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Boardroom-bound HR pros need better business sense

Asia’s so-called war for talent is giving new significance to the role played by HR departments and the way they are perceived within their organisations. With companies placing even greater emphasis on the need to recruit, retain and suitably reward people who can operate effectively and push forward expansion plans, senior HR executives can play a much fuller role in advancing new initiatives and shaping corporate strategy.

The proviso, though, is that they must be ready – and qualified – to do so. For instance, they must have a good understanding of how the broader business world functions. Ultimately, anyone who wants a voice at board level can’t just be an occasional contributor – they must be able to hold their own.

“We are seeing more HR specialists joining executive committees and taking a seat in the boardroom, where they are playing a very strategic role in the
development of the business,” says Francis Mok, president of the Hong Kong Institute of Human Resource Management (HKIHRM). “But I can also see that a lot of senior HR executives are not ready for that. The biggest barrier is that they are not as literate as they need to be in financial and technical areas, and this creates a glass ceiling.”

To break through this barrier, individuals must have the drive to keep learning and accept responsibility for self-improvement. The HKIHRM provides assistance by offering a clear framework of standards, targets and recommended courses useful for acquiring specific skills and gaining more of an all-round perspective. The institute also encourages people at the appropriate level to take MBAs and general business courses.

“In future, the role of HR will be more about designing effective jobs and organisations,” Mok says. “Executives will have to be change-agents who manage a company’s culture and human capital, and can see what is needed to improve the business.”

In doing this, it will be as important as ever to deal with aspects of recruitment, staff engagement, training, compensation and benefits. But going higher – to earn a seat in the boardroom – is not just about performing defined tasks well. It also depends on other factors, such as creating value for the organisation and having a discernible impact on the bottom line.

“Too many HR executives don’t even know what a 1 per cent reduction in staff turnover would mean for their company’s overall costs,” Mok says. “Professionals who want to move up the career ladder have to know what keeps the chief executive awake at night. They should also make more effort to talk to the accountants, sales managers and IT people to understand day-to-day issues and how everything works.”

The message is clear: HR specialists in Hong Kong and China will have increasing opportunities to influence company strategy in the future, but their views must be well formed and worth hearing.

Neither should any HR professional expect an easy ride. Compared with their counterparts in Australia and Britain, for instance, local HR professionals already work longer hours on average, and there is no sign that will change. The widespread corporate emphasis on achieving growth in Asia – especially China – will simply ratchet up the pressure. In many cases, too, compensation and benefit packages are only now starting to catch up with those offered for comparable posts abroad.

“Organisations are realising that if they don’t have good HR people, they will start to fall by the wayside in the next two to three years,” Mok says. “Even though, on paper, HR is a backoffice role, it is now regarded as critical, in the same way supply-chain management is. This is driving up demand and means companies [see the link between] recruitment, retention and future success.”