Turning people strategy into profit: The ‘revolution’ of HR

The human resources function can play a significant role in driving business growth, being innovative, and achieving revenue goals, as they balance complex strategic responsibilities against upholding fundamental HR principles.

In a recent episode of The HR Leader Podcast, Jane Edgar – a consultant who has served in senior HR roles in several major Australian companies – talked about the importance of HR’s role as an enterprise value driver, and what has held HR back from fulfilling certain functions over the years.

Edgar highlighted the change in the space, contrasting with the early days of how to initially just “get a seat at the table”, but now HR experts ultimately need better business skills in general.

As such, Edgar indicated that in past times, there had been a lack of cohesiveness between HR and operations departments of a business, which accordingly restricts companies from fulfilling their functions.

“A lot of challenges businesses are facing at the moment – like AI – we see it often as a tech revolution…it’s not; it’s a people revolution – it’s about behavioural change.”

Edgar described the drastic change in narrative around HR, from what was once the supposed obliging and accommodating department, to now a genuine force in meeting the vital objectives of a business.

“HR has been considered the soft, buzzy part of the business; it’s about keeping people happy, and hasn’t always successfully linked some of the work it does to key business outcomes – I think we have got much better at that [nowadays].”

As organisations place greater emphasis on people and culture, HR is earning recognition alongside traditionally influential functions such as finance and marketing.

By improving employee engagement, retention and performance, HR is assisting businesses in mitigating unnecessary costs, increasing productivity, and driving stronger revenue growth, thus exhibiting its growing strategic value.

“In many businesses, there is still a lack of understanding of the support that HR can provide to drive business outcomes,” Edgar said.

Pointing toward ways the HR language can be implemented in reaching key business objectives and finding out how it can increase business revenue, Edgar noted the enhancing nature of HR, rather than just focusing purely on regular mandatory employee needs, such as onboarding and contracts.

“If your HR function is seen purely as mitigating risk, or compliance, or just onboarding people, until you can get a point where you can speak to the business in a language that they understand and respect, [HR employees] won’t get a seat at the table to be included in conversations around what it means for workforce plans.”

Whilst the HR landscape is ever-changing with more complexities being added to the role to assist in reaching a business’s goal, Edgar indicated that it is imperative to take it one step at a time, rather than doing everything at once.

“The foundations have got to be there from the start; you do have to pay people correctly, [the workplace] has got to be healthy and safe and ensure that training is done.”

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