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HR analysis - How prepared is our HR department for the future?

15/06/2023 2023/06

From Human Resources to HR to People&Culture

"What, you want to study HR management and HR analysis? But you don't fit into the HR department at all!" Oops, I looked irritated at first. This conversation with a person with professional experience took place almost ten years ago, but it still stuck in my mind. The person I was talking to had worked for a long time as an office administrator and department assistant in a traditional company in the automotive industry. As a representative of the personnel department, she had serious-looking ladies and gentlemen in formal business attire in front of her, who spoke about important and secret matters exclusively with the higher management level. Since they also guarded the personnel files, they were not allowed into the HR department's office. 

Since the 1990s, the task and image of the relevant department have changed, as has the name: at some point, most companies no longer managed personnel, but managed human resources, so that nowadays we often speak of HR (Human Resources). Even more modern is the approach of taking care of People & Culture - apart from the efficient use of manpower, employees should ideally feel comfortable in the company in order to increase employee loyalty in times of a shortage of skilled workers. The ladies and gentlemen from the 90s in dark suits would probably indignantly turn the corners of their mouths here, whereas in smaller companies the HR function has always been closer to the action and also dealt with people and their emotions. Today, HR analysis is also an important part of modern personnel management. It involves the systematic study of HR data to gain valuable insights and information for strategic decision making. By using advanced analytics techniques and tools, companies can gain valuable insights into their HR processes, performance and development.

HR as a partner of business and management

For a long time, the HR department was not considered part of the value chain, but only a supporting function and cost factor. In quite a few companies, therefore, attempts are made to keep the number of employees in HR in a certain ratio to the total number of employees. In times of rapid change and shortage of skilled workers, however, the valuable contribution to the entire company becomes more visible; managers increasingly appreciate the advice of people experts on how to get their teams to perform even better. In this way, HR is evolving from pure personnel administration and recruitment into a partner that also advises on strategic issues.

HR as an internal service provider for employees

Even if HR is not the "friend" of employees, many employees in HR see themselves as service providers for all employees. It's about keeping their colleagues' backs free so that they can take care of their work in the best possible way. In today's service society, we expect speed and transparency, as well as the ability to communicate through various channels. People who have questions about their vacation entitlement or payroll want to be able to get competent answers just as conveniently as they would from their phone provider (alright, bad example...). The reverential aura that surrounded the custodians of personnel files in the 90s has given way to an attitude of expectation. Especially in routine processes, employees expect their concerns to be handled smoothly.

" Human resources can be done by anyone"?

Particularly in smaller companies and start-ups, there is often no specialized HR department; the activities that arise are handled by the person who feels most called upon to do so. These one-person shows often accomplish amazing things, sometimes even without in-depth training in HR. As a subset of commercial professions or business degree programs, the content of these training paths often sounds like "a little bit of everything." These factors feed the prejudice that you don't need any special knowledge or talents to work in the People & Culture environment. In this way, we often find people in German companies who keep the most necessary processes around employee recruitment and support running, and the management feels vindicated: HR work goes by the way side. What is overlooked here is how much the HR generalists have often acquired themselves or have set up themselves. However, for HR work that is fit for the future, it can be worthwhile to include expert knowledge: Have we thought of everything that is relevant to our company or may soon become relevant? How robust and efficient are our processes knitted? Do we need more templates for regularly recurring activities? Are we prepared for business growth or changes in the labor market in the way we work? 
It may well not be worth it for smaller companies to hire an extra person to do extensive HR analysis to answer these questions. On the other hand, the prospect of having experts look at the existing structures is perhaps quite reassuring?

Activities in HR: a wide field

If we look at HR work in companies with the metaphor of going to school, there are many different subjects on the HR report card: recruiting/staff acquisition, onboarding, personnel administration, employee support, employee retention/retention management, personnel requirements planning/workforce planning, performance management, compensation&benefits, employer attractiveness and personnel marketing, labor law, personnel development, ... Perhaps you have not taken all subjects in your HR area at the same time, and of course, as in school, not everyone is equally good or equally interested in all subjects. Even this list makes it clear that it is not easy to keep track of everything. Depending on the structure and philosophy of the company, some of the activities can be assigned to managers - or perhaps it makes sense to combine some activities in a centralized manner? Which HR subjects should you prioritize, and where is it enough to have the know-how available in case you need it? In which subjects will your company need more expertise or time resources in the future? Unfortunately, there can be no universal answer in 1-2 sentences at this point. Especially if focal points and working methods have evolved on their own over the past years, it is worth taking stock. It may be that the structures that have grown up feel comfortable and familiar, but could be organized more elegantly or stably on closer inspection.

How important are structure and processes?

