Human resources (HR) is undergoing a transformation. Many large and successful companies, including the likes of Google and IBM, have replaced traditional HR teams with new people teams. Their goal: to maximise the value of employees and drive business results.
We spoke to Ross Seychell, chief people officer (CPO) at HR software company Personio and Sophie Theen, CPO at financial services company Oakam to find out what they see as some of the key functions of new people teams.
From people operations and development, employee brand and analytics, in this guide we explore six key functions, finding out how they differ from traditional HR and what are the challenges they face.
1. People operations
Some consider people ops a sub-function of HR, while others claim it’s the evolution of HR to become more strategic, transparent and holistic. The primary difference is not so much in the daily tasks, but in the approach to understanding employees holistically as individual contributors, rather than as a resource to be calculated and managed for efficiency.
Research overwhelmingly indicates that companies with high employee engagement and healthy work culture outperform their peers across all business metrics, including profitability, productivity and customer satisfaction, so building a strong people operations team is of central importance to a modern, competitive company.
Key responsibilities for people ops include traditional HR tasks such as onboarding and payroll, but also shaping company culture and building employee satisfaction. The key strategic role for people ops is in understanding how recruitment, culture, employee engagement and development, among other things, are connected to the organisation’s strategy and, ultimately, the bottom line.
For Sophie Theen, CFO at financial services company Oakam, the modern people function is shaped around culture and employee experience rather than compliance, “the staff police” of traditional HR.
“Oakam’s setup is fully employee experience focused. This means we run like a product team and get on with making our employees’ journeys as rewarding and satisfying as possible rather than focusing on when and how we get a seat at the table, which to me is a common distraction for people teams,” said Sophie.
In a time where more and more teams are moving to a remote working model, distributed teams face challenges such as collaboration and coordination, sometimes even across time zones. For people ops, a key goal will be in developing systems and programs that help to build rapport and establish culture and team cohesion among remote colleagues, as well as establishing clear communication processes and habits.
For Ross Seychell, CPO at HR software company Personio, he sees this is an ongoing challenge that many people teams will be tackling now and into 2021.
“I expect to see companies need to review their end-to-end employee experience living now in a permanently hybrid world. This is where teams and individuals will be hired, onboarded, work, collaborate and deliver in multiple locations at any time.
“This is no small feat. Not only does it involve how and where people work, but how to onboard and supervise them, plus how to hire them, pay them and stay within legal and immigration rules. And whilst we’re there, ensure they’re engaged, healthy, productive and stay with us,” said Ross.
For more insight into Ross’ people team at Personio, read our conversation with him here.
2. People development
With increasing pressure to innovate alongside continuously shifting market demands, a great product or service is no longer enough to ensure the survival and success of a business. One day it could be in-demand and the next day it could be obsolete. Organisations have increasingly realised that having engaged, committed and talented people is actually their competitive advantage.
As a company’s most valuable asset, it pays to take care of them. And, in recent years, development has received greater attention as a way to do this, with millennials expecting organisations to provide continuous opportunities to learn and grow.
‘Training’ and ‘development’ are often used interchangeably, but there is a difference. Training generally faces an immediate challenge and teaches the knowledge of skills needed by an employee to do a specific task (e.g. CMS training for a marketing executive) or role (e.g. management training for a newly promoted employee), whereas development is all about long term goals.
Usually spanning several months or years, people development is a process of self-improvement that promotes the development of confidence and ambition, and corresponds to the goals and interests of the individual. The aim is to help employees build successful careers, regardless of their job description.
The challenge for many businesses, especially cash-tight startups, is that it can feel like a costly investment. But research from the Association for Talent Development found that companies offering comprehensive training programmes have over 200% higher income per employee than companies without formalised training, suggesting that upfront investment in development could pay for itself in no time.
3. Employer brand
In the last two decades, branding has become a central concept in organisational and social life. Many companies now recognise the value of using branding to help shape the employee lifecycle as they seek to build an engaged workforce and shape a positive work experience. And many people professionals have embraced the language and techniques of branding to enhance their strategic influence and credibility.
