It’s a good time to be in human resources.
Today’s research shows that HR leaders are increasingly invited to sit at the executive table, a reflection of the evolution of HR from a support to strategic role in the business world.
“Corporate leaders are being bombarded with positive messages by organization experts about the need for strategic action from HR departments,” says Dr. Robert Preziosi, Professor of Leadership and HR Management at Nova Southeastern University in Davie, Florida.
And a joint 2015 survey by the Society for Human Resource Management (SHRM) and fellow HR and Labor organizations titled “Human Resources Management Policies and Practices in the United States, shows that executives want HR teams to step up.
The report surveyed close to 700 executives in organizations with more than 200 employees and found that 70 percent of respondents said that “HR has a place on the board of directors,” compared to just 41 percent in 2004.
“Because we now live in an era where it takes more than a great paycheck and retirement plan to engage and retain top performing employees, it is natural that HR departments in companies of all sizes are becoming more strategic,” says Bruce Holoubek, President and Co-Owner of the organizational efficiency contracting firm, Contracted Leadership.
So, if you see signs that your department is stuck in the “support role” mindset, use these tips to better position your department as a strategic partner in your organization.
Be Proactive vs. Reactive
One of the easiest ways to spot an HR department that’s stuck in a support role is to take a second look at how staff spend the majority of their time.
“The critical distinction between whether an HR department is supporting the organization or serving as a strategic partner is whether the HR department’s policies, processes, practices, and programs are proactive or reactive,” says Holoubek.
So if your days are filled by fulfilling requests and meeting requirements of other departments, chances are your department is a supporting player rather than a strategic partner.
According to Holoubek, a truly strategic HR department must forecast what its needs will be one to five years into the future, and then design programs and processes to help the company reach its goals – activities that require a significant investment of HR staff and leadership time.
“In a more supportive role, an HR department is reactive and spends the clear majority of its time responding to what is currently going on in the company,” he explains.
When reactive requests can be met by time-saving programs such as automated HR reports, HR team members can focus on more strategic activities.
Invest in People Analytics
The ability to measure and establish a leading indicator of performance is key to elevating the HR role, according to Stephan Hagelauer, human resources expert and vice president of workplace consulting for employee engagement platform, Workplace Dynamics.
Hagelauer say that people analytics – like compensation, turnover, etc. – have emerged as an equally important metric for business performance. With these metrics, businesses are better able to plan and strategize budget, as well as view employee trends that may be affecting their business.
And he’s not alone in this belief. A Human Resources Today article identified “people analytics” as one of 2017’s top 10 human capital trends.
Hagelauer adds that people analytics are especially critical for “companies with high average salaries, whose competitiveness depends on high productivity.”
Monitor and Maintain Good Employee Engagement
Strategic HR departments use available metrics, such as employee engagement, to better position themselves as valuable partners to positively impact business objectives within their organizations.
Hagelauer says the key metric his business focuses on is “a sustained measure of employee engagement, and an ability to impact it is what differentiates transformational HR leaders from their transactional brethren.”
Hagelauer suggests that an HR department looking to position itself as a strategic partner needs to identify an engagement strategy along with measurable outcomes as check points. Next, you’ll need to “sell” that strategy internally, and he says the most difficult part of that job will be to hold managers accountable to the people dimension of the balanced scorecard.
But if you manage to do it, the rewards are great.
“If successful, the HR department will become a de facto power center within the organization and will be able to command budgets that are linked to performance, and not driven by a compliance need,” he says.
Related: 3 HR Metrics That Matter
Develop Learning, Incentive, and Strategic Management Approaches
Today’s strategic HR leaders know the importance of development opportunities to new employees – many of them millennials – and they’re acting on that knowledge.
“HR strategists focus on corporate values, employee growth and development, as well as systems and processes that align with the philosophy of reverse accountability(RA),” says Preziosi. He says that RA puts the responsibility for performance with each individual employee and his/hers actions taken.
“Coaching and mentoring play key roles in the overall talent management plan for the corporation,” says Preziosi, adding that they also help employees feel connected and valuable to the business.
Another hallmark of a strategic HR department is a long-sighted approach to an organization’s future, seen through the lens of changing employee needs and the evolving business and technology environment. Holoubek says strategic HR leaders should ask the following questions:
- How do we develop a company culture that will attract potential employees who will graduate college five years from now?
- How do we plan to offer professional development opportunities for jobs and industries that may not even exist yet?
- How can we streamline our processes and systems and make them artificial intelligence (AI)-friendly?
Shifting your focus towards creating an appealing company culture, development opportunities and harnessing AI to HR’s benefit will help create a more strategic HR mindset.
Related: Is Your Performance Management Culture Outdated?
Strategic HR is Critical for a High-Performing Business
As an HR leader, you might feel challenged to find opportunities to become more “strategic,” but Holoubek says it’s critical to the success not only of your department, but your organization.
“Being strategic takes creativity and courage, but it is definitely worth it. It is the future of HR, and eventually, it won’t be an option; it will be a requirement to be competitive at all.”
And Preziosi points out specific rewards to making the move.
“Those companies who move HR from a supportive role into a strategic role will reap the benefits; longer term tenure of employees, greater collaboration among departments, and a distinctive brand in the HR hiring arena. These are distinct differences from those whose partner roles seem to focus on filling slots and managing statistics instead of advancing with HR analytics.”
However as Hagelauer notes, the bottom-line isn’t the only guide a truly strategic HR department follows.
“The valuable HR partner in today’s business economy has figured out how to help impact top-line results,” he says. “They create high-performance cultures that are employee centric and drive high level of engagement that consistently delivers high performance.”
To help position your department as a more strategic partner within your organization, look for opportunities for your HR team to provide proactive rather than reactive services. Learn to harness and interpret your “people data”. Finally, keep one eye on employee engagement while looking forward with the other to consider how HR can grow the business in the future.