HR as the Revenue Contributor in the Age of Technology
Technology is advancing at an unprecedented rate today. This has led to a drastic evolution within organizations and their various functions. More companies are now expecting human resources function to contribute to revenue and profitability. A study at the University of Michigan concluded that while only 20% of the organizations are using their HR functions as active business solutions partners, nearly 60% organizations are starting to expect more out of HR by encouraging their partnership with core functions to improve business productivity. While this will indirectly contribute to the revenue, HR can also directly impact revenue by improving the quality and outcome of their existing processes.
At the recently concluded session on ‘HR as the Revenue Contributor in the Age of Technology’ at the SHRM India Annual Conference 2018, various industry leaders spoke on the role of HR as a revenue contributor and its future readiness to contribute to the revenue in a world dominated by technology.
HR in a Modern Tech-Enabled Organization
The age of technology has unleashed a rapid pace of evolution for organizations. The changes have impacted all functions including HR. At the SHRM India Annual Conference 2018, Devesh Sachdev, CEO of FusionMicro opined that technology has led to a change of roles within HR. This has happened because technology like machine learning, big data analytics, IoT etc have introduced full-range automation and provided access to various tools and data resources which were not available earlier. Companies like FusionMicro are already leveraging these benefits to automate their administrative HR tasks. This has allowed the HR managers to shift their focus to the strategic value-adding elements. As more path breaking technology evolves, HR will continue to relearn many aspects of the job.
Devesh’s thoughts were in congruence with Shobha Ratna, Head of Human Resources and Training at Aditya Birla Sunlife Insurance. Shobha mentioned that HR has always been contributing to the revenue of the organization. However, as technology evolves, HR will become more accountable for the revenue. Currently, HR contributes to an organization’s revenue by managing the employee retention, improving employee productivity, building organizational talent and workforce capabilities for the present as well as the future. All of these HR related tasks impact the revenue. Now, with technology at its helm, HR will have to sharpen the impact of its contribution. Technology will help HR in moving away from non-value adding administrative tasks to the value adding ones such as workforce engagement and organizational culture development, to name a few.
Creating a Future Ready HR in the Age of Technology
Devesh stressed that HR functions need to understand that the technology is not here to compete with them. In fact, it can only enable it in dealing with its key responsibilities more effectively. He stated an example of Amazon chief Jeff Bezos and how he thinks that the most crucial aspect for an organization should be to demystify the technology and make it work for the people. Today, HR needs to demystify the technology for itself and the workforce to gain optimum mileage from it. For example, with a diverse workforce across multiple locations, driving the organizational culture is a challenge for an HR manager. HR managers cannot be present everywhere and with traditional tools they could not spread the key organizational messages to each and every employee effectively. However, modern technology is helpful in freeing up the HR professionals to devote more of their time in driving the organizational culture, so they can plan better ways of doing the same. Technology is also giving them the tools to reach out and communicate to the employees across all locations in a matter of seconds and train them on the organizational culture.
According to Shobha, technology is improving the efficiency of HR processes through improved process turn-around. It is also helping in better communication with the employees and is enabling decision-making with insightful data. For example, Aditya Birla Sunlife Insurance has created an integrated and automated recruitment process for the organization. Technology is improving the speed and efficiency of the recruitment process from start to finish.
Similarly, advanced data analytics is helping organizations in better decision-making through accurate forecasting, improved productivity, higher ability to predict attrition and managing the front-line churn. The bots are helping the companies in tackling regular queries from employees so that HR is free from that task. Technology adoption has therefore resulted in multiple revenue contributing benefits to the organization such as saving cost, managing retention, increasing productivity, managing talent and enabling nuanced decision making.
However, for the future, the organizations will have to move over handling the basics and look at the more complex problem statements. The task will be to make the organizations future-ready by onboarding the right talent and cultivating the right mindset among the employees.
Traits to Learn for a Future Ready HR
With the changes in technology, the work environment is changing drastically. The HR of the future needs to imbibe new traits to conform to this evolution. By incorporating the activities that can impact the bottom line, HR can be a revenue contributor. There are some key areas where HR can lead to positive revenue contribution –
- Understanding Technology and Making it Work for Them
HR managers need to understand what the technological tools can do for them, how they can enhance their skills and smoothen their processes. Only when they have understood the capability of the technology in front of them, can they use it to their advantage and stay ahead of the curve.
Once they understand the use of technology, they can utilise it effectively to directly enhance revenue. For example, developing an automated and reengineered hiring process can help HR to pick and hire the best sales people from the market. It can then measure the impact of their activity by analysing the gain in revenue from the new hires. For example, checking the improvement in the sales revenue from an area where a new sales manager has been hired can be directly attributed to the new hiring process.
Similarly, HR function can prioritise those functions or roles which will give the highest revenue impact. Technology can help them in speed hiring for high-profit generating vacancies. By speeding up the recruitment process, companies can eliminate the time wasted because of a vacant position. The number of days saved can be equated with the money earned every day from that position and the final revenue gained can be assessed.
- Moving towards Strategic and More Value-Adding Tasks
HR functions need to move away from performing the basic tasks to tasks that can add strategic value to the business. For example, HR can help the business directly in improving the revenue by the introduction of a continuous performance management process. Currently, organizations have a yearly process of rating the employees. In a rapidly changing business environment, a yearly process can lead to time delay and inefficiencies in workforce management. Therefore, HR can plan strategically to fast track the performance management process and make it continuous in nature.
Workforce engagement is one of the key strategic tasks entrusted upon an HR professional. An environment of engagement and openness leads to a socially collaborative culture among the workforce. It involves all the lines of business and breaks down the inter-departmental barriers and hierarchies that exist within a department or the organization. HR can plan strategic initiatives like appointing a social engagement manager who would to be responsible for bringing people from different departments and hierarchies together. This would lead to an increase in the overall productivity and improved financial success for the organization.
- Using Analytics
HR should liaison with business and use data mining tools to understand where they can step in and impact the revenue. Modern technology like smart devices and big data tools has allowed HR department to sift through copious amounts of workforce data and mine them for actionable insights on employee health, work floor ergonomics, attendance, productivity etc. HR needs to identify the areas where they need improvement and then work their way up. Data analytics can help them in this decision-making as well as in measuring the impact of their initiatives.
The age of technology has made several administrative tasks such as resume shortlisting, redundant. In light of such changes, it has become necessary for HR functions to evolve beyond these tasks and play a more diverse and strategic role in the organization’s business goals. Only then will they be able to positively impact the organization’s ability to innovate, gain a competitive advantage over others and generate revenue. In an environment full of rapid changes, HR can become an organization’s change champion by being business savvy and getting attuned to technology.
Do you want to know how your organization can leverage its HR function to make a positive impact on revenue? Do you want your organization’s HR function to evolve as a revenue contributor?
If yes, then watch the thought-provoking session conducted at the SHRM Annual Conference 2018.
Click to watch now https://www.youtube.com/watch?v=TBYLlMbF_wQ