HR: A Natural Business Ally or a Support Function?

For decades, Human Resources (HR) was seen as a support function — handling payroll, compliance, and employee relations. But in today’s dynamic business landscape, the role of HR is undergoing a major transformation and will continue to evolve in years to come.

Many forward looking organisations now expect HR to be a strategic ally that drives business outcomes, rather than just a back-office function. The real questions that HR teams must ask themselves:

1. Is HR truly an ally of the business?
2. The Support Function or Back-Office Concept is outdated?

HR’s Traditional Role as a Support Function

The old school HR used to be considered as Finance’s step-child due to the fact that salaries are to be paid and money comes from Finance. Even in the 21st century, in some of the third world countries, Head of Finance still oversees HR & Administration and it has been a back-office function focused on administration and compliance.

While HR’s responsibilities are essential for business continuity, they often position HR as a reactive function rather than a proactive one. This perception has led to the view that HR is merely a cost center rather than a profit center or a value-generating entity.

The Shift Towards Strategic HR

The business landscape has changed dramatically in the last two decades. With globalization, technological advancements, and shifting workforce expectations, companies now recognize that people are their biggest competitive advantage. This has led to a transformation in HR’s role from a support function to a strategic partner.

How HR becomes an actual Business Ally?

1. Talent Strategy and Workforce Planning

Let’s bear this in mind that HR is no longer just filling vacancies; it is actively involved in workforce planning to align talent with business objectives. By analyzing workforce trends, HR can predict skill gaps, optimise recruitment, and ensure the company has the right talent to drive growth. A strong talent strategy aligns with business objectives, focusing on attracting, developing, and retaining top talent to drive growth and innovation.

Workforce planning complements talent strategy by analyzing current and future workforce requirements to meet organisational goals. It involves assessing workforce demographics, predicting future talent demands, and implementing strategies such as reskilling, succession planning, and workforce diversification. Effective workforce planning minimises talent shortages and redundancies, ensuring that the workforce remains agile and capable of meeting evolving business challenges.

2. Employee Experience & Engagement

Employee experience (EX) and engagement are critical factors in building a motivated, productive, and loyal workforce. Employee experience encompasses every interaction an employee has with an organisation, from recruitment to off-boarding. A positive EX is shaped by workplace culture, leadership, technology, and opportunities for growth. When organisations prioritise a seamless and supportive employee journey, they create an environment where individuals feel valued, empowered, and motivated to perform at their best.

Employee engagement, on the other hand, reflects the emotional commitment and enthusiasm employees have toward their work and the company’s mission. Engaged employees go beyond their basic job responsibilities, bringing creativity, collaboration, and dedication to their roles. Organizations can foster engagement by recognizing contributions, providing professional development opportunities, and ensuring transparent communication. Regular feedback loops, employee wellness programs, and a culture of inclusion further enhance engagement levels.

3. Leadership Development & Succession Planning

Companies with strong leadership pipelines outperform their competitors. HR plays a critical role in identifying high-potential employees, designing leadership programs, and ensuring smooth transitions for key leadership positions. Leadership development and succession planning are critical for building a resilient and future-ready organization. Leadership development focuses on identifying and nurturing employees with high potential, equipping them with the skills, experience, and mindset needed to lead effectively.

Succession planning ensures business continuity by proactively preparing for leadership transitions. It involves identifying key roles, assessing internal talent, and creating structured development plans for future leaders. A well-executed succession plan minimizes disruptions when key executives or managers leave, reducing the risks associated with sudden leadership gaps. By aligning leadership development with succession planning, organizations can build a robust talent bench, ensuring they always have qualified leaders ready to step into critical positions.

4. Data-Driven Decision Making

With the rise of HR technology — such as AI-powered recruitment, automated payroll systems, and digital learning platforms — HR is helping organisations stay agile and competitive in the digital age. Modern HR is increasingly using HR analytics to drive decision-making. By leveraging data on hiring trends, retention rates, employee engagement, and productivity, HR provides business leaders with actionable insights that influence strategy.

By leveraging real-time data, organisations can make informed choices that reduce uncertainty and improve outcomes. This approach enables businesses to identify trends, measure performance, and optimize processes with precision. Whether in marketing, finance, human resources, or product development, data-driven insights help companies enhance efficiency, minimise risks, and capitalise on opportunities.

5. Diversity, Equity, and Inclusion (DEI)

A diverse workforce is a competitive advantage. HR now plays a key role in implementing Diversity, Equity, and Inclusion (DEI) initiatives that enhance innovation are essential principles for building a thriving, innovative, and competitive workplace.

1. Diversity ensures a broad range of perspectives by embracing differences in race, gender, age, background, and experiences.
2. Equity focuses on creating fair opportunities and eliminating systemic barriers, ensuring that all employees have access to the resources they need to succeed.
3. Inclusion fosters a culture where everyone feels valued, respected, and empowered to contribute fully. Organisations that prioritise DEI benefit from increased creativity, improved decision-making, and stronger employee engagement, leading to better business performance and a more positive work environment.

The Future of HR

The transformation of HR from a support function to a strategic business ally is undeniable. Organisations that leverage HR’s full potential see significant benefits in talent management, employee engagement, leadership development, and overall business success.

However, HR’s role will continue to evolve. In the future, HR leaders will need to be even more data-driven, tech-savvy, and business-oriented. The companies that recognise HR as a core driver for business success — rather than just a support function — will have a competitive advantage in the ever-changing business world.

Final Thought

The million-dollar question is: How HR is positioned within an organisation? In companies where HR is integrated into strategic decision-making, it has become a true business partner, driving growth and competitive advantage. However, in organisations that still view HR as merely a mediocre, manual administrative department, it remains a support function but it won’t last longer.

The future of HR lies in its ability to evolve beyond traditional boundaries, embrace data and technology, and align itself closely with business objectives. As businesses continue to recognise the value of people as a key differentiator, HR’s role as a strategic ally will only become more vital.

About the Author

Muhammad Sajwani is a C-Level HR, Transformation Leader, Board Advisor, Business Coach & Organisational Consultant and Managing Director, Evolve HR. He is an author, columnist and a contributor who besides writing for LinkedIn and Medium, also regularly writes for BizCatalyst 360 and has published around 500 articles. He brings along 30+ years of local & international experience. He is a change catalyst specialising in unleashing the human Dreamgenius through Leadership, Creativity and Change Management. Muhammad has been instrumental in helping organizations come to terms with organizational changes like right-sizing and business process re-engineering. His innovative approach & high personal competence encourages people to not only accept change, but also to excel in it. Muhammad has diverse experience in conducting strategic & management development programs, conferences & events for organisations across sectors. In recognition of his long outstanding services, Global HR Professionals — GHRP & Artificial Intelligence Community of Pakistan awarded him the “Lifetime Achievement Award” in the year 2024.