News

'HR is growing as a result of digitalization'

23 October 2017

Interview with Kobe Verdonck, published in CHRO Magazine, 2nd edition, 2017. 

While some claim that HR will no longer exist in the future, Kobe Verdonck argues that digitalization means the role of HR in organizations will only grow. The CEO of HR solution provider, Raet, outlines the HR transformation he sees happening within both the international market and Raet itself.

You believe the the role of HR will only grow. Why?

The HR function will become ever more important in the future. The big difference that you can make as a business, you make through people. Now more so than in the past. Just look at the war for talent, at Silicon Valley and the sports world: the talent issue dominates everywhere. And that’s where HR can make the difference.

But to be able to focus on that core business HR needs to give up its administrative role. The 'old HR' shouldn’t really take place within the company’s own organization anymore. An organization is better off outsourcing it or placing it in a shared service center. But that also requires letting go of part of the old identity, and we see many HR people having trouble doing that.

How did your HR department approach this transition?

Here HR is fully geared towards the HR Business Partners (HRBPs), so that they can translate our strategic goals for the employee, and into roles, functions and organizational processes. 

All the other work, such as salary processing and absenteeism, as well as the helpdesk function, we have outsourced. Freeing up the HRBPs to help achieve our goals.

What topics do your HR Business Partners work on?

Their contribution is around talent: the attracting, binding and developing of talent. Innovating, for example, is an important goal of us. If we develop new functionalities, or set up a new service, HRBP looks at what people we have for it in-house, how the team can best be put together to achieve this objective, and whether we need to recruit people from outside for that.

For this, we consider it important that HRBPs focus on vitality, and whether people are happy in their role. Raet employees make Raet what it is. So we need to ensure that those employees feel good, that we invest in engagement with the company, and that people have sufficient growth opportunities. Our people are our most important asset for achieving our goals.

A CEO would say that, wouldn’t they?

That's true. But it's not just about saying it. You must also make it happen. The companies that can do that are the most successful in their sectors. That’s something I also see with our customers. For us, happy employees mean happy customers; and vice versa. We recognize that fact in our strategy.

This means, of course, that you must also ensure that HR has some clout within the company. Which is why we’ve made the role of HR even more important within our organization.

How have you done that?

First off, we outsourced the HR back office to our own colleagues. That is a hygiene issue, which must be completely up to par. And only then can HR focus on the strategic goals.

After that, our HR team was able to evolve. We have turned the HR manager into a CHRO profile. So for three years now, HR has been on the board. For this, but also for other functions, we have recruited new people. And just as in other teams that are changing as a result of digitalization or market developments, you see a shift where some people blossom and see the changes as a huge growth opportunity. But there are also employees who feel the new profile is not for them, or have other ambitions, and they start looking for a place that will suit them better.

You are giving HR a more important role. Others argue that HR will no longer exist in the future. What’s your take on this?

HR as we know it will disappear completely, I agree. Administrative processes are increasingly being digitalized. The part of HR that’s left over calls for other competencies and a different set-up. Obviously these digital processes generate buckets of data. The future HRM professional will be someone who can make predictions and decisions based on that data. Not all current HR directors can do that. But anyone who doesn’t have their administrative processes up to par will soon not be taken seriously anymore in the boardroom. The Dutch market is at the forefront here, but there is still room for improvement.

Nevertheless, few companies have reached this point yet, certainly if we’re talking about predictive analytics...

That’s true. Data will, by definition, become increasingly important. But predictive analytics still has to prove its worth. You can’t do everything using predictive analytics. In the area of absenteeism there is much to be gained: if your employee satisfaction levels fall, your absenteeism rates are almost certainly going to rise, and your reputation decline. So you can invest in that area in advance.

But not every issue can be converted into data: how many people will I lose if I increase the pay bonus by 1% rather than 2%? You can crunch some relevant numbers here, obviously. But ultimately this is about human behavior, and that cannot be predicted. After all, if everything were predictable, we’d no longer need to do anything at all.