Why HR / People is One of the Most Strategically Important Roles in an Organisation

In organisations today, the Human Resources (HR) or People function plays a pivotal role that goes beyond traditional personnel management and payroll. As organisations grapple with rapid technological advancements, globalisation, and changing workforce dynamics, the strategic importance of HR has never been more pronounced. In this article, we dive into why the HR/People function is critical for organisational success and how you can optimise this vital area.

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The Strategic Role of HR/People Function

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1. Talent Acquisition: “I help ensure our talent bench meets what we want to achieve as a business both currently, and looking into the future.”

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Most CEOs, founders, and business leaders across the globe will tell you that hiring the right talent, at the right place and time, is one of the greatest challenges—as the saying goes, hire slow, fire fast. Hiring the right people from the get-go, starting from establishing a founding team, through to a core team and then growing around that as a company scales, is a difficult task. What a company needs when it is starting can often be very different from the talent needs while scaling. Leaders need to change and adapt.

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💡 Top HR and People leaders possess a ‘CEO-like’ understanding of business strategy and a ‘COO-like‘ knowledge of internal operations, making them crucial for identifying and nurturing the skills that align with long-term business goals.

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The ability to ‘acquire’ the best talent must encapsulate both the demand (company) and supply (candidate) sides. For example:

• Supply-side: Proactivity in drawing out market maps (looking at the industry, competitor, and business function) and crafting precise job descriptions is a critical talent acquisition skill to ensure a steady supply of talent for medium and long-term success.
• Demand side: On the flip side, ensuring that talent is well-informed about the employer brand, its value proposition, and how, if not now, they can engage and realise professional success is critical to creating a pull for top candidates.

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2. Professional Development: "I focus on professional development, creating clear pathways for career advancement, which has significantly improved our retention rates."

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Seventy percent of learning happens on the job. HR leaders must work with business leaders across the organisation to ensure that professional development plans are in place for employees at all levels. This does not have to wait till the employee is well settled in the organization, but can start with their onboarding program to integrate on-the-job learning. Crafting individual development plans from the outset. This is critical for objective assessments of progress toward personal and professional goals.

This focus on development is not only critical for business success but is also a key driver of employee retention, providing clear growth paths and opportunities within the organisation.

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💡 It is important to note that in many organisations, professional development is more nuanced than simply defining progression grids and broad assessment criteria—these are merely table stakes. Professional development in large-scaling organisations also involves the art of proactively ensuring that the right people are tackling the right roles—i.e., assessing if your top priority products and deliverables are being managed by the most suitable (often best) talent.

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In this day and age, a cookie-cutter approach to personal development and growth won't cut it in scaling organisations. A more nuanced approach to enabling both personal and professional success through, e.g., individual development plans, and succession management plans, can set teams up for future success.

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3. Organisational Culture and Employee Engagement: "I ensure that the CEO is role-modeling great culture because it must come from the top; culture isn't born on a piece of paper, values are demonstrated and lived."

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HR shapes and reinforces organisational culture, influencing leaders to exemplify the company's values. Culture must be role-modelled from the top.

As vital 'translators' for senior leadership, HR/People leaders play an essential role in driving the positive changes necessary to foster an inspiring culture. This involves both shaping culture through interventions, but also acting as the ‘voice’ of an organisation, and keeping an ear to the ground to capture feedback, and any emerging issues around company culture.

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💡 Effective interventions from HR and People leaders include the creation of structures, routines, and rituals that uphold the core purpose, values, and guiding principles under which the company operates. This is important as this underpins the essence of improving company culture, through employee and leadership engagement.

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For example, an effective ritual used by many companies is a pulse survey to assess how folks in a company are feeling. E.g., On a scale of 1-10, 10 = strongly agree:

• I feel energised for work
• I feel there are clear opportunities for progression
• I feel that my leaders act following our company values

The call to action from employee engagement rituals should be treated as drivers for retention and productivity. For instance, a pulse survey exercise done well would mean that common key themes are categorized and in turn, translated into meaningful action plans. The best value for the organisation is created when employee engagement/satisfaction survey feedback is widely shared, the next steps are defined collaboratively and therein incorporated into the company’s core objectives.

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4. Operating Model and Performance Management: "I prioritise transparency in communication, ensuring every team member understands their role in our success and feels valued and heard."

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HR and People functions are pivotal in defining a company's operating model—how it functions to deliver value to clients, customers, and shareholders. This involves close collaboration with company leaders, particularly the COO, to ensure that the organisation's structure and processes align with its strategic objectives.

