To understand what the business of human resources should look like these days, read the title itself. People are a resource.
Aggregate is a resource for a concrete company. Livestock is a resource for a dairy company. This is a perspective that businesses could take in order to maximise human potential for "bottom line" gain. But HR specialists say too many approach it with from its old "personnel" origins: someone typing out collective agreements, sitting in on warnings and tallying up sick days without the slightest notion of profit and loss.
From the business angle, the human-resources sector would harvest the best talent. HR would be taken as the measurable function of strategists, whose role would be to make sure people performed in sync with the business plan.
But it's not just executives who need to take HR more seriously but the staff themselves, says Jenni Miller, head of consulting people and organisational development at Clarian Human Resources. Outsourced firms such as Clarian often fill the business-centric gap that many in-house HR staff fail to meet.
To bridge this, Clarian will begin teaching business acumen to HR professionals. This month, professionals wishing to "derive greater value from their function" can learn how to step into a more business-centric role. Organisational development, HR strategy and internal consulting will be taught by Clarian next year.
"HR professionals need to think about themselves as business consultants specialising in people," says Miller. The British expat only worked a little in the transactional and administrative side of HR, setting off on a consulting/strategy-based path early in her career with Vodafone. Her first major project, at 25, was bringing together 52 promising people from around the globe in the 25- to 35-year-old age bracket. They each had to complete a three-month project for Vodafone's business customers. Under a rotation system, candidates rolled out the work at no cost to the customers.
"HR professionals would do well to consider themselves an integral cog in the workings of a company. This requires a leading attitude but often this sector sees itself as a follower, subservient to other management teams."
New Zealand appears to lag behind the times compared with other Western countries. A 2008 survey by the American Corporate Leadership Council showed that "more than three-quarters of over 100 chief human resources officers surveyed indicated they had a performance objective based on revenue, profit or cost". The results indicated the focus paid off: "Increased HR functional effectiveness improves the likelihood of exceeding business unit revenue performance by 7 per cent, and business unit profitability by 9 per cent."
Payroll expert Susan Doughty, of DSD Consulting, agrees: "Innovation in product development and achievement of quality revenue (that leads to long-term profitability) will only happen through having the right people fully engaged in the right places." But it must be driven by a range of people-related initiatives and HR pros need to speak business lingo to do it effectively.
Peter Boxall, director of the postgraduate diploma in HR management at the University of Auckland, says: "HR people should regularly stretch themselves outside of their usual role and develop exposure to business."