The Changing Face of HR

This document is also available as a pdf for download. 

The changing face of HR

Twenty years ago working in what was then called ‘Personnel’ might have involved administering payroll and employee benefit schemes, and occasionally planning company outings. Today human resources professionals are more likely to be strategic partners to their commercial colleagues, tasked with leveraging human capital throughout the business. “Leadership programmes, talent management, career development, these are the most important and fundamental parts of HR,” according to Paul Stobart, CEO for Sage UK and Ireland, “because HR is not about policies anymore, it’s about making the most of your people.”

Increasing HR’s skill set

Changes in the nature and function of HR have meant that there have been major changes in the skills required of HR professionals. They now have to deal not only with traditional issues such as employee relations and pay and benefits, they also need to focus on organisational development, employee well being, and corporate social responsibility. In addition they also need highly developed strategic, financial, analytical, and technical skills.

A true business partner

Sage’s Head of HR, Leisa Docherty, has seen many changes in her time in HR. “I’ve worked in HR for nearly twenty years,” she explains. “It used to be all about administration, and there was a sense that it could be rather confrontational. If someone was unhappy with their manager they would be off to see the personnel manager, who was there to ‘protect’ them from their employer and offer a shoulder to cry on.”

According to Leisa the main changes in HR are twofold. “In the last 18 months the economic downturn has meant that HR has had to be very responsive and act quickly. Our role is to support the commercial side of the business so we have had to become more tactical. And, partly as a result of this, HR’s role has changed to that of true partner in the business.”

Strategic decision making

At Sage the HR team are embedded in the business, sitting on the leadership team and playing a key role in commercial discussions. “The value of people has finally been recognised throughout the business,” explains Leisa, “We now have a quarterly People Matters session at board level,” she says, “at which anything and everything to do with people is discussed. When I started my career that would have been very unlikely to happen.”

The HR team is involved at the highest level in discussions about strategy, markets and the direction the business is taking. In increasingly competitive markets with growing customer demands, there is a growing realisation that people sit at the heart of business success. “At Sage we are committed to creating an extraordinary customer experience and that can only be delivered by our people whether they are developing products, managing systems, or dealing directly with customers,” explains Leisa. “This means that it is essential to attract and retain talented people, and ensure their experience of work is a positive one.”

Driving and managing change

In an ever changing business environment changes that affect the work force need to be managed if people are to perform to their optimum capability. “We work closely with the commercial divisions on their strategy.” says Leisa, “So if a manager wants to create a more flexible approach to handling customer calls for example, we will work with them to achieve this. We help to deal with the people issues associated with work and organisational change so that we can achieve the best result for both the business and the staff.”

A consultative role

This approach reflects the increasingly consultative role of HR. As companies de layer and decentralise, the responsibility for managing all sorts of people issues has been devolved such that line managers have to deal with many people based issues, as HR moves away from responsibility for every the day to day interaction and takes a more strategic role. “HR ultimately has responsibility for developing best practice in the recruitment and retention of the people Sage needs to support its vision.” according to Leisa, “Leaders in the business therefore come to my team to discuss what they want to achieve, what this means in terms of HR, and then we’ll talk the situation through and suggest ideas about how to move forward.” The role of HR is therefore one that supports, challenges, and facilitates business strategy, “It’s very much a two way discussion,” says Leisa.

Managing talent

The HR team at Sage are heavily involved in many different programmes and initiatives across Sage. “A primary focus is the need to get the right people into the right jobs,” explains Leisa, “we have to ensure that we can attract, reward and develop talent, so in HR we have a core strategic role to play, understanding the capabilities of the talent already in the business and meeting the business’s future needs.” This focus is reflected in Sage’s investment in talent management in order to both develop talent from within while also attracting new talent, in a market in which there is enormous competition for the brightest and the best people.

Engaging employees

HR is also very involved in employee engagement initiatives, reflecting the extension of its remit far beyond pay, rewards and policies. “Engagement is all about aligning corporate values with employee ethics, so as the focus in HR moves more and more towards the management of human capital, fostering engagement is vital to our ability to retain talented employees and create a more positive corporate image, which leads to a healthy, competitive and effective organisation.” says Leisa. Creating an environment in which people achieve their optimum potential, with its focus on the relationship between employer and employee, needs to be championed at board level. HR uses metrics from the Engage people survey to reinforce its importance to performance, staff retention, and health and wellbeing. “The results of Engage show us how our initiatives are affecting how people feel about the company and their working environment. It’s very important to us that people enjoy working at Sage, because then, hopefully, they will stay and build their careers here.” according to Leisa. While it’s not possible to mandate engagement, HR takes the role of facilitator, supporting the needs of the organisation and providing the tools and resources it needs.

