We are living in a tech-driven corporate world and the role of Human Resources (HR) is evolving rapidly. As HR increasingly takes on strategic responsibilities within companies, the question arises: Are HR professionals at risk of losing the human touch that is so central to their role?
Loganathan Balakrishnan, Chief Human Resources Officer at Habit Group, talked about it during an insightful discussion with People Matters former CEO Ester Martínez on the latest episode of Unplugged season 3.
The conversation delved into the rising influence of HR in the boardroom and the challenges that come with it. While the growing importance of HR is a positive development—reflecting a broader recognition of human capital as vital to business success—Balakrishnan emphasised the importance of staying grounded in the “human” aspect of HR. As businesses increasingly rely on HR to manage not only personnel but also shape strategic decisions, Balakrishnan warns of a potential danger: the risk of focusing too much on metrics and efficiency at the expense of employee well-being and development.
The rise of technology in HR
As companies adopt more advanced technologies to enhance HR functions, the balance between technology and human interaction is more critical than ever. “Technology is driving a qualitative leap forward in HR,” noted Balakrishnan. His remarks centered around how the role of HR has dramatically shifted from being a function focused on administrative tasks—such as payroll, compensation, and benefits—to one that is pivotal in shaping company culture and driving employee engagement and retention.
During the interview, Balakrishnan, a seasoned HR leader with more than 20 years of experience in talent management, shared his insights on the evolving landscape of HR, especially in the age of artificial intelligence (AI). He underscored the tremendous advantages that technology, particularly AI, has brought to the table for HR professionals. From automating tedious tasks to providing real-time data analytics, these tools have transformed how HR teams operate, streamlining operations and enabling more informed decision-making.
AI can automate resume screening and speed up recruitment processes, freeing up time for HR professionals to focus on more strategic initiatives. However, Balakrishnan cautioned against relying too heavily on technology. “While AI can improve processes, it cannot replace the empathy, intuition, and personal engagement that define a truly successful HR strategy,” he said.
Maintaining the Human Touch
One of the key takeaways from the Unplugged session was the critical need for balance between technology and the human element in HR. “You can never let go of the human touch in HR practices,” Balakrishnan asserted. He emphasised that while technology can streamline operations, the essence of HR remains people-oriented. The most effective HR practices are those that foster a genuine sense of connection between employees and the organisation. This connection is something that no algorithm can replicate.
Balakrishnan highlighted the importance of creating a people-centric culture, which is crucial for high employee engagement and retention. He explained that leaders play an essential role in building such a culture. “People leave managers, not companies,” he noted, emphasising how important it is for leaders to connect with their employees on a personal level. Understanding employee needs and aligning leadership styles with organisational values are key factors in fostering a positive work environment.
Workplace culture as a lifestyle
During the interview, Balakrishnan shared his unique perspective on workplace culture. He argued that culture is not just a set of policies or perks but a “lifestyle.” This view of culture extends beyond traditional metrics like work-life balance or hybrid work policies. It encompasses the overall experience employees have while working at the organisation—from how they interact with their colleagues to how they feel valued and supported by leadership.
“When you join an organisation, you’re looking for a culture that aligns with the lifestyle you want,” Balakrishnan explained. He stressed that this holistic view of workplace culture is vital not only for attracting top talent but also for retaining them in a highly competitive job market.
This concept of culture as a lifestyle resonates deeply with modern employees, who are increasingly seeking purpose and a sense of belonging at work. It’s not just about offering a competitive salary or flexible working hours. It’s about creating an environment where employees feel part of something larger—a place where their contributions are recognised, and they have the opportunity to grow.
The importance of leadership in shaping culture
Leadership plays an integral role in shaping and maintaining workplace culture. Balakrishnan believes that leaders must set the tone for the organisation. They need to embody the values they expect their employees to uphold. By doing so, leaders create a workplace that is not only productive but also fulfilling.
“Leaders who connect with their employees, understand their needs, and align their leadership style with the company’s values are critical for creating a strong workplace culture,” he remarked. When employees feel valued and supported by their leaders, they are more likely to remain loyal to the company, even in challenging times.
This leadership-driven approach to culture has helped Habit Group, under Balakrishnan’s leadership, achieve significantly lower attrition rates compared to the industry average. For instance, while the attrition rate in Malaysia’s retail sector sits at around 26% for 2023, Habit Group has successfully kept its rate much lower. Balakrishnan attributes this success to a combination of factors, including a well-structured compensation system, robust benefits, and most importantly, a strong organisational culture.
Understanding what employees value
Balakrishnan also emphasised the importance of understanding what employees truly value. Today’s workforce is no longer satisfied with just a paycheck. Employees seek flexibility, well-being, and a sense of purpose in their roles. This shift in expectations has forced HR professionals to rethink their strategies for attracting and retaining talent.
The key, according to Balakrishnan, lies in aligning HR practices with what employees genuinely value. “To effectively hire and manage top talent, HR leaders need to understand the business, not just HR,” he stated. This means that HR professionals must adopt a business mindset. It’s not enough to focus on traditional HR functions like payroll and benefits. HR leaders must also understand the broader goals of the organisation and how their work contributes to achieving those goals.
Balakrishnan provided an example of this business-oriented approach in action: “If I don’t understand the business, how can I attract the right person for the role? It’s not about hiring a title; it’s about hiring someone with the right skill set who can drive the organisation forward.”
Balancing strategy with humanity
As HR takes on a more strategic role within organisations, the challenge is to balance the increasing reliance on technology with the need for human connection. For HR professionals like Loganathan Balakrishnan, the key to success lies in maintaining the human touch at the heart of talent management.
AI and digital tools have undoubtedly transformed the HR landscape, making operations more efficient and enabling data-driven decision-making. However, as Balakrishnan emphasised throughout his conversation with People Matters, the future of HR depends on leaders who understand the importance of empathy, personal engagement, and fostering a strong workplace culture.
In a world where employees are seeking more than just a paycheck, organisations that succeed in creating people-centric cultures will be the ones that thrive. By focusing on the human element, HR leaders can ensure that they not only attract top talent but also retain it—keeping the heart of talent management alive and well.
As People Matters Unplugged Season 3 dives “From Inspiration to Action,” we focus on turning strategic insights into tangible HR outcomes. Stay tuned for episodes that shape the future of work.