The intelligence driving HR – creating a strategic business function
Gone are the days that HR is a back office function, working away in the background dealing with contracts and benefits. Today, HR is increasingly seen as a strategic business function because many companies now realize that people are central to business success. This places HR at the heart of planning in the form of human capital. As a result, the recruitment industry is seeing more empowered HR functions within major corporations that are able to play a larger role and operate strategically rather than reactively to help realize business aspirations.
Within the industry there is also an increased focus on strategy and the measurement of impact – where organizations are looking to make a business impact by developing their talent management capabilities. This is due to the fact that more often organizationsrecognize the skill sets required to achieve their commercial objectives. At Futurestep we work with many of these organizations to align their talent strategy with their business strategy.
But how do you go about building a strategic HR function? Below, we explore four steps in the process:
- Strip permanent capabilities back to a core of fundamentals
The first thing your HR department has to do is evaluate the current state of their operational effectiveness and establish how it will be able to help the business reach its objectives through human capital management. In our experience the key to efficiency and effective service delivery often lies in segmenting the activities fundamental to HR. Generally more and more companies are segmenting employee relations, operations and strategic activities such as workforce planning and recruitment. As a result of this segmented approach these same companies are building specific outsourcing strategies to compliment in-house capability.
- Focus on key outcomes, not inputs
There is a growing expectation that all HR investment in activity should have a direct bottom line contribution, which in turn requires HR leaders to operate with a high degree of business acumen. It’s therefore important that you align your HR department with the businesses overall objectives to allow you to focus on the key outcomes. Instead of being caught up in what needs to go into making the department work, you can focus on what the department can do to help the business reach its goals. For example, bringing on board and maintaining talent that share a common vision will help you move to a more strategic platform as you will actively be contributing to the bottom line and will be helping to shape the organization’s vision of the future.
- Allocate work on the basis of proven competence
A key part of being strategic is coming to grips with work allocation within the HR department and the larger extended business. One way of doing this is to ensure that HR develops a certain competence and capability that likely has not historically existed. As such, more and more HR functions are demonstrating strategic skills such as strategic agility and operating skills such as planning, analytics and process management. The one thing to keep in mind is that proven competence and future vision have to overlap at times.
- Create flexibility and scalability in resourcing
In the current economic climate flexibility and scalability in HR is key to becoming a valuable strategic asset. HR needs to be in a position of enablement when it comes to talent – providing the business with the right people at the right time. To do this HR has to establish communities of current and potential future employees by creating a place, be it digital or physical, where people can connect and interact with the business – giving HR an immediate pool of individuals to draw on when it’s time to recruit while also being able to gain insights and perspectives from this community. It is the intersection of recruiting, social networking and talent intelligence.
At the end of the day the key to turning HR from a back office function into a strategic partner is finding measurable evidence of the value HR programmes and talent management initiatives, often directly tied to execution of your business strategy. In essence, showing value at board level. Get in touch with us if you want more advice or need help to find and develop individuals that will have this kind of impact on your business.
VP & General Manager, North America, Consulting