The HR function has four possible roles within the company: transactional, functional, strategic and positional. Each corresponds to a different philosophy about employees and how they contribute to the company’s development. Most often, companies do not go beyond the strategic role, but the positional role is becoming more relevant to medium and large companies in the conditions of the Romanian labor market.
The transactional and functional role of HR
The transactional role is mainly related to processes and compliance, either with the requirements of the Labor Law or with the requirements of the company’s operation. The functional role is mainly related to recruitment and (eventually) training, so employees can effectively participate in the value creation process in the company.
From the point of view of the contribution that HR brings to the organization, most companies with an HR function are in the process of blending the transactional and the functional roles. It is worth mentioning that these first two roles, described very succinctly here, are important and the HR specialists who are delivering them every day have a relevant contribution to the good course of the company.
The strategic role of HR
The huge potential of the HR function is accessed by very few companies, even if business dynamics and demographic challenges make this a necessity. But in companies where this approach is a reality, the HR manager is equally involved in achieving business goals, like all other executives in the executive management. In this case, the HR team consists of specialists who understand the business development strategy, know the indicators and deadlines for reaching them in the business plan, know the specificity of the market in which the company operates and have a systematic and concrete dialogue about strategy and goals with business unit leaders.
In this context, HR does talent development, works with salary surveys, has a strong focus on expanding the employer brand within and outside the company, deals with succession plans for management roles, and is strongly connected to the business environment. It is a function that has the mission, along with leaders, the creation of an organizational culture (values, beliefs, behaviors) that give a competitive advantage to the company. It also assures the use of technology and capabilities existing in this digital era to provide superior HR services to the organization.
The positional role of HR
The positional role presupposes that in the HR function, in addition to all the above mentioned, adds one more dimension – the predictive one. The HR function must use technology, including Machine Learning and Artificial Intelligence, to collect and analyze the environment inside and outside of the organization to predict the company’s best HR positioning for the next 2-3 years. It is a role that enables the management of organizational processes re-design to better adapt to business strategies or market changes, but also to provide leadership skills to help the organization respond to new business demands and the rapid pace of change.
If to date, predictions were made of the financial performance of the company, with variables that could generate very pessimistic, realistic or optimistic scenarios, so that decision-makers in the organizations could have a perspective of possible developments, the same is now necessary for the human resources area.
A great hockey player, Wayne Gretzky, once said he did not skate to the place where the puck was, but to where the puck would go, which made him absolutely invincible. In the same way, as part of the positional role, the HR function should provide top management with information, leadership, and action programs whereby the organization will “position itself” in the place where business development plans, technology developments, and those of the labor market meet, in an agile, highly-sustainable way. And in order to deliver this kind of value to the organization, the HR department needs well-trained people, including on business strategy design. A positional HR department also needs technology-enabled integrated HR systems and leadership behaviors.