Difference between Business HR & Conventional HR

Corporate HR and Business HR are terms used to distinguish area of operations. In organizations which are concentrated on single core business the terms are one and the same.

There has been an increasing awareness in the past decades that HR functions were like an island for cool comfort jobs which are far away from the hard world of real business. In fact I have received many such comments on this from colleagues who were headed departments like Sales, IT, Finance, Customer care etc. In order to justify its own existence HR functions had to be connected with the strategy and day to day running of the business side of the organization.

Here is a small attempt to distinguish between Business HR and Traditional HR. Actually, the question behind writing this small article is “what roles can be identified for the current day HR department in the context of increasing globalization of the corporate domain?”

I used to perform the below KRA in previous organizations apart from the conventional HR operations. I introduced new revenue models in my previous organizations, increased profit ratio, enjoyed the pressure too and stood as a successful leader. Often, I happened to receive a query from HR community that “why not a CEO from HR background?”. Who will stop you if you handle the below KRA.

Business HR:

·    The primary goal of Business HR is to increase employee productivity by focusing on business obstacles that occur outside of human resources.

·   The primary actions of Business HR are to identify key HR areas where strategies can be implemented in the long run to improve the overall employee motivation and productivity.

·  Ensuring Effective Manpower planning, recruitments, training & skills development, provide effective supervision and leadership, grievances handling and retention of team.

·    Plan and direct the organization’s activities to achieve stated/agreed targets and standards for operational, quality, culture and statutory adherence.

·       Review and report performance / progress of the organization on a regular basis & ensure the efficacy of System.

·  Examine the functional operations and identify profit improvement / cost reduction opportunities.

·         P & L responsibility.

·    Maintain and develop organizational culture, values and reputation in its markets and with all staff, customers, suppliers, partners and regulatory/official bodies.

·         Engage, Build and maintain effective long-term relationships with key members of the client team and discussing future Trend in Operations.

·       Create cross-functional project teams to encourage team building & employee development in terms of Knowledge & Skills.

·  Conducting continuous audits on MIS to ensure compliance and sound functioning of the process.

Corporate HR:

Corporate HR can play a significant role in monitoring the implementation of corporate HR policies throughout subsidiaries. HR can thus become "Champions of processes", building commitment of top management, providing training for managers and monitoring these processes. Corporate HR has a social responsibility to ensure future leaders are sensitive to and equipped to deal with global challenges. This creates a new role for HR as ‘guardian of culture’, overseeing the implementation of global values and systems.

However in a diversified organisation there may be need to have Corporate HR and individual SBU or Business HR as each business may need to have unique business requirement.

When Organisations grew and they could see the visible impact of good HR practices in their bottom line, they wanted HR to reach out to where the business is, rather than be restricted to cool comforts of corporate Office. Both are one and the same for a small company where there is only one HR dept but for a large organisation which has large geographical spread or multi business environment, the HR team at the Corporate Office would be called Corp HR and the HR presence in individual businesses would be called Business HR.

For Ex. Recruitment strategies are handled at Business HR level and hiring also happens there. There is a small team of senior recruiters at corporate office to handle corporate openings. However, Rewards are managed centrally. Salary structures, annual increments guidelines etc are all planned at corporate level. Payroll processing is at corporate level however entry is done at business level. Training is handled at business HR level however succession planning is done at corporate HR level.

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Regards

Ram

Ram.k.reddy@adrgroup.in