Over the past 20 years, our relationship with customers has evolved. Whereas we once only thought of them transactionally, we now think in terms of customer experience and the kind of relationship we want to create.
Unfortunately, the employee relationship in most workplaces has not evolved in the same way. Employees feel like easily replaceable, disposable assets that are taken for granted. Too often HR approaches employment as a risk management exercise, such as minimising the risk of hiring the wrong person for the job or anticipating legal or reputational risks from inappropriate employee actions.
But the tides are turning. HR and, more importantly, the C-suite is waking up to a new reality. To be successful in this new world, HR must demonstrate that it can maximise the potential of its people. And the first step to doing this is recognising the agency of employees.
Employees own their careers
Agency is the belief that you have the power and ability to make decisions and take accountability for your actions. Employees with agency understand how they can contribute to an organisation in new and different ways. Companies ranging from fast food provider Chick-fil-A to luxury hotel chain Ritz-Carlton marshal the power of this agency by giving frontline employees the ability to resolve customer issues without having to escalate to a manager.
Another feature of employees with agency is that they take responsibility for their career. They realise: ‘I’m no longer at the mercy of my company. They don’t get to decide my future – I do!’
This sense of agency and power can get tricky for both HR and managers. You hired someone for a specific role with clear responsibilities, but they grow in both their capability and their ambition. That makes them restless, with one study finding that nearly a third (31 per cent) of employees are so invested in creating a new role for themselves that they would take a pay cut to change positions.
Maximising human potential by seeing the whole employee
In response, HR needs to move from viewing people as assets to seeing (and accepting) their whole selves. That means maximising the potential of every employee – not just for the job they do today but for the jobs they will do in the future, regardless of where they end up. Now, there’s a risk to this approach. If you invest in the employee and they end up leaving, it may be seen as a waste of resources. But if you don’t invest in them, they are more likely to leave.
Let’s be honest with each other
The most important step in this change in HR approach is to acknowledge that jobs aren’t forever. When we hire someone, there is a tacit understanding that, at some point, the employee will leave the company. Either they will use their agency to find a new job, or there will be a difficult discussion about why they aren’t a good ‘fit’ anymore for the company. But we do nothing to prepare for that.
There’s a better way. In the book The Alliance, the authors describe starting a new job as signing up for a tour of duty. It’s clear from the start what the job entails, the definition of success and the duration. Then as the end of that tour draws near, the employer should ask: do you want to continue in this role? Do you want to do something different? Do you want to leave the company?
Setting this expectation upfront completely changes the nature of the relationship. HR gives the employee the power to decide what their next step is, acknowledges their agency and supports them as they explore new opportunities, both within and outside the organisation.
HR as a transformation catalyst
For this to be effective, HR needs to work with management to learn about each employee’s whole self and their long-term aspirations. They should use this to leverage people’s strengths against the organisation’s goals. This should be reflected in what is discussed and captured during development discussions and performance reviews.
Lastly, for this to happen, HR must move from being a mostly administrative department to taking on a transformational role in the boardroom. It’s important for HR to have a seat at the table, especially when the conversation is about a long-term strategy for moving the employee relationship in a different direction.
The future of HR demands that we see employees as humans, not assets. We need to acknowledge that they want to contribute their strengths and skills to a company’s mission. Helping them maximise their potential is critical to our success as leaders.
Charlene Li is chief research officer at PA Consulting