THE CRUCIAL ROLE OF HUMAN RESOURCES LEADERSHIP FOR ORGANIZATIONAL SUCCESS

Understanding the benefits, value and transformational experiences for all businesses.

HR leaders Cheryl Naumann, SPHR, Chief Human Resources Officer at University of Phoenix, and Sibyl McCarley, SVP of People Success at HireVue, the global leaders in hiring technology, share their insights on how/where HR teams add value to their companies and the benefits of having a strong HR team in today’s corporate landscape.

What is the role of HR in business?

Sibyl McCarley: Human resource teams are responsible for the entire employee experience; they align a company’s workforce, policies, and practices with organizational goals, foster a positive work environment, and address employee needs and concerns. As a department, HR encompasses a multitude of functions and disciplines. Some of the most common roles and responsibilities on an HR team include Talent Acquisition, Learning and Development, Performance Management, Compensation and Benefits, Employee Relations, Compliance and Risk Management, and Diversity and Inclusion.

Cheryl Naumann: Decades ago, it was acceptable, if not expected, for HR to take care of the myriad of tactical duties (hiring, paying, firing) that came with employing people. Today, the CEOs of high performing companies have realized that people—one of the most material costs to a business—are also one of its greatest assets. HR is all about people strategy. But before such a strategy can be built, HR leaders need to get out of the HR space and truly understand the business. For example, building an organizational culture that attracts the most talented individuals, but which also assures they want to stay, requires that HR leaders be in sync with their business leader partners. What are the strategic imperatives for this year? In five years? With whom do we compete? How is our business model shifting? How will we differentiate, and win, in the years to come? What talent do we need to go find that we don’t have today? How do we achieve and sustain our business growth, and how do we attract, reward and motivate our team members to give the highest levels of discretionary effort? Building a hiring or retention plan without that knowledge is like building a room in a new house without looking at the architectural blueprint. You may end up with doors leading to nowhere or structural inconsistencies that could compromise the integrity of the entire house.

What is the importance of strong HR leadership to organizational success?

Sibyl McCarley: Strong HR leadership is essential for creating a high-performing and engaged workforce. In addition to the responsibilities I mentioned above, collectively the HR team are culture keepers, helping to foster overall satisfaction and engagement, which leads to employees being more productive, innovative, and committed to the company’s success. The importance of strategic and proactive HR teams has increased exponentially in a globalized economy, and the transformation was accelerated during the pandemic. HR is increasingly seen not just as a cost center but as a strategic partner with a voice at the table.

Cheryl Naumann: Even small businesses will benefit greatly from having a leader either devoted full-time to HR and people strategy, or if not possible initially, a leader whose interests, passions and competencies lie in that area. A talented doctor opens a multilocation medical practice across a geographic area. Does she or he have a partner who is assuring the timely hiring of top-notch clinical staff, building a culture that articulates the vision for how patients are treated from the moment they walk in the door, and building the capability of other people leaders within the organization? Many small business leaders focus on the pieces of the business in which they are personally experts (cooking, doctoring, remodeling, selling, etc.) and fail to notice these gaps until the competition is breathing down upon them.

What are the benefits of HR leadership?

Sibyl McCarley: Strong HR leadership has myriad benefits for business. HR leaders help to cultivate a supportive and inclusive work environment, leading to higher employee satisfaction and retention. HR teams will also anticipate and mitigate potential risks related to employee relations and compliance, protecting the company. By ensuring that employees are well-trained and motivated, HR leaders drive higher productivity and efficiency. A strong HR department can also improve the companyʼs reputation, making it an employer of choice, and in today’s world of highly variable skills, attracting and retaining skilled, agile workers is a distinct competitive advantage.

Cheryl Naumann: HR leaders make it their business to see things through the lens of the employee, while also balancing the view of the world from the eyes of management. This balance is critical. The laws and regulations related to employment are complex and ever changing. The foundation on which the HR house is built is assuring compliance with all local, state and federal laws and regulations—which can also vary greatly between geographic areas. The key functions of hiring, managing performance, paying, evaluating, and engaging come next. Where HR leaders begin to differentiate themselves and their organizations is through how they accomplish these tasks. Build an employee value proposition—why would someone choose to work here, rather than at another company? What’s so special about this organization that keeps people here, year after year, even if they encounter a rough patch? How many internal team members are developed and promoted each year? How is the HR function moving the needle on revenue growth and margins through their innovative people practices? These areas represent the secret sauce that takes an HR leader from good to great.

Where does HR add value to businesses?

Sibyl McCarley: According to HireVue’s 2024 Global Trends Report, 37% of hiring leaders are putting more emphasis on candidates’ future potential and less on past experiences. Old proxies used to predict performance—primarily resumes—are being replaced with skill assessments. This change is due to a rapidly changing skill environment where people are being asked to fill roles that haven’t existed before. For current team members, learning and development teams work with leaders to identify departmentwide and companywide skill gaps, and then design professional development opportunities to fill those needs. HR teams also add value to a company through strategic workforce planning, helping leaders optimize staffing levels, minimize turnover costs, and identify opportunities to improve operational efficiencies, all of which contribute to the organization’s bottom line.

Cheryl Naumann: HR leaders need to operate from data; and, assuring that systems are in place to collect and analyze that data is the first step. The HR leader should become adept at pattern recognition. The obvious—a fair number of talented employees are leaving to go to work for the competitor who just opened a new headquarters nearby. The not so obvious—the hotbed of high potential talent, individuals who have been recently promoted or who are designated in succession planning as “ready now” to follow in their boss’ footsteps—seem to be coming from three specific teams. What do these teams have in common? When you contact-trace these three leaders, you see that they all shared the same manager within the last three years, a manager who emphasized developing people as one of the most important roles of a leader. How do you harness that belief and use it to guide other people leaders, so that more top talent can be developed across the enterprise? If the organization is making great strides in AI and machine learning, the HR leader should have a sense of which roles will be obsolete in the coming years and where new talent needs will emerge. What can be done now to build those new skill sets seamlessly within the context of existing jobs, so that dedicated and talented staff will always have a meaningful and rewarding role in the organization?

How does HR leadership transform a business?

Sibyl McCarley: Last year was generative AI’s big break. From ChatGPT to AI image generators, and everything in between, there’s no denying: AI has taken the world by storm. At long last, it seems that HR teams and tech are learning to work together in harmony. Leveraging AI and automation is a way to be more effective and efficient. When asked what advantages they experienced from the changes they made to their interview process, HR professionals reported timesaving, greater flexibility all around, and cost-saving benefits.

Cheryl Naumann: HR leaders have tremendous influence over business transformation! The careful sourcing, selection and onboarding of just one new executive will shape culture (for better or worse) for years to come. Such an appointment is not a tactical task—the HR executive must assume ownership of this process as early in the game as possible, to assure the new leader is the most effective out of the gate. A company goes through a merger or acquisition—while the finance team is looking at the numbers and the operations team is focused on process synergies and integrations; the HR leader looks at what the workforce can become on the other side of the deal. Seeds planted previously in the areas of positive culture, transparency and trust in management prior to such a change will pay rich dividends during a time of ambiguity such as this. The HR executive should be working in lockstep with the CEO to craft and articulate a motivating vision that will engage team members’ hearts and minds in the transformation to come.