Old HR to New HR: Making the shift

There’s no doubt that HR has come a long way from a compliance-driven, back-of-house personnel department. But the full shift to a strategic People & Culture function that helps drive business success is still underway for many organisations.

‍In this conversation, our Head of People Advisory Tim Guille shares his experience of how HR has evolved, why it’s so important and how businesses can fully embrace it for their benefit.

‍Question 1: Set the scene for us. How has HR evolved?

If you go back in history, HR was often branded as a personnel department that simply created contracts, put out fires and paid people. Then the brand “human resources” developed and it started to become a bit more about training, development, policies, performance and safety. Then, it progressed again as a brand, to now be seen more as a proactive People & Culture (P&C) organisational partner that operates as a highly strategic business function.

I've always thought the best way to look at it is that traditional or “old” HR was reactive – an administrative function focused on compliance, cost and control. It really was often seen as the back office.

Whereas “new HR” is where P&C teams are more and more responsible for delivering initiatives and projects that are key to delivering whole-of-business strategies. The goal is no longer just compliance and policing; it's about partnering with stakeholders to create value, capability and competitive advantage through people.

‍“Today, People & Culture is very much a proactive business function that drives critical value.”

‍Question 2: Forcing you to pick, what’s the biggest step change between “old” and “new” HR?

The one I think that initially stands out is talent management. In the “old days”, people just got a yearly performance and remuneration review and that was about it. Whereas now, we’re strategically partnering to create value through continuous growth, capability building and honing in on developing skills that help individuals deliver the whole-of-business strategy. That creates deeper value and gives organisations a competitive advantage, because you've got the best people in the right roles that are highly capable, highly engaged and highly skilled.

While it's still labelled “talent management”, People and Culture play a key role in not only enabling leaders to be highly skilled and effective at coaching and feedback, but also in continuously delivering initiatives aimed at enhancing and building the right capability and strategic value.

This strategic approach provides a constant view of the skills and capabilities your organisation needs. Because talent management today should be centred around:

• Who are the right people?
• What's the right capability for now and for the future?
• What skills are transferable? 
• What is the right skill set to help us achieve where the business wants to go?

“A business with highly engaged employees is commonly 20% more profitable and productive than one that doesn't.”

Question 3: Okay go on, what’s another big difference between old/new HR?

Traditional HR was characterised by manual processes, paperwork, rules – those sorts of things. Whereas now, we're leveraging tools like HRIS’s (human resources information systems) and AI to automate and transact routine and often inefficient tasks, which then frees up P&C teams to focus on efficient and high value adding tasks.

This also means there’s more data available, and modern P&C teams need the ability to analyse that data to better understand the organisation’s skill and capability picture and identify gaps and opportunities. An example of that is diversity and inclusion. There's a big part of me that sees those words as the wrong way around, because if I've got the right data or the right information to better suggest how we create a more inclusive environment, diversity will follow. For example, do we have to have a full-time CEO? Maybe not. If it's four days a week, that's a different talent pool to draw from.

Operationally, we want to see P&C teams using technology, software and systems for tasks that don’t add value so they can get to the value-add work faster and provide deeper business value. 

Question 4: How do businesses make the shift into the new world? 

It sounds a bit like buzz words, but I do believe that shifting from old to new HR comes down to how you view people in the workplace - not as a headcount but as human capital.

A lot of people still look at headcount and resources from a “what's the cost of that?” perspective. But if businesses lean in and really look at things from a value of human capital perspective, that’s where it starts.

Underneath that, it's about asking how are those people living their best life in your organisation? If you have highly skilled and talented people, and they've got the right capability to take an organisation forward, then a huge focus should be ensuring the employee experience is the best it can be to ensure strong engagement. Do people have the space to grow and develop, to be productive and capable, to really focus on value-adding work? Because if they do, it will be a huge contributor to organisational success. And People and Culture are a key stakeholder in all of that. 

“Move your thinking from what's our headcount to what's our human capital.”

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‍We hope you enjoyed this conversation. Want to hear more from the WRC team? Head to our Articles page where the crew covers more of the most common and difficult People & HR challenges we see every month.

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