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The increased importance of HR in corporate management

22/06/2023 2023/06

Why intensive HR work is so important right now

The mixture of a drastically increasing shortage of skilled workers, demographic change and a different understanding of values between the generations is changing our working world. In addition, the striving for personal development and a more conscious approach to the issue of health are presenting many managers with new challenges on a daily basis. 

How do I still find suitable employees? What means do I use to keep my staff in the company? What expectations do the next generations have of the corporate culture? How digital do I have to become as an employer? How do I meet the need for flexible working time models, preventive health care and childcare in everyday business life?

Companies inevitably have to deal with these questions if they want to secure their position in the market or offer their services sustainably. For many of them, it is no longer a question of expansion, but of securing their existence, since the struggle for the sought-after skilled workers is already in full swing. The importance of HR's work has therefore risen sharply. This is because HR professionals have the task of becoming a strategic sparring partner for executives as well as a trusted point of contact for the entire workforce and keeping everyone's interests in view, in contrast to the past when HR professionals were more of an administrative function. Only in this way can they achieve success for the company through their expertise in the employee market and employee retention. It is no longer a secret that the way HR is practiced in the company has a significant influence on the success or failure in achieving the company's goals. And this work goes far beyond the modern term of simply "feel-good".

In order to master the challenges of the future, it is HR's task to already incorporate the multi-layered HR concerns into the corporate strategy and to take on an active role as a provider of ideas and sparring partner. After all, it all depends on the attitude in the company. The sooner processes are adapted and new, innovative concepts are found, the sooner the serious consequences of change can be contained and turned to the company's own advantage. 

Human Resource Management is "The sum of all personnel design fields and individual measures to support current and future corporate development (business development) and the associated change processes (organizational development)," says the Gabler Wirtschaftslexikon.

The most urgent fields of action for future-proof HR work are described in more detail below.

The decline in the domestic working-age population is causing the contraction.
Source: https://iab.de/presseinfo/rueckgang-des-erwerbspersonenpotenzials-bis-2060-um117-prozent/

Every year, 3 million workers from the baby boomers retire. This fact alone will mean that many companies will no longer be able to find sufficient qualified personnel for their operations within the next few years. Immigration alone will not be able to close this gap completely, especially among skilled workers. Even the latest idea, an expansion of working hours for part-time employees, teachers :inside, educators :inside, etc. can possibly dampen the development somewhat, but not stop it. And the situation is also tense when it comes to young talent. Already today, twice as many apprenticeship positions are unfilled compared to 2012.

So the challenge of meeting staffing needs in the company is becoming increasingly complex. Are we still able to find skilled personnel at all? Or will we at least find some who are willing to get qualified? Thus, the topics of employer branding and recruiting remain of paramount importance for companies, and the trend is rising.

Employer branding - making yourself visible with your individual strengths.

An attractive employer brand attracts qualified employees and helps to stand out from the competition. However, the prerequisite for making a strong employer brand visible to the outside world is first of all to become aware of one's own characteristics and advantages of one's company. The more authentically one perceives and reflects on oneself, the more sustainably one can succeed in building and sharpening a strong employer brand and increase its radiance to the outside world. 

Those who pretend to be something they are not will not be able to win over employees and certainly not retain them for long.

It is therefore often extremely helpful to design this analysis process together with HR. It is often extremely helpful to use the trained view of internal HR employees or - often even more effective due to their neutrality and experience - of external HR professionals and to jointly examine the company's own values, culture, processes, structures and goals. "Four eyes see more than two." Looking in one's own mirror often becomes easier when the counterpart takes a higher-level perspective, goes into depth at the right point and contributes to sharpening. 

Winning the "war for talent" with strong recruiting

Strong recruiting, what is it actually? It combines the areas of job description, candidate search, application process, selection process, onboarding and feedback opportunities. Each individual step must be thoroughly adapted to the circumstances and concerns of the company in question. 

Small businesses have different needs than large corporations. The important thing for everyone is that the process is clearly structured and transparent for everyone. The more guidance HR departments give applicants, the smoother the entire application process will be and the less likely it will be that accidental mistakes or delays will be noticed. It is equally important to pay special attention right from the start to the clear and precise formulation of job descriptions that correspond to the actual future tasks and do not represent a castle in the air. Honesty is an important factor for success, so that in the end those are found who really fit together. 
And finally, strong recruiting also includes keeping the threshold of application activity as low as possible for the respective target group. It's not appropriate for every job to ask for an e-mail with all the application documents or to make interested parties spend fifteen minutes working through a highly complex application tool. Sometimes a phone number, a text or voice message via WhatsApp, or a message via social media is enough.

