to digitise their HR departments. This outsourced HR service manages the people processes of their business.
What does HR entail?
HR departments are responsible for managing employee relations, overseeing talent acquisition and retention, and ensuring compliance. HR teams are responsible for onboarding employees, providing employees with the necessary training, measuring employee engagement and managing employee exit interviews. They also provide guidance and support to employees through various channels, including one-on-one coaching, workshops and seminars, mentoring, and providing benefits and salary information. HR departments also track employee engagement and satisfaction levels to help managers improve corporate culture. They may also conduct employee surveys, host company-wide town halls, and publish company newsletters. HR professionals also assist with executive coaching, employee relations, salary analysis and equity planning, and employee health and wellness.
Is HR still relevant in the digital age?
The short answer is yes. In fact, as more companies adopt a digital-first approach to their marketing and sales strategies, it’s important that HR is fully equipped to support the needs of employees. Companies are increasingly leveraging technology for onboarding and managing employees. And as companies scale, HR management becomes more complex. Now more than ever, it’s important for the HR function to evolve to meet the needs of employees. HR departments can be leveraged to collect employee data, conduct sentiment analysis, and identify areas of improvement. They can also be used to provide employees with the support they need, such as coaching and mentorship, benefits information, and resources for career development. Traditionally, managers and executives have been responsible for providing support and resources to employees. As more companies adopt an agile methodology, though, they’re increasingly putting that responsibility on HR. With what seems like a natural divide though, could the admin side be effectively ‘split’ out from the people side? Is this where Organizational Development begins to come in to play?
Where does organisational development fit into this?
Organisational development (OD) is the study and practice of helping organisations to improve performance and find new ways of working. It’s a broad discipline that incorporates management, psychology, sociology, and human resources. When HR was first established, OD was a core function of the department. Over time, however, HR has become more administrative, and management focused. OD has since been established as a stand-alone discipline. It’s often referred to as HR Transformation or HR Transformation and Design, and it applies design thinking principles to the work of HR departments. This is important because design thinking helps teams to be more creative and innovative. It also helps people to solve difficult problems together in an empathetic way, which can help to address the communication issues discussed above.
Should we just outsource HR now then?
While it may be tempting to outsource the HR function given the challenges associated with managing the people and processes within a growing business, it’s important to note that HR is also responsible for helping companies scale. An outsourced HR department is unlikely to have the same level of insight into a company’s culture and challenges as an in-house HR team. This is important because the data that HR teams collect and analyse can be used to inform company strategy. Without a thorough understanding of a company’s challenges, strengths, and weaknesses, it’s difficult for an outsourced HR team to make informed recommendations about how to scale the business. With that being said, it’s important for companies to hire a vendor who can provide the level of service that’s comparable to an in-house HR department. Therefore, it becomes even more critical to consider this divide – and maybe ask the question – who is in charge of the ‘people’ function of the business?
If HR is outsourced and run through technology – How can we strike a balance between technology and humans?
While technology has the ability to streamline a lot of HR processes, it’s important to strike a balance between humans and technology. As mentioned above, companies are increasingly putting the onus on HR to provide all the support and resources employees need. And, as companies scale, the burden is only increasing. Technology can help ease the burden on HR, but it would be unfortunate if it meant that human contact and support were completely replaced by software. As an organisation scales, it’s important to ensure that employees feel supported. This can be done by having leaders or HR managers provide one-on-one coaching, seminars, workshops, mentoring programmes, and other types of support. Technology should be used to augment and support the efforts of HR departments, rather than replace meaningful human contact, using tools such as employee wellbeing software or measuring employee engagement. This can be done by deploying an HR platform that allows managers and employees to view data such as attendance, performance reviews, and benefits information. Such a platform can help to reduce the administrative burden on HR departments, while making the information more accessible to employees.
What is the future for HR and the Organisational Development, and how will it affect companies and the people that make them?
As businesses look to scale and grow, it’s important to maintain focus on the people and culture that made them successful. To do this, companies should periodically conduct employee surveys and focus groups. They should also host company-wide town halls and other events to allow employees to engage with managers and each other. This is where HR and OD come in. HR and OD professionals can help to keep companies authentic as they scale. They can help to maintain focus on values and culture, while striving to improve the experience of work for employees. This can help to retain top talent, while bringing in more great people. In addition, HR and OD teams can help to identify areas of improvement within the business. They can provide insight into whether the process is too complicated, or if there’s an opportunity to make an improvement or change, but more and more often, these areas need to be separated out, with the company deciding how this should function.
HR can be an intimidating function for employees, but it’s an important one. HR departments are responsible for managing employee relations, overseeing talent acquisition and retention, and ensuring compliance. As companies scale and use technology to manage employees, it’s important for HR to adapt to meet the needs of employees. HR departments can be leveraged to collect employee data on everything from the use of employee wellbeing software to measuring employee engagement, conduct sentiment analysis, and identify areas of improvement. However, the continuing emergence of OD as a separate function is becoming more and more commonplace and allows for some outsourcing as a result. However, every company is different, and it is important to look at what suits the culture of the company in the most effective way to achieve its goals, and structure as required.
Are you a purpose-led organisation?
Take our quiz to find out…