The economic growth of developing countries is sometimes limited by the prevailing, traditional human resources (HR) mindset in those countries, as pointed out in an article in the Journal for East European Management Studies documenting issues in human resource management in Serbia. This is especially true for companies that do not have an international or global presence.

Companies in developing regions, as the article notes, can associate human resource management with administrative work. If you equate HR with administration, then you are taking care of the people in your organization only in a transactional manner—paying salaries, handling contracts, and so on. In that case, you can also expect exclusively transactional behavior and no creativity from those people.

A few decades ago, valuing employees and HR practices were two distinct and separate concepts in the Balkans. The infamous traditional HR mentality often resulted in no clear career paths or development plans among employees.

Why Did The Traditional HR Mindset Become The Norm?

Many countries have their own HR mentality story. Let’s take Serbia as an example.

From the end of WWII until the early 1990s, Serbia was part of Communist Yugoslavia. Virtually all companies were public or government-owned companies. Talking with older family members, I found out that to get hired, it mattered more whether you were a political party member than whether you had the right skills for the job.

I’ve been told by family members and others that back then, people were not able to change jobs as they are today. In this kind of environment, HR practices were simply not utilized. So, a huge knowledge gap has been created in the HR industry.

Recently, Serbia has become a labor outsourcing hub for service companies. While the supply of true HR experts is low, the demand has gone through the roof. From what I’ve seen, foreign companies are hiring many people in Serbia, and they need the support of the HR industry—they need HR professionals—to act as a stabilizing factor in organizations to maintain and continue the achieved growth.

Evidence That The Traditional HR Mindset Persists

In my experience, it is obvious that a traditional HR mindset persists in places such as Serbia—you do not see this occur in places like the U.S.

I witness it almost daily while communicating with business owners and leaders. You see businesses face growth, structure, recruiting, and retention issues. Many of these issues can be solved by prioritizing human resource management as part of the company’s strategy and then acting on that strategy.

I have even experienced this mentality in my own company. Out of all the positions and vacancies that have been filled by the company in the last seven-plus years, the most difficult position to recruit for was the HR Manager.

As an HR Manager, you are looking for someone who can be a bridge between the company’s leadership and its employees. They must be able to facilitate communication and simultaneously support the interests of everyone in the organization, ensuring all of the organization functions as one team. They should deeply understand people and their behavior while utilizing HR methods.

We only had partial success recruiting for this position externally, which is why we decided to take a different route and promote it internally. This allowed us to have an HR Manager who had grown with the company and learned about it in another role and who could continue to grow with the system and all of our colleagues. HR is more about managing people than it is an administrative function.

The Traditional HR Mindset Hinders Retention And Recruiting

Employees need to feel valued to immerse themselves in the organization. This is especially important if your company provides services where satisfied and engaged people are vital to your success.

At every stage of the hiring process, starting with someone hearing about your company for the first time, your human resource management can either optimize recruiting and make it successful—or not.

Further, if you do not care about onboarding new employees effectively, you are not giving your new colleagues the best shot at performing. They could miss out on technical tools, colleague support, and cultural support. This lack of proper training and support could quickly lead to a high turnover rate.

Developing an Organizational Structure That Promotes Growth

But, what does it mean to have an organizational structure that allows employees to grow, and how will this growth contribute to that of the company? The answer lies in the adoption of the following three pillars.

Visibility

Employees must understand the entire organization and how they fit in the system. This facilitates immersion. If employees have visibility, they can connect the dots faster, arrive at conclusions effectively, and become growth participants more powerfully.

Maybe you have an employee in the sales department who has the next big idea that will improve your company’s procurement. You will never find this out if that employee has no visibility.

Progress

Employees must be able to recognize opportunities for progress in their career development. Career progression is vital for both the employee and the employer. It leads to employee satisfaction which, in turn, aids in staff retention.

Trust

Employees should have trust in their leaders, in future company plans, and in current decisions. This will help them feel secure in their roles, which can increase productivity. Your employees should always feel comfortable asking questions, sharing ideas, and expressing their thoughts.

Getting rid of a traditional mindset toward employment and HR, and implementing an organizational structure that allows employees to grow, can lead to significant growth for your company. Your employees will have trust in you as a leader, will be able to progress in their careers, and will feel secure as their voices are being heard.