As already indicated above: the ideal structure of a human resources department does not exist. In general, the goal of HR work is to ensure that enough employees with the right qualifications are available with commitment and motivation for all tasks in the company. The People&Culture function ensures this by carrying out all necessary processes in a legally secure, speedy and competent manner. This goal is sometimes made more difficult by structures that have grown up over time or processes that have not been updated - for example, if a merger results in different ways of calculating bonuses within a company, the HR department is saddled with a lot of work. The more detailed the bonus agreements, the more error-prone and cumbersome the associated process becomes. If this annual task falls to people who prefer to supervise employees instead of dealing with the Excel spreadsheet of their predecessor, employees' expectations can easily be disappointed. A bonus payment, which is actually intended to recognize performance and increase motivation, thus becomes a tough affair with several phone calls until everything is finally calculated correctly. This example shows that the structure of the company and its compensation and benefit regulations, the structure of the HR team through the distribution of tasks, and the design of the process and the associated documents and process steps all have a significant impact on the performance of HR and thus on the satisfaction of employees and managers. 
As part of a comprehensive HR transformation based on an HR analysis, often combined with a digitalization initiative, such "old habits" are usually cut off as well. However, it is not always necessary or appropriate to immediately operate the very large adjusting screws. A modern structure of the HR function as it is written in the book does not necessarily suit companies of any size.

Are we doing everything right?

"You'll see if you're really standing correctly when the light goes on!". In the children's shows of the 80s and 90s, it was so beautifully simple: you decide on an answer, line up accordingly, and after a brief moment of suspense, you get clear feedback. In day-to-day HR work, there are (hopefully) individual moments when you can feel the alignment of your own actions with the higher-level goals, and the reactions of your contacts confirm that something is going right. Especially when you have internalized the service concept of HR, you like to look at happy faces when a concern around HR topics could be solved. The opposite, namely clearly expressed dissatisfaction, is also clearly noticeable. In this case, however, one often asks oneself: Is it my fault that the employee reacted in a dissatisfied manner? Or is it the HR software used, the process, or the structures that do not allow for sufficient speed and flexibility? Where are we already doing things right, but what might be going wrong?

The most difficult question to assess right or wrong is when there is no clear feedback. For example, if everyone involved has already become accustomed to a cumbersome process, hiring will just plod along. Many framework conditions are slow to change, so the less-than-elegant recruiting process attracts fewer and fewer applicants over the years, and attracting skilled workers only gradually becomes more tedious. How long is the existing way of working still right, and when is the time to modernize? Put another way: What are we doing right, and what could we do better?

Ideally, you think about such questions before serious difficulties arise or you are forced by external events to adjust your own way of working. Here, it is important to detach oneself from day-to-day business in the short term in order to identify those fields and processes where action may be needed in the coming months or years by taking an honest stock of the situation. "Never change a running system" is a popular phrase when you don't have an overview of necessary or possible changes. Nevertheless, one needs a clear assessment of whether the running system is still working well enough, or at what point the "running system" starts to stumble too much, or should be replaced by an even faster and more stable running version. In IT, the administrator can provide help and advice, but it is also worthwhile to exchange ideas with experts in HR.

What are we perhaps still missing to become really good?

There is no such thing as an instruction manual for HR - reports on best practices can be inspiring, but sometimes also discouraging. As a first step, it is advisable to take stock of the situation in order to look at the functionality of the current processes and structures and to detect possible "blind spots" in operational or strategic issues. Perhaps there are small things that can already bring about an improvement in HR work as a quick win. Perhaps selectively applied expertise can put HR on a more secure footing. Perhaps there are issues that are not yet acute but will become relevant in the near future. The earlier you uncover your growth areas in HR, the better you can decide how to deal with them. An analysis of your HR structures and processes can give you the impetus to change those things that haven't felt right for a while. If you have a question mark about whether your previous approach is watertight, a positive confirmation can be liberating - and a negative finding clearly shows you where you stand. A SWOT analysis also provides valuable information for securing the future of the company when it comes to personnel.

As part of our HR consulting services, we offer you the opportunity to review the alignment and processes of your HR department in a straightforward manner. Our HR Check-Up package includes answering a customized online questionnaire and the analysis of your HR documents by our experienced HR consultants. In addition, we arrange at least one joint appointment to dive even deeper into your HR world and conduct a comprehensive assessment. Depending on the package you choose, we offer different levels of analysis to meet your company's individual requirements. Our HR Check-Up provides you with valuable insights to identify potential for improvement and make your HR department more efficient and fit for the future.

About the Author
Valeska Szalla
Development Consultant
Since 2017 I have been writing my success story at ARTS, where I can always add a new chapter through the various projects I have been involved in.

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