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Key areas where HR influences the operating model include:

• Performance Management: HR leads the development and implementation of performance management frameworks, such as quarterly OKRs, which focus not only on outcomes but also on cultural aspects like employee behaviour. These frameworks help align employee actions with company goals and provide a clear basis for evaluating performance. Utilized properly, a well-defined performance management process sets up the company for success, by addressing performance gaps and rewarding “what good looks like” (usually the optimal combination of the “what” and the “how”).
• Organisation Design: HR is crucial in designing organisational structures that support efficiency and effectiveness. This includes mapping out the right organisational charts to create environments conducive to success and establishing correct reporting structures for feedback and effective management.
• Decision-making Authority: HR helps to define who has decision-making authority within the organisation. This involves setting rules for critical decisions like hiring, firing, and budget allocations, which are essential for maintaining clarity and accountability in the organisation's operations.
• Change Management: HR also plays a key role in managing change within the organisation. This includes guiding leaders and employees through organisational changes, ensuring that transitions are smooth, and that the workforce remains engaged and productive.

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These elements ensure that every team member is not only aligned with the company’s goals but also fully integrated into the fabric of the organisation’s operations, enhancing overall effectiveness and facilitating strategic success.

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5. Data-driven Decisions and HR Technology Adoption: "I leverage data analytics not just for insights but to predict future workforce trends and needs, ensuring our people strategy is proactive, not reactive."

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Utilising people analytics and data-driven strategies is essential for informed decisions regarding workforce management, training needs, and resource allocation. HR departments use data to forecast future requirements, assess the effectiveness of current HR initiatives, and enhance overall business performance.

Financial impacts are also significant; for instance, companies with high employee turnover typically earn four times less profit than those with stable workforces. Analytical tools help pinpoint the causes of turnover and other workforce challenges, enabling targeted interventions that improve retention and performance.

Additionally, embracing advanced HR technology and artificial intelligence is crucial for modernising HR functions.

• These technologies can:
  • Automate routine tasks and reduce hiring bias through AI-enhanced recruitment processes.
  • Enhance employee engagement via personalised interactions using chatbots and natural language processing (NLP).
  • Improve training effectiveness with virtual and augmented reality that offer immersive learning experiences.
  • Promote employee health through wearable technology in wellness programmes.
  • Secure credential verification using blockchain to ensure authenticity in employment histories.

The evolution of HR technology promotes a shift towards shared services or self-service models in HR administration, reducing costs and allowing HR professionals to focus on strategic initiatives that drive business growth. By investing in the right technology and fostering a data-driven culture, HR can significantly enhance strategic decision-making and overall organisational effectiveness.

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6. Compliance and Risk Management: “I protect my organisation and its employees by thoroughly understanding regulations in my operating markets, and translating that into internal rules.”

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Standardising policies and processes as the organisation focuses on expansion/growth (which could be product lines/geographies) so that there is a baseline to draw upon while appreciating that teams have different demographic characteristics that need to be spoken to.

Ensuring compliance with labour laws and regulations, and mitigating legal risks are fundamental responsibilities of HR. Strategic HR practices can proactively address potential issues, protecting the organisation from costly litigation and reputational damage.

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Closing Thoughts

When effectively aligned with strategic business objectives, the HR/People function is not just a support role but a central driver of organisational success. By mastering areas such as talent acquisition, professional development, and compliance, HR leaders ensure the company not only survives but thrives in the competitive global market. For those looking to bolster their HR capabilities, partnering with experts who understand the nuances of your market can be transformative.

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About Us

Are you looking to enhance your HR/People function and drive organizational excellence? Connect with us for insights and strategies tailored specifically to the dynamic African startup ecosystem.

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Pariti Talent: At Pariti, we pride ourselves on being the largest talent referral community in Africa. We support over 160 African startups in accessing top talent quickly through the most effective source—referrals. Instead of relying on the limited capacity of a single recruiter, we enable companies to tap into the best talent referrals from more than 9,000 operators within the African tech ecosystem. Schedule a consultation with us here or reach out directly to kai@pariti.iofor more information.

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Start MEA: Thuvi and her cofounder Natasha are keen to imagine a world where People and Talent are treated as key drivers of aligning a business to its milestones, regardless of its stage. Start focuses on helping founders accelerate growth by getting this right from Day zero through to scale and profitability. Learn more about how they can help your company goals through the right people strategy by reaching out to thuvi@startmea.com

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