Posted: March 23, 2010

HR is more than just the holiday party planner

Seven reasons why human resources should sit at the strategic table

By Sarah Thoemke

A speaker at a recent meeting for the Colorado Human Resource Association said , "The number one concern for most CEOs is boosting productivity and reducing costs."

The next slide in her power point presentation stated the following:

• 20 percent of CEOs expect HRM to be aligned with their expectations of the function and how they value human capital.

• 60 percent have some appreciation for how HRM drive business performance but need help with education and understanding.

• 20 percent expect transactional help only such as employee onboarding for new hires and background checks.

Basically, this means that only 20 percent of CEOs think human resource managers understand business strategy and should be considered a worthy strategic partner in their organizations.

The middle 60 percent of CEOs view HRM as a necessary function, if only justified by the vast number of laws and regulations imposed on businesses. These CEOs do not believe human resources can make a difference to the strategic mission of an organization and rarely ask for strategic input. In their opinion, the primary function of human resources is to ensure compliance with employment laws.

The last 20 percent are almost indifferent to the human resources function and for them HRM has little or no reason for being a strategic partner.

That's unfortunate, because forward-thinking CEOs have an understanding and respect for the human resources profession and the value it can add to business. These CEOs want human resource professionals to understand their particular industry and contribute suggestions for improving productivity and reducing costs.

Traditional HRM can obviously provide management with facts and figures regarding how best to improve productivity, but truly effective HR managers can do more. Because their focus is on the employee and human issues, they can provide an organization with critical ideas that other strategic partners can't. The CFO's focus is on numbers; the CIO is about technology, and so forth.

Here is why HRM can and should be a strategic partner:

1. HRM ensures that managers hire well. A candidate must be qualified to do the job but he or she also must be a good fit. Skills and knowledge can be taught but poor hiring decisions can be disastrous. The cost of a bad hire results in poor morale, harassment and conflict issues, questionable worker's compensation claims, excessive use of sick time, unnecessary costs to health insurance plans and low productivity. Never mind the time and attention management wastes on dealing with a bad hire.

2. HRM understands employment laws and ensure they stay apprised of recent legislation and court rulings. It is critical that employers use this expertise so that they are appropriately implementing policies and procedures that comply with those laws. Ignorance is not an accepted defense in a court of law.

3. HRM is a key resource in monitoring employee satisfaction. Poor morale results in poor productivity and high turnover. These two factors directly increase tangible and intangible costs. Poor employee morale is a consequence of poor and/or unfair management practices.

4. HRM's focus on people is critical to workforce development, employee retention, human capital benchmarking, communicating emerging trends in human resources management, fellow employer's best practices and management training and coaching as those functions relate to an employers most valuable asset, their employees.

5. It is a myth that any C-Suite level executive, such as the HRM professional, is incapable of contributing to the strategic mission of a new corporation just because they have never worked in that industry. Effective HRM professionals relish the opportunity to learn and understand a particular industry.

6. HRM should be executive management's most trusted resource. The C-Suite has ultimate responsibility over whether the company is successful and profitable, or not. The C-Suite team is not complete without HRM expertise.

7. HRM may be the one who tells you what you do not want to hear. Listen anyway. Your personal success as a leader and your company's bottom line can depend on paying attention to HRM advice and recommendations.

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