The strategic reorientation of Human Resources (HR) is one of the central developments in modern companies. For some time now, HR has been transforming from a purely administrative department to a strategic partner that works closely with management. The creation of the Chief Human Resources Officer from around 2020 is the manifestation of this development, as is the creation of the Chief People Officer. This transformation is necessary to ensure that HR policy directly supports corporate objectives and keeps pace with the demands of dynamic markets. After all, we are in an era of constant transformation – whether digital transformation, HR transformation, culture transformation or finance transformation.
The holistic approach of the HR bridge between business development and the workforce
Today, HR is no longer seen as a purely operational function (managing salaries, hiring and contracts, etc.), but as a strategic partner that connects business goals with employee needs. This holistic approach focuses on aligning business development and the well-being of the workforce. Because by now, everyone understands that employees are at the core of every company and its success.
HR as a strategic business partner
In this new role, HR works closely with management to ensure that the HR strategy is fully aligned with the company's long-term goals. Data-based insights and a deep understanding of the business model are extremely helpful in this regard.
One important aspect of this transformation is the proactivity of HR. We will come back to this aspect repeatedly in the course of this article. In the past, HR responded to demands and problems, whereas today it is required to develop proactive solutions that support business growth. For example, this means identifying and developing the right talent before bottlenecks arise, or driving cultural initiatives that promote innovation. After all, no other department knows better what expertise is currently available in the company and which are missing for future goals. ‘HR follows business’ is a central principle here: every HR measure – from recruitment to training – contributes to the company's overall goals.
To fulfil this new role, the necessary skills must be developed. This requires a deep understanding of the business, technological skills and the ability to make data-based decisions. One application in particular comes into play here: people analytics. People analytics helps the HR department to make informed decisions and to clearly quantify the value contribution to the company's success. In the next section, we will take a closer look at this.
Data-driven decisions and technology
The use of technology and data is now playing a central role in strategic decision-making in every department, not just in human resources. People analytics enables a range of insights: comprehensive insights into the workforce, better talent management and also the ability to prepare for future challenges.
Furthermore, data-based decision-making processes offer the opportunity to optimise personnel strategies and increase employee engagement. Modern HR software solutions, such as HR management systems (HRMS) and people analytics platforms, enable automated data collection and analysis. Analysing data on employee turnover, performance and engagement can help identify weaknesses in the company and take appropriate action. This preventive approach minimises risks that could arise from unforeseen personnel bottlenecks and contributes to the proactivity of the HR department. Both in the short and long term, the efficiency of HR processes will improve.
Another advantage of integrating technology in the HR department is the ability to measure the success of HR initiatives. Decisions based on data are proven to be more successful because they are based on concrete, quantifiable insights. This gives HR greater credibility and strengthens its position and credibility as a strategic partner in the company.
Focus on talent management and change management
Another central pillar of the strategic realignment of HR is the focus on talent management and change management. Organisations need to attract, develop and retain the right talent. Talent management refers to the targeted development of employees to ensure that they meet future requirements. Ideally, a company retains these skilled employees in this process.
Successful talent management begins with onboarding and extends throughout the entire employee experience in the company. HR must ensure that it continuously develops its talent. This ranges from training initiatives to mentoring programmes – to help employees reach their full potential. Talent management is so incredibly important – because organisations that invest in talent management are not only better prepared for change, but also increase their employee retention and create an innovative and future-oriented work culture along the way.
HR as a driver of cultural change
In addition to talent management, HR also makes an important contribution to change management. The HR department must ensure that managers and employees at all levels understand the relevance of soft skills such as empathy and collaboration and integrate them into their daily work. Ideally, HR departments should proactively develop programmes that improve both individual and team performance.
HR leaders must continue to put people at the centre of business activities. As EY also emphasises, a proactive, data-driven and people-centric approach is key to realising the full potential of the workforce.
Companies are increasingly faced with the challenge of adapting to new market conditions, technological developments and cultural changes. This is where HR must act as a change agent and support the workforce through these change processes. This includes developing change programmes that not only ensure that employees acquire the necessary skills, but also that they are emotionally and mentally prepared for the change. This is where employee wellbeing comes in, which is also mainly the responsibility of HR.
Change management is not just a reaction to external factors, but a central component of the company's strategic direction. It is up to HR to involve employees in the change process through effective communication and participation and to actively shape the corporate culture.
HR also steers the transformation of the work culture by empowering teams and managers to support change. This consistently proactive role of HR in cultural change shows that it is no longer just a supporting function, but a leading one that helps shape the future of the company.
Talent management and change management complement each other perfectly: while the former focuses on the long-term development of employees, the latter ensures that the company can respond flexibly to change. These two areas set the course for securing a company's competitiveness and growth for the future.
Human performance and sustainability in the HR strategy of the future
People are therefore becoming an increasingly important resource. Among other things, this is also due to the focus on human performance, as Deloitte notes. In their report Global Human Capital Trends 2024, they show that companies are looking beyond pure productivity targets and are relying more on human abilities such as creativity, empathy and collaboration. These qualities are recognised as long-term success factors, as these abilities also increase a company's adaptability and innovative strength. Creativity and innovation arise from the interaction between employees who are inspired and supported to develop new ideas and implement them together.
Sustainability as a success factor
Another element highlighted by Deloitte is the link between sustainability and human performance. Companies that focus on the long-term development of their employees while also taking their social and environmental responsibilities seriously achieve higher rates of success. This holistic approach will not only be important for employee retention in the future, but also for how the company is perceived by outsiders. Employees want to work for companies that not only strive for short-term profits, but also advocate for sustainability and social change. Gen Z in particular values corporate brands like these.
Conclusion
The upshot is this: a strategic reorientation of HR in close collaboration with management must ensure that HR policy reflects the corporate objectives.
Thanks to a data-driven approach using people analytics, well-informed decisions can be made that also measurably increase the value of the company. In addition, there is a focus on talent management and change management, which not only ensures the development and retention of talent, but also the company's ability to successfully manage change in line with the workforce. Employee wellbeing plays a role here that is often overlooked.
Other topics of a people-centred corporate culture are human performance and sustainability. Organisations that drive this development forward ensure a future-oriented, highly innovative workforce. HR is thus no longer just a supporting function, but actively leads the transformations that make companies successful today and in the future.
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