HR entrepreneurship - The Confluence On “The Business Of HR”

Dedu Ajith-John

December 11, 2017
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Many human resources professionals are taking on a new role. Instead of simply leading, managing and working in the profession, they're using their knowledge to become entrepreneurs and create products and services that are transforming the HR industry in a way that it has never been impacted before.

In India, the size of the HR tech market is estimated at about USD $700 million annually and growing. There is an increase in HR transactions as well. That is the key trend that panelists discussed in a special session at the SHRM India Annual Conference 2017, moderated by Pankaj Bansal, Co-Founder & CEO - PeopleStrong. Presenting the point of view of CHROs were Sanjay Dutt, Head - Global Capability Development & India HR, EXL, Vivek Paranjpe, Senior Advisor & Facilitator - SHRM India and S. Venkatesh, Mgmt. Board Member & President, Group HR - RPG Enterprises. To present the insights from an HR entrepreneur's perspective were Aditya Malik, CEO & MD - Talentedge, Sanjay Lakhotia, Co-founder - Aamoksh One Eighty and Ishan Gupta, Managing Director - Udacity India.

The CHRO Perspective -

Venkatesh from RPG Enterprises initiated the discussion by raising a fundamental question that resonates with all CHROs across the world who are involved in buying HR services from external experts. He said "Tell me something that I don't know". That set the theme for the other challenges shared by the panel:

  1. Meeting a unique need- In a market that is flooded with me-too types of undifferentiated HR service offerings, CHROs might not want to invest in a service that does not serve a unique need for their organizations. The biggest challenge that HR entrepreneurs need to address is that before entering this space, they should spend time and effort in understanding the need of the market or actual gaps that exist.

  2. Managing a complex industry landscape - The business of HR is far more complex today than in the past. Some years ago, the labour or IR consultants, HR academicians and recruitment consultants formed this space. Now, more services are being offered and there are at least five different categories - Recruitment firms, Staffing firms, Leadership and Organization Development consultants and firms, the large HR technology firms and the HR Freelancers and Executive Coaches. With this kind of range and number of players, CHROs need to focus on informed decision-making and these firms need to work on building connections. 

  3. Reiterating the importance of human skills - Sanjay, from EXL' talked about a new trend: India has increasingly become a base for senior leaders. Alongside that, a second trend is that technology and innovation have collapsed the value chains. As a result, technology has eaten away the core processes. Despite that, the true differentiator is the human skills. So focusing on Emotional Intelligence and Creativity, are what will set HR-driven organizations apart, from their competitors. A mindset change by these HR businesses is also required. Sanjay shared that while they might be Indian firms or based out of India, they need to understand that the challenges and opportunities are global.

  4. Acquiring the new skill-set - The profile of talent that has shifted into the business of HR needs to learn several new skills like Business Development, client management, managing an entrepreneurial set-up and so on. These are skills that need to be acquired through experience and external interactions. HR professionals who are able to learn these are the ones who can drive their business further.

  5. Understanding that it is a symbiotic relationship - Vivek emphasized the importance of realizing that it is a symbiotic relationship. Companies need the HR service providers for their expertise and the consultants need corporates for their livelihood. HR businesses need to know that a phenomenal track record and word of mouth, as well as good personal branding are the drivers of growth for them. Their focus should be on maintaining that credibility no matter how small or large they are.

The HR Entrepreneur Perspective -

The business of HR is complicated. It is also dependent on funding and exposed to the issues related to the venture capitalist ecosystem. Their challenges of upsizing, IPR and having a product that can be monetized are real. Even so, the business of HR is coming of age in India. Some underlying concerns that came up during the discussion were: -

  1. Closing the Innovation gap - Aditya, from Talentedge, spoke about the challenge related to HR and Innovation. There is a gap in this space because while Artificial Intelligence and Machine Learning are disrupting the world around, very few HR professionals actually make the effort to understand them. They seem to be waiting to see the impact and then react. Another valid concern that Aditya raised was about HR being so busy with hiring and firing, that they have lost the opportunity to think differently. This tends to reflect in HR businesses, and with the entrepreneurial ecosystem in its current stage of growth, that extent of innovation is needed. The solution is to ask our teams to challenge themselves to generate the next big idea.

  2. Changing one's mindset as the business grows - "A recent research study has shown that there are very few great mid-sized consulting companies in the HR space," said Sanjay from Aamoksh.  He connected this to the fact that professionals need to keep changing the way they look at business in terms of people size. Those who were aspiring to start their own HR services firm should be aware of this change that is key to business growth. These points are therefore the places where new ways of delivering the business have to start.

  3. Reviewing the services is a long process - Organizations in India take a long time to review HR or learning services which are technology driven.  "We as a nation are at the forefront of IT services, yet the long sales cycles could cause us to miss the next phase of the technology revolution," said Ishan from Udacity. It seems as though CHROs take a call on the services to buy, but the panel had mixed views since there were those who believed that the IT and finance heads also have a role.

The HR professionals from the audience brought out pertinent issues, such as the decision-making time involved in larger organizations vs. smaller ones when purchasing an HR solution. This is because the core aspects like understanding the product, the need for it and its fit within the organization are the parameters. Pankaj explained how at times a junior person from the team engages, and then realizes he is not empowered to make a decision.

In conclusion, we need to be cognizant of the fact that CHROs should be responsible for being honest and upfront about the need for any product, and the HR solution providers need to spend time understanding the company, the three types of buyers - commercial buyer, technology buyer, end users (that is, the HR community) and finally, engage with all three simultaneously, not sequentially. 


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