“It doesn’t matter if you have the perfect product, production plan and marketing pitch; you still need the right people to lead and implement those plans.” Bill Gates
As the office gives way to remote work, and as the tools of knowledge workers increasingly migrate to the cloud, most business leaders can see clearly that much of their company’s value resides in the human factor.
Studying the performance benefits of employee well-being for the past decade, Gallup and other workplace consultants have thoroughly documented the links between employee engagement and solid business objectives, such as increased productivity, reduced turnover, enhanced quality of work and higher profits.
Maximizing Workforce Potential
Engagement is the key to maximizing workforce potential, and in most organizations, the resident experts on engagement and job satisfaction are the human resources professionals. In this article, we’ll take a closer look at how the human resources team has evolved from recruiter, paymaster and benefits administrator to an essential strategic partner of senior management with a critical role in the organization’s success.
Five Tactics for Strategic HR Practices
The strategic HR partner fulfills the traditional role of the HR department but with a dynamic new twist: the workforce expertise of the human resources team can make or break the successful execution of a strategic business plan. Below are five tactics used by HR leaders to make that strategic contribution.
- Embrace the Mission and Strategy
- Align HR Services with Business Objectives
- Drive Engagement and Productivity
- Leverage New HR Technology
- Manage Compliance and Risk
Let’s take a closer look at each one of these tactics and consider how HR departments can present their initiatives to senior management as contributions to the overall business strategy.
Embrace the Mission and Strategy
In order to develop a comprehensive system of HR services that will advance the business strategy, the first step is an understanding of the underlying mission.
A mission or value statement seeks to capture, in as few words as possible, the “Why” of the organization. As a strategic partner to senior management, HR professionals must use the company mission as a compass to keep their policies and procedures aimed at true north.
The leaders on the executive team will develop their short- and long-term strategies based on the differences between the present state of the business and the ideals represented by the mission. There are a few problems in business that do not have a human resources component. Here are some of the ways HR plays a role in support of business objectives as a strategic partner.
- If the product line is obsolete, a strategic HR partner can develop an initiative for enhanced talent development in engineering.
- If old, reliable revenue channels are faltering, a strategic HR partner can bring a new plan to strengthen recruiting in marketing and sales.
- If the company has a negative reputation for cronyism, a strategic HR partner can spearhead diversity, equity and inclusion efforts.
- If allegations of discrimination or bias threaten to bring legal repercussions, a strategic HR partner can use training and culture change to enforce lawful policies and practices.
- If engagement metrics are low, a strategic HR partner can show senior management the path to a committed, loyal and dynamic company team.
- If the company strategy includes a merger or acquisition, a strategic HR partner can help the leadership avoid the all-too-common reluctance of cultures to combine.
Whether a new tactical proposal involves HR functions such as recruiting, training, diversity, engagement, regulatory compliance or employee benefits, it must be designed to produce a result that supports and advances the business strategy.
Human resource departments must develop a new perspective in which the future is not coming at the HR team but is coming from the HR team. That new perspective is based on a commitment to the mission and a clear understanding of the business strategy.
Align HR Services with Business Objectives
Contemporary HR professionals have transcended the routine administrative responsibilities of a support function by aligning the delivery of HR practice and service with a broad range of strategic business objectives. Senior management does not manufacture goods or deliver services. Although they set the course, it’s middle managers in financial, technical and marketing disciplines who steer the ship, trim the sails and fire the cannons. HR managers are expected to understand how each of these disciplines supports the business strategy, and the task given to the HR function is to develop initiatives that help to drive the strategic objectives.
By collaborating closely with other departments, the HR department can help ensure that the organization’s current and future talent pool is shaped toward greater alignment with the strategic goals. This is reflected in talent acquisition, workforce development, compliance, retention and benefits strategies that are in sync with the company’s long-term plans.
Although each discipline in a large enterprise may be quite different, the process of collaboration involves the same steps. HR must evaluate the conditions, develop improvement plans, execute the plans, measure progress and communicate results.
- Evaluate the conditions. Are the people qualified? How do the employees feel about the company? How much hiring and training is needed? How much remediation of organizational support is needed?
- Create improvement plans. Work with department heads, team leaders and key employees to agree on problems and proposed solutions. Turn those solutions into action plans.
