Why HR Leaders Are Crucial for Culture Change

It is now time for HR to step up to the plate, capture the opportunities the new year brings, and reconfigure their organization to align with the changing world of work.

In today’s competitive, ever-changing landscape, corporate culture is an increasingly important part of a business, and HR departments play a crucial role in setting the cultural tone. Two of HR’s main functions in 2023 will be to create connection in a hybrid world while retaining their top talent, and the culture they promote will directly affect these functions.

HR leaders can start championing the cause and transform words into actions. HR leaders are the agents of change who can promote awareness and guide the transition from what the culture is to what it could be. Also, when HR leaders have their finger on the pulse, they can make sure the culture strategy stays on target and verify the organization’s return on investment.

In the world of hybrid work, and the rising need to retain employees and upskill them, HR needs to take the lead by getting the organization focused on a thriving culture. They need to play a central role in creating and sustaining the culture their organization aspires to have.

Connection Is Critical in the Hybrid Work Era

It goes without saying that HR and the corporate world as a whole are witnessing tremendous changes. So how are they going to handle all of this in the most effective and efficient way possible? It starts with HR leaders redefining the culture, which, in turn, redefines hybrid work strategies. According to McKinsey, the pandemic has sped up digital transformation in organizations by three to four years. For instance, LinkedIn data shows that remote jobs, which make up around 20 percent of all jobs on LinkedIn, received more than 50 percent of all job applications. This shows that organizational resistance to hybrid working will put their business at a competitive disadvantage when trying to retain and attract top employees. Not all organizations have realized this, and they continue to hold onto outdated strategies from a seemingly bygone era.

Another glaring example of the need to adapt is that according to a recent survey from ADP, 64 percent of employees would consider quitting if they were expected to return to the office full-time. Hybrid working has become a part of modern work culture, and organizations that continue to fight this change are on the losing side of an ongoing battle.

To be effective in a hybrid world means dealing with transformative change, and building engaged, collaborative teams. However, in our view, it’s clear most organizations lack the skills to effectively deal with those challenges. Their employees are feeling disconnected, which has led to an overall decline in their engagement. As a result, organizations are struggling not to lose progress and talent.

It’s now more critical that HR and leaders across every division focus on cultivating social connection, support people through change, and help employees feel a sense of belonging and inclusion in the organization. When leaders can deepen connections among their hybrid employees, they help build a culture of collaboration, accountability, trust, empathy, and psychological safety—no matter when or where they’re working. However, for most leaders to do this, it will some upskilling in soft skills training.

Upskilling, Reskilling, and Cross-Skilling

The importance of upskilling leaders and managers for soft skills has arguably never been more key to organizational success.

Reskilling, upskilling, and cross-skilling are all about expanding the potential of your current employees. As anyone in HR knows, if you can’t retain your best, how can you be the best? With the World Economic Forum predicting that about 50 percent of all jobs will require upskilling, reskilling, or cross-skilling to meet the needs of the market in the next two years, there is a lot of training to be done.

The Deloitte Global 2022 survey states that developing the next generation of leaders is a top challenge for 55 percent of CEOs. And 40 percent of CFOs say talent shortages are one of the top business risks.

This is where HR plays a pivotal role. One of the major trends we see for 2023 is HR’s investment in upskilling leaders especially as it pertains to soft skills such as Emotional Intelligence. According to a recent IBM report, soft skills dominated the list of core competencies that global executives are looking for from their employees, bypassing technical skills for the first time.

To build these skills, HR will invest in leadership development training and programs to strengthen their experience and capabilities. This is where a company like IHHP comes in with our Last 8% Culture system.

Last 8% Culture

Our Last 8% Culture system helps leaders build high-performing cultures that engage and keep their best and brightest. We help companies build their culture in months, not years. Our systematic approach helps teams establish a lasting, high-connection, high-courage culture in six months.

The truth is that culture does not exist across an organization; it principally exists in teams.

Actually, even that’s not correct. Culture only exists in teams that have been together long enough that they have been through difficult, pressure-filled situations. When they see their leaders at their most raw and most authentic, that’s when culture is created. Culture is not created by some arbitrary values on the wall, but by what happens in difficult, pressure-filled moments, between team members who work, struggle, and face adversity together, in what we call the Last 8%.

In our training workshops each leader must own and model the key concepts of a Last 8% Culture. One of the main ways to do that is through Emotional Intelligence (EQ).

As noted, organizations are facing considerable challenges in today’s business market from low employee engagement due to hybrid work and low retention rates. All these factors are driving HR leaders to re-examine their company culture to engage and retain talent. As the pace of change continues to accelerate, training is quickly becoming a competitive advantage for companies.

The biggest issue for HR teams seems to be winning over the hybrid workers. As per a recent Gartner survey, only 24 percent of hybrid workers report feeling connected to their organization’s culture. The same survey reveals that organizations that succeed in connecting employees to their culture can increase employee performance by up to 37 percent and retention by up to 36 percent. HR understandably can play a huge role in the former to influence the latter.

To implement this, it starts with HR taking the lead and spreading the mission to every leader across all teams.

Change Is an Opportunity for Growth

We see 2023 as a year of immeasurable opportunity for HR leaders. However, there are several challenges to overcome. We are entering a new era: a connected hybrid era that sees organizations focus on empowering their employees and prioritizing the leaders who not only have IQ and technical skills, but high EQ skills. This power skill of EQ will be one of the keys to establish the culture HR leaders have always wanted. It is now time for HR to step up to the plate, capture the opportunities the new year brings, and reconfigure their organization to align with the changing world of work.

A company’s culture is imperative to its strategy and significant in the organization’s ability to retain its best employees. The right HR leader can make culture, through change, both influential and successful. And they can empower employees to stand by it and take ownership of it.

Having a clear corporate culture is vital for companies as it’s also the key to keep employees engaged. If employees identify themselves into the culture of their companies, they will be highly motivated and support the business and its changes. To that end, HR must promote a thriving Last 8%-type culture. This is not something on paper, hanging on the wall, or written in a manual—it must be visible and lived by each team member.

Adrian Rasiff
Adrian Rasiff is the Marketing manager at the Institute for Health and Human Potential (IHHP). For more than 10 years, he has had a strong focus on writing, advertising, and marketing campaign management. He’s an aggressive learner who is intellectually curious and passionate about culture training, leadership development, growth mindsets, and Emotional Intelligence.