Today, the responsibility for initiating contacts lies largely with the companies, which requires a completely new approach and communication to attract the attention of job seekers and to enter into an exchange. Compared to classic patterns, this market cultivation is significantly more time-intensive and can only be mastered with a high level of expertise and niche knowledge.

The graphic "Generation overview" therefore picks up on various recognized delimitations in the scientific literature.
Source: https://simon-schnetzer.com/generation-xyz/
Source: https://simon-schnetzer.com/generation-xyz/
Companies are finding it increasingly difficult to fill their vacancies.
Source: https://www.kofa.de/daten-und-fakten/ueberblick-fachkraeftemangel/
Source: https://www.kofa.de/daten-und-fakten/ueberblick-fachkraeftemangel/
Germany has been experiencing a growing shortage of skilled workers for many years.
Source: https://www.kofa.de/daten-und-fakten/ueberblick-fachkraeftemangel/
Source: https://www.kofa.de/daten-und-fakten/ueberblick-fachkraeftemangel/
This statistic shows the result of a survey of employees in Germany on the personal reasons for motivation at work. In 2015, around 33 percent of the employees surveyed said that for them a high salary is motivation at work.
Source: https://de.statista.com/statistik/daten/studie/518093/umfrage/motivationsgruende-bei-der-arbeit-in-deutschland/
Source: https://de.statista.com/statistik/daten/studie/518093/umfrage/motivationsgruende-bei-der-arbeit-in-deutschland/

Using the change in values of the generations as an opportunity for dialog

Young people in particular have different values and ideas about the world of work today than previous generations. A change in values is taking place in the world of work, which requires employers to rethink quickly in order to attract the most suitable young employees. Even now, job seekers can choose between different employers and demand their individual ideas in contract negotiations.

Whereas company cars or high bonuses used to be considered particularly attractive, today meaningful work, flexibility in working hours and location, and a good work-life balance are considered particularly desirable. The pure performance principle with rigid standards has had its day and has given way to collaborative work techniques and the pursuit of personal development on the job. As a result, it has become necessary to offer a wide range of benefits that add up to a good package to meet the needs of all employees.
It is a challenge to openly address the differences in work attitudes and working methods of the various generations and to use them as a willingness to change for the benefit of the company. However, if the strengths of the different generations can be successfully combined, this contributes to the positive development of the company.

HR accompanies change

It is HR's job to be a support for the managers. In addition to their consulting function, they can also develop workshops that, as a result, ensure everyone a place in the team with their own strengths, so that the experiences of the older generations are combined with the ideas and skills of the young. There are no blueprints for this, because only individual support of the company management and executives by HR professionals with state-of-the-art expertise, market knowledge as well as coaching and consulting competence leads to results that individually fit the company and promise success.

Increased efficiency through employee retention

You can't do without employees. In any industry, even in times of AI systems, automation and robotics. People remain the most important resource for companies and the heart of HR work. In times of skills shortages and demographic change, it is therefore all the more important to retain existing employees and strengthen them for future challenges. Ideally, employees devote themselves to their tasks with motivation and curiosity, are open to change, eager to learn and adaptable. The more satisfied they are with their work, the better their work results and the contribution they make to the company's success. 

Employee retention therefore has the task of actively supporting each individual in his or her development and fulfillment and creating framework conditions in which they feel permanently at ease.

But how do you do that?

The art of employee motivation - a mix of measures

First of all, it is important to perceive the life situation of the employees. In the future, uniform standards should be flexibly adaptable to the individual circumstances of each person. After all, work - in contrast to the past - no longer takes precedence over everything else, but wants to be reconciled with the respective life situation. For some, it is important to work from a home office in order to ensure childcare or care for the elderly, while others want to work together spatially in order to exchange personal experiences and use the commute as a phase to switch on and off. Thirds prefer a mix of both. Flexible models cannot be found for every job. Services in medicine, elder care, crafts, retail and hospitality, for example, can be difficult to do from a home office. But even in these sectors, it's possible to think about flexible work schedules, childcare options, additional recreational opportunities and innovative monetary incentives, such as team bonuses, gift cards, meal vouchers or sports memberships. The more diverse the mix of offers, the better the individual needs of the workforce can be served and thus retention promoted. 