Ross at Personio sees employer brand as a key function to get right early on when shaping your people team.
“There are a few [essential functions] from my experience…culture and employer brand define how you work together, what you offer and what you stand for. Getting that clear early and what makes your company unique - it will help you find/ attract the candidates you need,” said Ross.
Employer branding presents people teams with an opportunity to learn from marketing techniques and apply them to their work. It’s important that people teams work collaboratively, for example with colleagues in marketing, public relations, internal communications and corporate responsibility, to share expertise and get maximum benefits from developing an employer brand.
The challenge for people teams is to ensure that brand values are not merely rhetoric but they reflect the actual experience of employees. Getting it right can be an extremely effective marketing tool for an organisation - people who like the job they do and the place they work become advocates for the company.
The digital revolution has transformed recruitment. In the space of a decade, there’s been a move away from spreadsheets, emails and post-and-pray job ads to an array of innovative tools and techniques that are helping people teams to find the right candidates more efficiently and to track and analyse the process from start to finish.
Some of the recruitment tools and techniques shaping hiring strategy now and into the future are:
- Log all your candidate information into one system
- Use that data as a potential pool of workers for similar roles in the future
- Reduce admin and streamline the process
An extensive list of Recruitment tools are available in our Top HR Software Tools list.
5. Compensation and rewards
Employees have more power over their careers than ever before, with greater insight into what other companies are offering and far greater ease to change jobs, forcing employers to focus on employee experience and rewards to retain top talent.
All great people teams need HR professionals that specialise in compensation and rewards. They are responsible for devising policies for an organisation’s salary, bonus and incentive schemes, and then in charge of administering, managing and evaluating them.
Compensation and rewards can include:
Offering the right compensation and rewards begins with recruitment. If you’re not offering the right compensation for new vacancies, then you’re not going to be attracting the top performers. And proactively reviewing and evaluating compensation can help you retain your people and avoid churn. But the challenge can be in finding the balance in rewarding employees fairly and in the most cost-effective way for the company.
For companies seeking out new ways to compensate staff - especially in the start-up world - offering employees equity share in your business has been found to increase motivation and provide a sense of collectively pursuing a goal that benefits everyone, contributing to team spirit.
Historically the only catch has been that employee share schemes can be complicated and difficult to maintain, but now there are smart solutions that can offer a streamlined way of keeping track.
6. People analytics
Also known as HR or workforce analytics, people analytics is the use people-data to solve business problems.
By combining data collected by HR systems, such as payroll and absence management, with business information, like operations performance data, people analytics provides people teams and stakeholders with insights into their workforce, HR policies and practices. Ultimately, it can help to improve evidence-based decision making.
Oakam’s people team uses data to inform everything they do. “We’re fully data focused as we try and avoid having unproductive meetings or strategies that go nowhere because there was no data to justify our needs and plans,” said Sophie.
To glean useful insights, it is crucial for people teams to develop systems for collecting and maintaining data from all aspects of the people function - from recruitment to development and compensation. While this can be a challenge, new, integrated tech stacks are invaluable in helping people teams to gather clearer data more efficiently and to analyse the results.
Compared to the traditional HR function, which has long been focused on enforcing compliance and reducing liability, the modern people team is taking a far more proactive role in shaping and developing their company’s most important commodity: its people. It now plays a key role in helping to shape a business’ strategic decisions by understanding high-level business objectives.
But despite their increasingly expansive responsibilities people teams have remained lean, with on average just two members of staff per 100 employees. Developing the right smart software solutions is essential to take on some of the more manual tasks, enhancing and complementing the skills of its team members.
Pento’s automated payroll software is designed to integrate with HR software like Personio and Bamboo HR to share and transfer data between payroll and HR.
To find out more about what smart software is available to support your team, access our HR Tools List here.