HR’s Role in Business Strategy and Adding Value

I just finished reading an HR.com whitepaper titled “Driving Successful HR Leadership:  Talent Management’s Role in Core Business Strategy”.  Its a study that explored what’s working in company’s today and what gaps need to be filled.

In it, there are some interesting points that I want to focus on.  Right off the top is the first paragraph that states the three key components CEOs and executives hold as necessary for a successful business.

1. The right strategy
2. The right operations in place to execute that strategy
3. The best people to execute those operations

Obviously, from that list, we can see that HR is ultimately responsible for 33% of a company’s success. And number 2 can’t be accomplished without number 3 so you can legitimacy say that HR is responsible for 66% of a company’s success.

Talent Management is the key to ensuring that HR can execute that 33% 66%.  What is Talent Management?  Basically, it boils down to recruiting and retention activities, compensation, training & education, and performance management. In order for CEOs and executives to make better decisions, HR needs to be able to provide them metrics and analytics – aka numbers.  The whitepaper concludes that HR needs to shift from transactional to strategic in order to provide the CEO with the data they need to make decisions on the 33% of the business.

Highlights for me:

  • When recruiting, improved sourcing, screening and assessments, are the most important elements.  It is also recommended to anticipate vacancies through retirement or attrition in order to prepare before there is a need and mistakes can happen because of the urgency to fill the positions.
  • Retaining employees works best by having a competitive compensation strategy and a good training and education program.
  • Employee development is the number one tactic for retaining employees.
  • Training managers is the best way to improve the overall performance management process.
  • Executive teams are more likely to focus on performance management over talent scarcity or retention.
  • CEOs consider people management as a primary driver of results, but only 30% offer strong support for HR analytics.

The biggest challenge for most HR folks are the last two bullet points. Most Exec teams see HR as purely a transactional operation. How do we get the CEO and Exec team to focus on talent scarcity and retention and into supporting HR analytics?   How do we get them to see HR as a strategic partner?   It’s difficult because of the legacy in HR as a transactional part of the organization.  HR is, for most Executives, the policy police and the party planners.

I don’t have any answers to my questions today. But in future posts, I will explore how HR can become more involved in adding value to the strategic business planning process and getting away from the perception of being the policy police and party planners.

Please note: I reserve the right to delete comments that are offensive or off-topic.

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