Over the years, the role of Human Resources in organizations evolved significantly and drastically. Today’s HR has already transcended its traditional functions of hiring and payroll and over the years, HR has been the heart (as it connects the business to its internal stakeholders, i.e, the employees and workers), of organizations, and has proven to be the backbone of business by evolving into a strategic partner, driving business decisions through sound human capital management. However, many professionals enter the HR field with unstructured knowledge of its principles, relying solely on personal experience or ad hoc learning. While practical knowledge is valuable, it has been shown in research that lack of structured HR knowledge is costly, deeming inefficient work, mishandling of compliance, and poor team management.
HR has evolved into complexity over the years
As HR transformed over time, it went beyond its traditional administrative and payroll functions. The more that the market economy becomes more volatile and complex, the management of manpower and human capital goes along with this volatility, as the market also opens up new possibilities and circumstances. Organizations today expect people managers and HR practitioners to play strategic roles – essentially focusing on workforce planning, capability building, and leadership development. As stated by the Society for Human Resource Management (SHRM, 2021), companies with well-rounded HR professionals report a higher rate of employee satisfaction and retention. In addition to these expectations, HR departments and managers are also expected to have higher competencies in dealing with rapid technological advancements, updating labor laws, and even on how to deal with employee well-being.
According to Dave Ulrich (2017), HR now functions as a strategic partners in companies, making it also a flourishing addition to business acumen. However, to function as such, HR professionals (and even non-HR professionals) need to be acquainted with studies on basic HR principles. Organizations that under play HR development are often challenged by issues on employee motivation, lack of awareness of evolving labor regulations, and performance management issues. As such, organizations cannot leverage optimizing human capital and even struggle to sustain organizational growth.
Poor HR Knowledge is too costly
The lack of basic HR principles ripples not only organizational concerns but also has great implications for financial and operational functions. Companies without properly trained HR professionals often encounter compliance penalties, resulting in financial losses. High employee turnover is another costly effect, as replacing employees often bloats hiring costs. Operational inefficiency is also an effect of a lack of structured learning & development approaches, along with leadership indecision.
As Becker and Huselid (2006) argues, organizations that invest in HR development experience a measurable increase in efficiency and profitability. Their results show that structured HR processes (grounded on fundamentals) leads to improved decision-making, better utility of workforce capabilities, and stronger employee retention. McKinsey & Company (2022) supports these findings showing that HR professionals with structured practical education drive business success faster, due to the right appropriation of human capital needs, as well as addressing people management concerns concisely. Thus, HR expertise is not only beneficial – it is an imperative for business to thrive and sustain long-term scalability.
Understanding HR fundamentals addresses management pitfalls
While learning the ropes of people management in a practical sense can provide one with knowledge enough to navigate roles, a structured HR fundamental program provides deep-rooted insights, especially on the rationale of people management and HR functions. Through structured HR programs, companies can mitigate concerns relative to labor regulations, employee engagement, and organizational capacity building. The structured approach allows HR practitioners to make sense of HR Management and can endorse strategies to blend it into company operations. As stated by the World Economic Forum (2020) organizations with full attention to HR training facilitate better employee experience and are more productive. Understanding and knowing how HRM as an ecosystem works is already an advantage in the growing complexity of the economy.
Investing in a strong HR foundation
As the demand for skilled HR professionals increases, it is best to grasp the fundamentals of HR, facilitated by seasoned HR professionals and educators. The Philippines is still considered to be among the growing economies in the Asia Pacific Region, this growth must be supplemented by proficient HR professionals who knows HR fundamentals by heart. As such, the Philippine HR Institute (PHRI) opens its Foundation Certificate in Human Resource Management (FCHRM) to provide the necessary tools for you to contribute in the HR space, as well as to enhance your HR career journey.
Learn more about PHRI’s Foundation Certificate in Human Resource Management (FCHRM) here bit.ly/fchrminfo and join our class by accessing this registration link: phri.com.ph/fchrm-registration/.
References:
Becker, B. E., & Huselid, M. A. (2006). Strategic human resources management: Where do we go from here? Journal of Management, 32(6), 898–925.
McKinsey & Company. (2022). The evolving role of HR: How training impacts workforce development. Retrieved from www.mckinsey.com.
Society for Human Resource Management (SHRM). (2021). The impact of HR training on organizational effectiveness. Retrieved from www.shrm.org.
Ulrich, D., Kryscynski, D., Ulrich, M., & Brockbank, W. (2017). Victory through organization: Why the war for talent is failing your company and what you can do about it. McGraw Hill.
World Economic Forum. (2020). The Future of Jobs Report. Retrieved from www.weforum.org.