Changing behaviour

Another area in which HR has a major impact is that of behaviour change. “HR involves looking at the kind of behaviours the company wants its people to exhibit and how this can be facilitated,” explains Leisa. This is of particular relevance in the area of corporate social responsibility, or CSR. For many CSR is a public relations issue, which means that responsibility for this highly strategic function sits within the marketing department. But the kind of CSR that makes a real difference requires behavioural change throughout the whole organisation, which means that it is primarily an issue for HR. “We realise that CSR is all about people, so it sits within HR,” explains Leigh Thompson, Sage’s Corporate Social Responsibility Consultant. “We want to enrich our peoples’ experience at work, and for them to feel proud of our brand, and being a responsible business is vital to achieving that goal.”

Facilitating innovation

The importance of encouraging behaviours that will drive the organisation forward comes to the fore when considering innovation, a core value at Sage, and fundamental to the company’s current and future success. According to Ian Clarke, Research and Development Director for UK and Ireland, innovation is an evolutionary process. “HR’s role is to ensure that we have an open, free, and empowered culture and that we recruit, retain and nurture talent in the organisation,” he says, “If there was too much form filling, or we made the process too cumbersome people would be less likely to come forward with their ideas.”

And the HR team itself are also part of the Sage innovation culture. “HR has recently introduced its own innovative online system to enable staff to customise their benefits package via a self-service website.” explains Ian.

Developing leaders

The HR team is also very involved in the development of leaders at Sage. “People don’t leave companies,” according to Leisa, “they leave managers. This means it’s very important that we develop a leadership standard that everyone adheres to and which supports the needs of our people and the goals of our organisation.” Sage believes that people are looking for leaders who inspire, coach and develop them. “We have developed the Sage Leadership Standard, or SLS, that all our current and future leaders go through. It comprises much of what is traditionally associated with HR including performance reviews, career development and 360o feedback, but it also goes much further.”

“There are six elements to the SLS which everyone needs to buy into,” explains Jayne Archbold, Managing Director for Sage Accountants Division, and someone with personal experience of the SLS. “We want all our leaders to be passionate, accountable, collaborative and enterprising. They should bring Sage’s values to life, creating the conditions for others to succeed, but how they do this will differ across the business. We are not trying to create clones, people must play to their own strengths.”

Measuring success

Another major change Leisa has seen is in the measurements applied to HR. Paul Stobart believes that HR directors should be incentivised and remunerated on commercial factors that affect the success of the business, as Leisa explains. “Our success is measured on a variety things, and we're starting to introduce more commercial factors into the way we measure how we're adding value.” This greater focus on the commercial aspects is also reflected in the make up of the HR team, which is increasingly includes people who have a mix of commercial and HR experience. “We look for the best people first and qualifications second,” says Leisa. “I have enormous respect for CiPD,” Leisa continues, “they offer excellent research and their articles and website are very good, but we don’t consider CiPD qualifications essential for a job in HR.”

A change of name?

This approach very much reflects the views of Paul Stobart, who believes that the very term HR may come under pressure in the future. “HR still sounds to many people as if it’s about process, administration, policy, discipline and rigour.” Of course this is still an important element of the job according to Paul but, he continues “increasingly the more important part of the job revolves around making the most of one’s people, giving them the best opportunities to succeed. I wouldn’t be surprised if the HR directors of the future are pulled from all aspects of the business because their job really is to harness, nurture, develop, and support the most important asset that most businesses have, their people.”

Paul also endorses the increasing importance of commercial metrics on HR. “I think all HR directors should be incentivised and remunerated on the commercial factors as well as on how well they do the job of process and policy. The HR Director at Sage is absolutely accountable, along with the rest of the executive team, to deliver on Sage UK and Ireland’s numbers and I know she feels that deeply and personally.”

Ongoing change

Despite all the changes that have taken place in HR to date, Leisa thinks there is still much more to come. “We are always looking to see what other organisations are doing, and we are focused on finding innovative ways to ensure we are the very best employer we can be. After all, Sage is only ever going to be as good as the people that work for it, so we need to make sure we get the very best out of our people.”