In businesses we now have another question to ask – what is the difference between HR (some organisations call it Human Capital) and the new term that Google made popular – People Operations?
From HR to Human Capital
For the longest time I have been asking the question – what is the difference between HR and Human Capital. Don’t get me wrong, I understand what Human Capital is about – I have studied the work of economists Gary Becker and Theodore Schultz, who invented the term in the 1960s to reflect the value of human capacities. They believed human capital was like any other form of capital to improve the quality and level of production. This would require an investment in the education, training and enhanced benefits of an organisation’s employees.
Human Capital is the economic value of a worker’s experience and skills. This includes assets like education, training, intelligence, skills, health, and other things employers value such as loyalty and punctuality.
I don’t think I know of one single organisation that actually puts a figure to this, or measures and manages the increase or decrease in the value of their Human Capital over time.
From HR to People Operations
So, when HR suddenly starts to call itself People Operations, is it going to be the same? Are we going to carry on doing what we’ve been doing for close to 100 years but now with a different name? Or, does People Operations mean a fundamental shift in the way people are managed in organisations now, and in the future?
Having studied this across a number of organisations, the differences, as I seem them, are as follows:
| “Old” HR | People Operations | |
| Primary difference | Resource to be calculated and managed for efficiency | Understand people holistically as individual contributors |
| View of People | As Resources | As Customers |
| HR Focus | Managing, rules, and policies | Designing work so that people want to be there – present, engaged, and proud of what they do |
| HR Drivers | Compliance and limiting organisational liability | Maximize the value of people to drive business results |
| HR Responsibility | Compliance with processes | Employee Engagement, Culture |
| HR Responsiveness | Respond to issues and emergencies as they develop | Understand high-level goals and create deliberate, proactive programs to help the organisation achieve those goals |
| HR Scope of Work | Works within boundaries of “traditional” HR practice | Takes a wider view of the business, it’s objectives, competitive environment and financial goals, and uses People tools to address them |
| How they function | Told what decisions to give effect to | Brought into strategic conversation because of insight and opinions |
| Acts of busy-ness | Tactical, low value generating activities | Collaborate with business leaders to build career paths, develop skills, drive employee engagement, decrease attrition, drive increased business value |
| Market Differentiator | Product / Service | People |
| Power | Company had the power | People have the power |
| Management | Theory X | Servant Leadership |
| Basis of decision-making | Bureaucracy | Data |
| Metrics | Vanity Metrics | Actionable Metrics |
| Structure | Functional, serial work flow | Value-based streams |
| Style of work | Process-based work models | Results-based work models |
| Team Structure | Functional, hierarchical | Self-managed, Autonomous |
| Teams | Functional | Cross functional |
| Careers | Hierarchical, functional | Cross functional, multi-directional |
Now I’m really wondering, with all the hype around Agile HR that is going on today, what’s really happening? Is HR just going through another “rebranding” as they did with Human Capital, or is there a real shift happening?
Engage with us and do our HR to People Operations Shift Assessment. You will then know the answer to this question, and will be able to take the appropriate actions to move you in your preferred direction.
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TalentAlign helps organisations create a workplace where the organisation and its people can grow and thrive and achieve their highest selves.
- Speaking Engagements – Gail Sturgess is available to talk at public and private events
- Workshops – We have a range of workshops relevant to Agile HR, from 3 hours to full-day
- Facilitation – We don’t consult – we facilitate. That way we help to build capacity and leave a sustainable process for your organisation going forward.