By Lindsay Macintosh, CPHR
Human resources as an effective business partner within the organization is increasingly seen as a competitive advantage—as more organizations recognize it as a strategic role improving the interface between human capital and business operations. In short, the HR business partner drives organizational performance adding value.
Change Held Back From Above
Technology has empowered the role of human resources to move out of a world of administrative policy police into a world of strategic influence. Still, integrating human resources with business strategy and management has a way to go. Many leaders and managers still embrace the traditional role of HR involved in administrative transactions such as hiring, attendance, leave, performance management, pay and benefits, terminations, and safety programs.
Executives in organizations with traditional HR models are reluctant to adopt the strategic model of HR. Organizations with traditional HR models see the role of HR as administrators and ‘policy police’. Herein, HR policies support transactional functions; in fact, traditional HR deals almost only with transactions and enforcing rules.
Quick Wins and Key Stakeholders
Louise Cook, senior human resources consultant at Fifth Option, says the reason many executives fail to adopt the strategic model of HR is that, “perhaps they don’t know what they are missing, they have not experienced results of a well-executed HR strategy, or they don’t understand how it contributes to their bottom line.”
Her recommendation? “Find some quick wins, key influencers and early adopters at a senior level who are on board with a strategic HR approach and develop a strategy to become strategic!”
To develop HR’s role as a strategic business partner, organizations need to leverage managerial awareness and commitment. As an effective business partner, HR is involved with corporate strategies wherein strategic and operational plans are integrated with the overall business plan.
HR’s involvement at this level makes absolute sense as employees have become increasingly important to the success of the organization. They produce products and services, and operate in a competitive environment.
Stepping Towards Strategic HR
The first step in adopting the strategic model is to understand the organization’s current HR functions and practices. A clear vision of where HR needs to go that aligns with the overall business strategy must be developed in collaboration with key stakeholders. The next step is developing a plan. It is crucial to have an executive sponsor and always communicate about what is being done and, perhaps most importantly, why.
Effective HR business partners focus on people and organizational processes alike. Bear in mind that people processes overarch the full employment life cycle from hiring to termination, and involving everything from employee pay to development, and engagement. Organizational processes focus on how HR can contribute to the organization by developing learning processes where employees share experiences of what and what does not work, and focusing on organizational culture, cost of human capital, change management, and aligning HR with overall business operations.
Strategic Priorities Will Vary
Cook sees challenge for today’s HR business partners as a “very ‘it depends’ question—where the organization is in its life cycle and evolution.” She adds: “What is the culture? How can HR best impact it? How is HR viewed in the organization? Is HR a trusted partner, or still working on that? What are the critical success factors for the organization? How can HR partner on that?”
Even in the best organizations, HR can not deal with every strategy issue, and the challenge for the HR business partner becomes determining which strategic issues can effectively be addressed.
Focus on Aligning, Inspiring Talent
One challenge for today’s HR business partner is training and development and aligning talent to achieve organizational goals. Many organizations fail to understand how employee behaviour impacts the bottom line. They lack transparent communication with regular feedback from employees and often face prospects of employee dissatisfaction and high turnover.
Traditional HR lacks focus on overall strategy. It may develop policies, but have no role in the planning process. After all, there is so much to do: people always need to be hired and trained, HR systems need to be developed, retained, upgraded, and changed, processes need to be created and upgraded, and cultures need to be established and transformed. To gain competitive advantage in today’s business world, organizations must move towards the strategic HR model in which HR is involved in the overall planning process and aligned with overall strategy.
Policy and Process Over Policing
Integrating human resources with business strategy has been more easily attained in large organizations that have more resources available. Smaller organizations may have a solo HR practitioner handling low value transactional HR work with little capacity to develop a more strategic approach. The HR practitioner may handle work other than HR such as accounting and general office management.
According to Cook, the HR practitioner has the opportunity to influence senior team members, so a skilled HR practitioner, with sufficient will, can help steer the HR ship from transactional to strategic. An important role for HR is to ensure there is a clear policy framework, but HR does not need to take on the role of the “policy police.”
Transitioning from traditional HR to strategic HR does not happen overnight. It is a process of incremental change that involves getting key stakeholders on board and careful planning.
Lindsay Macintosh, CPHR has over 20 years experience in payroll and benefits in the retail, foodservice and logging industries.
(PeopleTalk Winter 2016)