- Execute the action plans. Get sign-on from all stakeholders in a team or department. Share the action plan with both managers and employees. Meet to review progress and correct course as needed.
- Measure progress. From the beginning, create KPIs (key performance indicators) that are relevant to both leaders and the entire workforce. When employees know the goals and understand the purpose, they will achieve the desired metrics.
- Communicate results. Remember to praise in public and provide feedback in private. If the plan is not going well, ask for help from the stakeholders. When results are achieved, give all credit to the team members.
Drive Employee Engagement and Productivity
Employee engagement has become a critical factor in a company’s success. Engaged employees are more motivated and productive with a greater sense of ownership, all of which ultimately leads to higher profitability for the company.
The HR department has a pivotal role in fostering engagement through initiatives such as creating a positive workplace culture, offering professional development opportunities, surveying employee attitudes and promptly addressing employee concerns.
Engagement research has shown that in order to be competitive today, HR teams must leave behind the old model of “How do we get what we want from the workforce?” and embrace the new model of “How do we show every employee that we are committed to their career success and job satisfaction?” The Society for Human Resource Management (SHRM) published a study on the role of perceived organization support (POS) in building engagement, and this study echoes the idea that companies should show employees that they value their contributions and care about their well-being.
By focusing on employee well-being and job satisfaction, HR helps build a motivated and committed workforce that contributes positively to the company’s bottom line through enhanced productivity, workplace safety, product quality, customer satisfaction and all other aspects of organizational performance.
Leverage New HR Technology
Data analysis, machine learning and remote office communication technologies have revolutionized HR practices. Strategic HR administration uses data analytics to gain insights into workforce trends, employee performance and potential areas for improvement. This data-driven approach enables businesses to make informed decisions about talent management, resource allocation and succession planning.
Technology has also streamlined many traditional HR processes, allowing HR professionals to spend less time on administrative tasks and more time on strategic initiatives. HR software, AI-powered recruitment tools and automated performance management systems have become indispensable in strategy-focused HR departments.
Now that HR has AI assistance for functions like job posting, interviewing, career path planning and background screening, the HR team can elevate their focus to be on the comprehensive enhancement of the employee experience.
Manage Compliance and Risk
While HR’s strategic role has expanded, it still plays a crucial role in managing compliance and mitigating risks. Employment labor laws and regulations are complex and ever-changing, and non-compliance may lead to significant legal or financial challenges. HR executives must stay up-to-date with regulatory changes and ensure that their organizations are compliant in all areas, from labor laws to diversity and inclusion.
Furthermore, HR plays a vital role in crisis management and business continuity planning, helping successful organizations navigate challenges, such as the COVID-19 pandemic, by implementing remote work policies, safety measures and employee communication strategies.
The strategic role of HR in risk management is founded on the HR team’s knowledge of and interactions with individual workers. An employee may not ever speak to a company executive, but they are certain to have occasional contact with human resources. For this reason, HR professionals are the best-positioned leaders to anticipate problems by identifying and responding to employee behaviors or management actions that may be problematic.
HR is where employees learn about their workplace rights and where managers sometimes learn the limits of their workplace authority. HR is where employees should learn that they can feel safe in talking about a problem. HR is where a theft or workplace harassment would be reported. And, HR is where human-related issues would be solved in a complaint manner or elevated to upper management to mitigate risks for the organization.
From Administrator to Strategic Partner
The evolving role of HR from administrator to strategic partner is a significant development that no business owner or manager can afford to overlook. By recognizing HR as a valuable strategic contributor to an organization’s success, companies can unlock the full potential of their workforce, drive employee engagement and productivity, mitigate risk and make informed, data-driven decisions.
To survive and thrive in an increasingly competitive business environment, it is essential for business owners and managers to invest in their HR departments, provide them with the necessary resources and foster a culture that values the strategic role of HR in the organizational structure. In doing so, they can help their HR teams become true partners in achieving the company’s greater mission.
Need a partner for HR?
As you navigate the path toward maximizing your organization’s potential, a strong HR foundation is crucial. It’s not just about having a team; it’s about having the right team with a strategic HR partner that aligns with your business objectives. That’s where Higginbotham comes in.
Our team offers tailored HR outsourcing and consulting solutions to streamline processes, manage risks and expand your HR capacities. Talk to a member of our team today, and let’s work toward improving your organization’s employee engagement and organizational success.
