How the pandemic has accelerated the shift from HR to HD

January 10, 2023

HR is pivoting to Human Development (HD) with stakeholder management becoming more paramount than just delivering profits.

Back in 1998, I attended a programme at London Business School (LBS) and Professor Linda Gratton, then of LBS, said, “HR will be a diminishing species if we do not shift towards being an internal consultant to the business”.   Fast forward to 2022, and there have been great debates as to the shift of Human Resources (HR) to Human Development (HD).

HD is more holistic than HR and covers beyond the capitalistic gains of the business. HD hones into the larger picture and adds value to the business by using people as the means to an end.

Whilst HR focuses more internally within a business or organisation, HD takes on an all-round perspective on human contribution to the business and analyses the impact of the ecosystem in facilitating the delivery of the output, taking into consideration the social, geopolitics and more importantly the value creation from channelling all the available resources and focus on the People element.

The United Nations introduced the idea of Human Development Index (HDI), which emphasises that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone.

HDI looks at three key elements and essentially these can be seen in the UN Sustainable Development Goals, which is a benchmark used by all businesses.  HD is about enriching the lives of people and communities, where equal access to education and resources will then empower individuals with personal choices that bring about personal independence.

The role of organisations evolve as HR is now pivoted to HD with stakeholder management becoming more paramount than just delivering profits.  There are multi-stakeholders which include multiple dimensions covering the whole range of the life cycle of an employee in the workforce and across all segments of the population within a nation, cutting across all areas of interest, including ethical issues.

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Image from United Nations Development Programme

The UN Sustainable Development goals clearly state the 17 goals to be achieved for us to have a better planet to live in and these require several interventions from governmental level to the macro level of large corporations and the role of non-government organisations in work involving micro- organisations across a national economy.  If we are to analyse the 17 SDGs, we can see that in each of the goals there are HD elements being reflected upon.

National policies have a big impact on HD, and we have seen how the two years of the pandemic has either broadened the “Digital Divide” between the different segments of society or sustained a greater awareness of the need to have government interventions in ensuring there is equity in wealth distribution, which in turn leads to the enrichment of communities.

The fact that some countries are doing better in their social and economic indicators speaks of the importance of weaving in the HD element in nation building, which can be manifested in the areas of education, health and social.

Organisations can no longer just exist based on delivering profits as a main contributor to the business, as stakeholders around them are looking beyond this in every angle.  Large banks will no longer approve loans to companies who are not ESG compliance, and this will have a domino effect on the way we do business.

The “S” (Social) component of ESG is a key driver in the sustainability of an organisation.  The enhanced interest to raise standards in the areas of workplace health and safety during the pandemic has now presented organisations with a new landscape and if not carefully managed, can present a cost issue. Organisations also need to pay more attention to ethical issues that can potentially draw the attention of whistle blowers.

The future of work has also dictated the way we manage the workplace and the changing landscape in the marketplace has now forced multiple parties to collaborate, build alliances and be aligned to the changing expectations of employees who now have different priorities.

The gig economy has also disrupted the way we design organisational structure and manage employee engagement. HD will continue to take centre stage for nations at a macro level, and for how organisations manoeuvre as they look to balance profits, people, and the planet.

By Nadiah Tan Abdullah, CHRO of SP Setia and Chair of the ASEAN Human Development Organisation (AHDO). This article was first published in HRM Magazine Asia Nov/Dec 2022 issue. 

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