The role of HR: Moving from business outsider to insider

HR professionals will play a vital role in helping businesses navigate the changing world of work. Rather than ‘business partners’ they must become business insiders and take their seat at the leadership table.

Human resources professionals have long been regarded as strategic business ‘partners’. While their knowledge and insights are called upon to help shape vital business decisions, they are often seen as operating alongside or even outside ‘the business’ of an organisation. But in an era of rapid change and uncertainty, businesses can no longer afford to view HR as outsiders. It’s time for HR to become business insiders.

Moving HR to the inside makes good business sense. The world of work is rapidly evolving with new roles emerging and existing roles being replaced. If companies are to adapt to change, HR professionals must become peers at the leadership table and they play a key role in making this move.

HR as business partners: the traditional model

Siobhan McHale, Head of HR at Dulux Group, is responsible for identifying the need for HR professionals to move from ‘business partner’ to ‘business insider’. She says HR professionals have played a key role in in shaping the perception of business partners. “In terms of our evolution, we saw ourselves as separate in order to deeply immerse ourselves in the skills of HR,” she says. “We were ‘HR specialists’. We embraced this and we thought it was giving us a certain credential that allowed us to walk side-by-side with business leaders.”

McHale says that this ‘partner status’ has inadvertently served to keep HR separate in the business world. “You don’t call the marketing team or the sales team ‘business partners’,” she says. “The framing of our role needs to evolve now. We need to step into a business leadership role to bring commercial solutions to the table.”

Sue Kent, Head of HR at global financial services business Pepper Group, says that while perceptions of the HR role have changed, it is still often seen as separate to core business operations. “Many years ago, we were seen as a sounding board for problems or a policy enforcer,” she says. “That has changed, but we still need to work harder to show how we can help drive successful business outcome.”

In-built leadership skills in HR roles

Shifting HR from business outsiders to business insiders is vital in helping business adapt to change.  “The great advantage that HR brings to the table is showing how to navigate through volatile and uncertain times,” says McHale. 

“The adaptive components of change are not just the technical things like implementing new systems and processes,” she adds. “They are the challenges of how we reframe roles, how we introduce new operating models, how we get transformation happening from a people perspective. These are areas where change often goes wrong and this is where HR has the unique set of skills that can help advise around the leadership table.”

Kent adds that HR can have a greater impact by equipping other leaders with information required to make important decisions. “We can’t be just a voice on the end of a phone when the leadership team needs to make a decision,” she says. “Rather than saying, ‘I need to call HR’, we should be at the table delivering information so that decisions can be made quickly and the business can keep moving.”

Sharpening HR’s commercial acumen

The change can start with HR professionals reframing their own roles, adds McHale. 

“We have a tendency to separate ourselves,” she says. “I see a lot of HR professionals framing the role as sitting outside the business, so they say things like, “I developed this solution for the business or we in HR are doing this for the business’. You need to define yourself firstly as a business leader. You are a business leader with an HR specialty because you sit in that role at the leadership table.

For HR to move from business partners to a truly integrated and valued department within the business, Kent says they must sharpen their commercial acumen. 

“I believe a company's most important asset is its people, but people are also the biggest cost to the business,” she says. “From an HR perspective, you need to strike that balance around the commercial priorities of the business and show that you're interested in driving cost efficiencies to deliver successful business outcomes.”

McHale agrees that HR professionals must place a greater focus on commercial outcomes. “Get closer to the business end,” she says.  “Understand the financials and the business case behind anything that you're working on. Share your ideas but put a commercial lens on them first. Work out the cost, the benefits, the revenue potential of an idea. This way, you’re constantly framing your role in a commercial way rather than just in an HR way.”
 

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Susan Muldowney

Susan Muldowney has worked in publishing for more than two decades and found her perfect job when she began freelancing two years ago. She is based in Melbourne and specialises in writing about business, architecture and design.

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