Strategic human resources. An oxymoron perhaps? What does "strategic HR" really mean?
If you talk to HR professionals about business strategy, you may hear things like "having a seat at the table," "being a trusted advisor" or "being included in key business initiatives." But HR pros can play more than just an advisory role — they should be business leaders. What other overhead department has such a significant opportunity to drive business results by creating a framework for a high performing workforce?
Follow my logic: Nothing is accomplished in business without active performance of the workforce. A highly skilled and focused workforce can have a significant impact on the success of the organization, but the work performed and skills exercises must be directly aligned to the business strategy and objectives, otherwise time and money are wasted. In order to ensure an aligned workforce, there needs to be an infrastructure that coordinates human behavior with the company mission.
HR has the opportunity to develop this infrastructure and create an aligned workforce. That's not just grabbing a seat at the table; it's impacting the bottom line. Here are five steps for HR leaders to make the move from an overhead department to a strategic leadership department.
Read your annual report carefully. Review every financial report you can get your hands on, both at the organizational and departmental level. Brainstorm with your HR team, particularly those embedded in operations, and look for cases of human behavior obstructing business success.
For example, let's say you review the financials for one of your struggling business units that is losing market share to a competitor. Your HR team comes together to discuss the business unit: Recruiting reports they have had to fill the same manager position three times in the past 18 months. Compensation says the director insists on paying below market. The employee satisfaction scores indicate unrest in the workforce and explain the low retention rate.
After identifying a problem, look for the opportunity. In our example case, the opportunity is to help the business unit leader improve market share.
Once you have identified an opportunity, outline the precise human behavior issues that you see as obstacles to achieving this goal. For instance, point to the low employee engagement levels in the department and the sources — bad leadership and below market rate payment.
Next, provide business leaders with actionable steps to take to address these obstacles, and explain how your proposal, if implemented, will make a significant positive contribution to revenue, income, market share or expense.
For example, explain how increasing employee satisfaction can subsequently increase productivity. To increase satisfaction, you need to re-evaluate your compensation strategy, and pay above market rate for top talent.
Make sure you clearly detail the commitment needed for your proposal to achieve the desired result.
After you receive commitment, implement carefully. Provide regular progress reports, and let those who made the commitment know when commitments are not honored.
In our sample case, you should work closely with the struggling director on compensation strategy. Discuss the current pay strategy and offer a new approach, based on employee feedback and performance.
It is critical to involve key stakeholders in your process. Without regular updates and check-ins, your proposal may fail.
After the project is completed, you have a powerful opportunity to demonstrate what "strategic HR" can be — a powerful resource to drive business results.
Let's say you implement the new compensation strategy. Continue following up on the impact of the new strategy, and present leadership with concrete results, such as increased productivity and rising market share. Analytics and data-driven reports focused on business results — revenue, income, market share or expenses — demonstrate your ability to impact the bottom line.
By shifting the focus of HR from a reactive to a proactive department, you will not only drive organizational success, but also transform the reputation of strategic HR.
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