By Fiona Robson
For years, human resources was largely viewed as a support function, a department responsible for ensuring that organizations had enough employees in the right roles.
Its responsibilities were primarily administrative, ranging from payroll and employee training to maintaining basic workplace processes. HR was rarely considered a central player in senior decision-making and was often brought into discussions only after employee-related problems had already emerged.
That role has changed dramatically.
As businesses enter 2026, HR has moved closer to the heart of strategic decision-making. Rather than simply responding to workforce needs, HR leaders are increasingly involved in shaping business strategies, defining future objectives and ensuring that an organization’s human capital is aligned with its broader ambitions.
This shift matters because people remain at the center of business performance — and, in many cases, represent an organization’s most important source of sustainable competitive advantage.
Driving Business Growth
HR departments must now develop human-capital strategies that directly support business priorities and help organizations achieve their long-term objectives.
This means ensuring that companies have the right combination of skills, expertise and experience not only to meet today’s requirements but also to prepare for tomorrow’s challenges.
That task has become increasingly difficult as technological change accelerates, making it harder for businesses to predict which jobs and skills will be most valuable in the future.
At the same time, companies are becoming more geographically dispersed, operating across multiple markets with different legal and regulatory requirements.
HR therefore has an increasingly important role in ensuring compliance with local employment laws and regulations while aligning internal policies with the requirements of each market.
The challenge becomes even greater when employees move across borders, requiring organizations to manage the legal, regulatory and operational implications of international workforce mobility.
Building Organizational Resilience
The COVID-19 pandemic demonstrated just how critical HR can become during periods of uncertainty.
Companies were forced to rapidly change some — and in many cases almost all — of their operations. While employee safety and wellbeing had always been important, the scale and speed of disruption brought these issues to the forefront.
HR teams were required to revise policies at unprecedented speed while supporting senior leaders who had little or no previous experience dealing with such circumstances.
One of the clearest lessons from the pandemic was the importance of organizational agility.
Businesses should therefore take the opportunity to examine what they learned from the crisis and incorporate those lessons into their future workforce and operational strategies.
Talent, Leadership and Corporate Culture
Talent, leadership and organizational culture represent three critical areas in which HR can have a lasting strategic impact.
Identifying the right talent begins with recruitment and selection processes built around clearly defined expectations.
The expansion of online recruitment platforms may appear to give companies access to a larger pool of candidates. However, it can also result in organizations being overwhelmed by applications, making targeted and carefully designed recruitment strategies increasingly important.
There is also a risk of relying too heavily on familiar interview methods simply because they have always been used.
HR should therefore encourage experimentation with new approaches that can provide a more accurate assessment of candidates’ skills, potential and suitability for the organization.
Retaining high-performing employees is equally important.
Companies need credible opportunities for professional development and career growth, particularly for experienced employees who possess valuable institutional knowledge and may be attractive targets for competitors.
Creating Meaningful Career Paths
Clear career pathways can play a significant role in strengthening employee engagement and encouraging people to remain with an organization.
Employees should have opportunities to demonstrate their abilities and develop professionally, whether through participation in strategic projects, involvement in new initiatives or movement into roles that match their ambitions and capabilities.
Leadership is equally important.
Senior leaders shape business direction, guide teams and remain accountable for achieving organizational objectives. Their behavior should also reflect the values they expect employees to embrace.
Employees are often promoted into management because of their technical expertise and strong performance in their previous roles. But being an outstanding specialist does not automatically make someone an effective manager.
This is another area where HR can make a significant difference by helping newly appointed leaders develop skills in people management, communication, performance management and team building.
The goal is to help employees make the transition from being highly capable specialists to becoming effective and influential leaders.
Preparing for the AI Revolution
Artificial intelligence is creating significant opportunities for businesses by transforming existing processes and opening the door to entirely new ways of working.
HR should play a leading role in managing this transformation.
For employees, however, the introduction of AI can also create uncertainty, particularly concerns that technology could make certain jobs redundant.
HR teams must therefore identify opportunities to reskill and redeploy employees while assessing existing capabilities and designing appropriate training and development programs.
Organizations also need clear guidelines governing how and when AI can be used in the workplace.
For example, companies should establish rules around the use of AI in employee-generated reports and determine what types of confidential or sensitive information may be shared with AI tools such as ChatGPT.
At the same time, HR can use AI to automate repetitive administrative processes, freeing employees to focus on more strategic activities.
Recruitment provides one obvious example, with AI capable of supporting parts of the initial screening and selection process and potentially generating significant time savings.
HR departments should also review their existing policies to identify areas where explicit guidance on AI use is now required.
Closing the Skills Gap
Another essential responsibility for HR is identifying current skills shortages and anticipating those that may emerge in the future.
This requires organizations to monitor labor-market trends and conduct regular skills-gap assessments, comparing the capabilities they currently possess with those they will need in the years ahead.
In the past, companies could often address emerging skills shortages by hiring experienced professionals away from competitors.
But as demand for specialized talent increasingly outpaces supply, that strategy is becoming less sustainable.
Organizations will therefore need to place greater emphasis on developing talent internally while retaining the people they already have.
People Remain the Competitive Advantage
At its core, every business is a people business.
Without a capable, motivated and consistently performing workforce, even the strongest business strategy will struggle to deliver its full potential.
For HR to maximize its strategic impact, it needs the time, resources and organizational authority to look beyond immediate administrative demands and prepare the business for an increasingly complex external environment.
Artificial intelligence will undoubtedly create enormous opportunities for innovation and transformation. But technology alone cannot determine whether an organization succeeds.
The companies best positioned for the future will be those that combine technological progress with a clear understanding of their most valuable asset: their people.
Professor Fiona Robson
Head of the School of Business, Design and Social Sciences, Heriot-Watt University Dubai
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