In addition to the external framework conditions, the way in which employees interact with each other plays a particularly decisive role. After all, psychological well-being in the workplace is particularly dependent on cooperation with one another. If people support each other and actively address recognition and appreciation, this has a positive effect on the overall working atmosphere.

Today, it is important to build trust and reliability through honest communication, to establish constructive feedback not only sporadically but as a regular exchange format, and to live a positive culture of error that allows learning for everyone and sees it as part of human existence. Nobody is perfect, neither managers nor employees!
Meaningful work, co-determination and modern leadership approaches

Employees have long since ceased to be mere recipients of orders. No, self-determination and acting on one's own responsibility are more important than ever in many professional groups today. A code of values or ethics also plays a role here. After all, the question of the meaning of work - not only with regard to the environment, sustainability or health - is omnipresent.

The use of collaborative work techniques, the integration of modern, partly agile leadership styles, new types of learning and education concepts, as well as personal training and coaching can help to promote co-determination and self-efficacy of each individual and to value and reward the respective support performance for the team to the same extent as the individual performance. After all, in an increasingly complex working world, teamwork is especially important!

Excursus: Health-related mindfulness in working life - a positive trend

Not only since the Corona pandemic has the focus on the topic of mental and physical health already been in the public eye. Nevertheless, the impact of the pandemic has caused a great acceleration of mindfulness towards the topic. For example, mental illnesses such as depression or anxiety disorders are no longer taboo topics, even in the workplace. On the contrary. The desire for a healthy working environment and preventive health care is omnipresent and is also expressed as a demand to employers. 

While communication, team development and project management used to be at the forefront of company training programs, requests for resilience training and mindfulness formats are on the rise. This is often a challenge for small and medium-sized companies, as they do not have a human resources development department that develops training and prevention concepts for the workforce and implements them in-house. 

What kind of prevention do I need to offer? Is an ergonomic workstation and a hazard assessment enough, or do I need to hold regular talks that also shed light on mental well-being? And am I allowed to do that at all?

For this, HR professionals and health service providers offer package solutions for manageable costs for consulting and implementation.

Optimization and digitization of HR processes - a must for the future?

"Rethinking HR management" is the motto. 

The focus on HR strategy, employer branding, recruiting and employee retention demands enormous capacities in HR departments and among managers. Not every HR professional is equipped in their skills to take on the urgent tasks. In many places, HR staff need to be professionalized through training and coaching. 

At the same time, compliance issues determine everyday life in HR administration. The number of new regulations and laws has increased continuously in the past. In the significant debate about diversity and equality, it is more important than ever to implement the standards and requirements in accordance with the rules.  

In order to be able to efficiently cover an increased variety of tasks with scarce capacities, it is necessary to optimize HR processes and use digitization to one's own advantage - for the creation of a lean and efficient administration. A system-supported approach ensures compliance with standards and transferability of work within the team, for example, in order to be able to safely cushion vacation and illness as well as employee changes and simultaneously work in parallel from different locations. 

Whether digital personnel files, time recording, certificate creation or applicant management - the variety of optimization options for workflows and HR topics is large. Even small improvements in processes can have a big impact, ensuring that HR work in small and medium-sized companies can withstand the demands of competition and at the same time free up resources for other HR tasks in your team.


HR professionals are needed to actively address the new challenges and create measures. So that everyone in the company can develop their full potential and make an efficient contribution. 

HR professionals - both internal employees and external service providers - must specifically take on an active role with a 360-degree view for all stakeholders in the context of corporate management and offer themselves as providers of ideas for growth and change as well as sparring partners for executives and company owners. They have the urgent task of focusing the perspective on the manifold challenges of the changed working world, developing new concepts, adapting best practice examples to the respective company situations and steering the implementation of the measures. Every change offers the opportunity to realign and become better - above all with the necessary passion for human interaction. 

It is not uncommon that the necessary internal resources are not available for this change. HR as a Service (HRaaS) is a solution that helps companies deal with HR challenges. By outsourcing HR processes to an external service provider like ARTS, you can save time, resources and costs without compromising the effectiveness and efficiency of your HR functions. By working with an experienced HR partner, you can ensure that your HR requirements are met professionally and reliably, in addition to extending the expertise of your own staff as the process progresses.

About the Author
Katharina Jung-Pragal
HRaaS & Development Consultant

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