In my last blog, I discussed the importance of resources to a company and highlighted that HR or the Human Resource is the most important one. Some of you agreed and others had diverse views. I would like to elaborate on why HR is the backbone of a company.

From improving company morale and developing methods to ensure high performance standards to resolving conflicts among employees and ensuring a company stays within its budget, there are many reasons why HR is the backbone of any company. The traditional ones are of course Work process Design, Succession Planning, Inter Organizational Mobility, Tech integration, Innovation etc. What I have to say is different and let me explain why HR is or rather has the potential to be the backbone of a company.

Value Creation

While defining the role of a Human Resource Manager, it is important to do so in terms of the value that it creates. For example, a CFO of a company makes an annual spend of ₹ X and handles the financial resource of a company. Similarly, the HR also should function in the same manner. Let me elaborate. The HR manager or the function should handle ₹ X worth of resource. The HR manager should foresee how this ₹ X can be utilised to create a value of 10 times ₹ X.

The measurement of any key function is done in terms of the value it creates. This is an important aspect that one needs to remember.

• The sales teams will say that their target is ₹ 100 crores. 
• The Delivery operations team will say that theirs is ₹ 60 crores.
• The Finance will say that they handled ₹100 crores in  transaction 
• The Purchase function will also say that they handles ₹30 crores worth of raw material.                                        

As you can see from above, everything is measured by value. Once the Human Resource function also operates in terms of value, it will be a game changer. If HR assumes the value of what they are responsible for in terms of business, the whole perspective changes. It will then align with the other functions of the company. 

Customer Interaction

Another aspect that can result in volumes for the businesses is if the HR meets the customers. As of now, it is only the sales and marketing team that do all the interactions. If HR interacts with them, they are sure to have a better and comprehensive idea of customer expectations. This will in turn help them in better engagement with the employees.

Join the Number Game

The Human Resource department should familiarize themselves with numbers. This is something that they normally avoid. However, in order to create a better value in an organisation, numbers are crucial and it is only with this involvement that HR can rise. In fact, even the performance management of HR must be in terms of numbers.

Business HR

Once the above changes are in place then HR is no longer a support function. It will be that department that plays a crucial role that will help the company progress in this ever changing work environment. We will see HR turn into what is known as Business HR. This means that all other functions automatically are a part of HR itself.

I hope I have been able to explain myself on how HR is the backbone of a company. I would love to hear what you think about my perspective. I would also like to hear your opinion on the same as well.