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Article from The Business Times, 8 November 2004
Can SMEs and HR tango?
HUMAN resource management has evolved to the point where it can be a strategic business partner in an organisation. Of course, how strategic a role it plays varies from organisation to organisation.
It is not uncommon to still find HR being called the 'personnel department' in some organisations and for the folks there to continue to be policy writers. Or worse, to be called HR, and yet continue to be policy pushers! Generally speaking, there are three key factors that determine if HR is strategic or otherwise.
Firstly, how sincerely does the CEO believe that HR can play a strategic role? If the CEO is not supportive, nothing much can be done by the HR manager.
The second, and more important factor, is whether the HR manager has the skills set to deliver strategic HR. And the final and most important factor: Does the HR manager have enough expertise and conviction to sway management?
All three factors must exist for strategic HR to happen. What does 'strategic HR' mean? The role of HR in the current business world must be that of a business partner, not a service provider. In some organisations, for example, HR's role in talent acquisition is simply to put out the advertisement or place the order with a headhunter, and process the paperwork when the successful candidate has accepted the hiring manager's job offer.
They are not involved in short-listing candidates, psychometric testing or any of the important activities involved in talent acquisition. That is not strategic HR.
In this example, strategic HR could mean the HR manager putting in place a talent sourcing process which acts as a filter and database of potential talent for hire. HR could work with one or more headhunters, or even outplacement consultants, to put this in place. The end result is a ready pool of talent on tap should the need arise. In other words, talent identification and acquisition is an on-going process, not a one-off activity. Intel Corporation, I believe, works this way. That is strategic HR intervention.
In other words, all the typical HR interventions - talent management (from recruitment to manpower planning, and developmental initiatives), wages and benefits administration, industrial relations, employee well-being and career management - must be aligned with the business of the organisation.
Not only must these be aligned, they have to be continuously reviewed and updated to stay relevant. Add to that list of interventions, employee assistance programmes (EAPs) and HR outsourcing - for these are fast becoming the norm.
Take the outbreak of Sars, for example. HR managers here were fully challenged to introduce policies and procedures to cope with the outbreak. Singapore Press Holdings,for example, came up with the concept of the 'home team'. The editorial team was divided into two teams, one working from home to minimise the possibility of fellow journalists catching the bug from colleagues who covered the news.
SMEs were not spared. Given the relatively smaller number of employees, how did they cope? How do you have a 'home team' when the team is so small? This is where, I believe, SMEs can benefit from having a strategic HR in-house, as planning for the unexpected is something that would have been put in place for emergencies, such as Sars or even terrorist activities.
Let's look at the key criteria which all strategic HR professionals possess.
* Be a strategic thinker: One of the most vital roles in HR is to build on the capabilities of the organisation - more so in the case of smaller organisations. This involves activities such as talent sourcing, hiring, coaching, mentoring and employee retention. Being proactive and putting effective systems in place calls for quality time out from your daily routine.
* Be comfortable functioning within shades of grey: How simple it would be if everything could be divided into black and white. Of course, this is not the case. Doing business and working in places like India and China are excellent examples to quote.
* Be able to work virtually: Our business world has become border-less. Your employees will have to travel constantly to be closer to the customers. As HR, you will have to be available to your internal customers when they need you. While you may not be available 24/7, you should at least be able to offer your in-house clients virtual contact some hours/days in the different time zones.
* Champion and initiate ideas and change: Since the only constant is change, HR must play a leading role in being a change champion. To do this well, you must demonstrate a high level of competence in managing change effectively yourself so you can be a role model for your bosses, peers and charges.
* Be culturally sensitive. Headhunters tell me that their clients are not only looking for regional HR talent, but prefer those with an international perspective. To be an effective HR manager, you must demonstrate a high level cultural sensitivity and be able to work effectively across multiple geographical and cultural boundaries.
* Knowledge management. The effective management and use of internal knowledge can be a powerful organisational tool. Shell, for example, has been experimenting with global expertise networks that also serve as a knowledge management tool. Knowledge management is especially pertinent to SMEs.
Actually, if you look at the issue more closely, SMEs cannot do without a strategic HR professional. Why? Because not many SMEs can grow organically with just a small number of employees. Herein lies the value of HR. A strategic HR professional in an SME can work with the founder/CEO to maximise the potential of each and every employee - for talent is scarce.
One way to go about this is to use an executive coach. I see no reason why executive coaching intervention cannot be as effective in an SME as in a larger organisation.
After all is said and done, can SMEs afford to hire strategic HR talent? Our experience has confirmed that SMEs highly prize MNC experience. This is true not only in the HR arena, but also in other functional areas, especially financial management. Experienced, outplaced finance and HR professionals from MNCs have found, after unsuccessful attempts at getting back into MNCs, that their experience is valued - in SMEs.
The challenge for SMEs then is to be able to create a value proposition that can attract strategic HR talent from the MNCs, and not rely solely on the ones that have been outplaced from MNCs. Giving HR managers a stake in the organisation could be one way.
The writer is a certified career management professional and HR expert with NeXT Career Consulting. He is also the Founding President of the Asian Association of Career Management Professionals
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