Why You Need Strategic HR
How does human resources fit in an organization's structure?
Until now, high-level strategy meetings ended with an afterthought something like “…and oh yeah, we better tell HR …” HR was traditionally seen as a cost center, relegated to administrative and transactional back-room responsibilities like finding and training employees when needed and managing employee benefits and compliance. HR expert, Dr. Christopher Lee, uses his proudly crafted former departmental slogan: “We take care of those who take care of business,” as an example of our wrongheadedness about the role of HR. This kind of thinking created a dual perspective where employees saw HR as a provider of perks and protection. And leadership saw it as superfluous to “business.”
With both sides buying into this picture, HR’s potential has been undervalued, unappreciated and underutilized through history. Today, however, it’s nearly impossible to achieve your goals without the support of strategic HR initiatives. Holding on to outdated views of what HR should be and do can make your company less effective, less competitive and less profitable. This, at a time when every organization’s biggest challenge is top talent – including finding the people you need and keeping the people you have.
If you don’t already have an outstanding CHRO, I hope you’ll immediately seek one. Having a strategic HR leader on your team will ensure you have a competitive edge in both winning and retaining the best people. You can’t grow your business without them.
What does strategic HR look like in practice?
The focus of strategic HR is less about serving the best interests of employees and more about harnessing and channeling human potential to benefit the business as a whole. Strategic HR still performs all of the more transactional responsibilities related to hiring, developing and retaining employees. These tasks are inseparable from the human resources function. What is different is that strategic HR no longer works in a silo. When it sets performance expectations, establishes rewards programs or determines benefits, this kind of HR department works closely with other functional departments and outside advisors. Together, they make sure HR policies and programs are integrated with other business strategies.
For example, a strategic HR department may work with operations to initiate partnerships with consortia and networks. In this way, HR leverages the efforts of several companies in the same region or industry to train specialized workers. Or, it could be that production is losing workers to competitors. Rather than posting jobs in more places, a strategic HR operation would work with them to determine what new workplace trends or technologies might be put into place to increase retention.
The nature of work continues to evolve.
Younger generations demand more flexibility and work-life balance. HR needs to go way beyond the traditional to create a strategic framework that ensures the new procedures, programs and services it provides align strongly with the company’s purpose, vision, values, objectives – and financials.
CHROs can earn a respected seat at the table by developing workforce programs and plans that solve business issues. As part of the executive team, they will directly contribute to a company’s goals and profitability. A truly strategic HR serves as a supportive link between individual employees, teams, and departments—and is willingly and fully accountable for the quality of its decisions.
You’ll know you have the collaborative, valuable partner you need when you can say with confidence that your CHRO:
- Takes a strategic and future-oriented point of view
- Focuses on business results and your competitive advantage
- Uses marketing expertise and perspective in creating and maintaining your employee brand
- Emphasizes the candidate experience in the recruiting process
- Concentrates on jobs and talent with the biggest business impact
- Uses data rather than intuition for recruiting, learning, and predicting performance
- Invests both internally and externally in strategies to win and keep people
- Shows business acumen in the role of talent advisor
Increasingly, companies recognize that effective HR strategies are what attract and retain the best people, and they are pivotal in achieving sustainable strategic success. The present and future of work are pushing HR into a strategic role. If you’re flying on the wings of the past when it comes to your people, better fly higher.