Amid this year’s uncertainty and with the onset of an economic recession, many or most SMEs have tightened their purse strings and, understandably, are looking to make cost savings where possible. But where should savings be made? Not HR, argues Ben Kiziltug, Country Manager UK & International Lead at Personio.
According to recent research carried out by Personio, 39% of HR managers expect budgets to decrease in the next 12 months. However, at a time when organisations face ongoing challenges when it comes to managing their workforce and business – whether due to the onset of another lockdown, ever-changing advice regarding the return to the office, or Brexit – businesses may need to lean on HR more than ever.
We speak to Ben Kiziltug, Country Manager UK & International Lead at Personio about the vital role HR teams will play in helping businesses navigate the difficulties that lie ahead, how businesses can empower their HR function to become a more strategic partner, and why now is not the time to decrease HR budgets.
Why is HR still important?
If people are the heart of an organisation, then human resources is its backbone. After all, whether recruiting new talent, onboarding employees, developing their skills, looking after them as they work for the business, or managing redundancies or dismissals, HR teams manage the whole employee lifecycle and ensure that their business employs the right people with the right skills and expertise.
And, as businesses reacted to unprecedented challenges at the start of lockdown this year, HR demonstrated the vital role it can play, especially in times of crisis. In a study we carried out this summer, we found that eight out of ten HR managers say the HR role has been integral to helping the business successfully adapt to the new normal, while nine out of ten rated the function’s response to the crisis as ‘good’ or ‘very good’.
Now, in the midst of a second lockdown in England, and advice and regulations around the return to the workplace continue to change, HR teams will be critical to supporting individuals and businesses as they navigate the new normal. Who can you retrain and redeploy in another role? How can you keep your workforce motivated and engaged as you continue to work from home? These are questions that HR teams are best placed to help answer.
How can SMEs make the most of their HR function?
During this challenging period, HR teams had a unique opportunity to demonstrate the importance of an effective people strategy and, according to our latest research, HR teams are eager to maintain a more influential and strategic role in the future. When asked, 71% of HR managers surveyed said HR has added strategic value to the business during the pandemic. Meanwhile 80% agreed that it’s important for HR to maintain this more strategic role post outbreak.
And, with a second wave threatening a V shaped recovery, it’s clear that businesses need solid HR strategies in place in order to keep their business on the right track. Collaboration between senior leaders and HR leaders – and an “all hands on deck” team-based approach – is crucial to ensuring that businesses are informed and able to act on the best people strategy and advice. Promisingly, many businesses embraced this more collaborative relationship this year, with 71% of HR managers saying the HR function has been more closely involved at board / senior team level during the outbreak.
How can businesses make HR more strategic?
For HR teams to be empowered to take on a truly strategic role going forwards, they need access to the technology, data insights and systems that allow them to create informed strategy and reduce the burden of administrative tasks. After all, this lack of resources has a real impact on how effective HR teams can be; our research found that during the pandemic, 42% of UK HR managers say that the HR function has lacked the data and tools it has needed to support the business in the best way possible.
Equipped with data insights and with the time to create smart people strategies, HR teams can be true partners to businesses, working alongside senior leaders to ensure that they have the best people working for them, and can adapt to ongoing changes and challenges.
So now, with businesses still facing so much uncertainty, it is not the time to cut HR budgets. The road to recovery is a long one, and SMEs will need the best people and people strategies to move them along it.