In The Strategy Book Max McKeown says “Corporate strategy is usually only useful if you get people engaged with helping you to make it work.”
All organizations have strategies that involve all aspects of the business except the one that has responsibility for the people who are going to make it work, Human Resources. Human Resources knows more about the people in aggregate and individually than any other area of the organization. This knowledge and how it is used places HR in perfect position to be a strategic partner in the organization. In the past, HR has been sidelined by a persistent reputation as a risk averse, bureaucratic roadblock. But the changes in our economic environment, global competition, accelerating business cycles and talent shortages make this the time for HR, with the leadership of the Chief Human Resources Officer (CHRO), to get into the game with innovative solutions to these burgeoning problems.
Consider what is possible in the reimagined HR department. Imagine the potential of HR when the CHRO puts as much emphasis on the employer brand as the Chief Marketing Officer does with the product brand. Imagine that the CHRO uses data to understand talent in the same way that the organization uses data to understand customers. Imagine if HR employees became as committed to change management solutions as they are to complying with stated personnel policies. By implementing these structural and strategic changes, HR becomes an integral business function that is critical to organizational success.
While the last several decades have seen massive changes in how the C-suite sees and understands itself, the role of the head of human resources, currently referred to as the Chief Human Resources Officer (CHRO), has seen little in terms of meaningful transformation. The CHRO has the potential to play a substantive leadership role in the business organization if Human Resources departments become better understood for their strategic importance.
First, let’s take a look at how Human Resources departments have evolved. Most organizations added a payroll/personnel function as the number of employees increased and the time spent by managers on administrative functions became overwhelming. This administrative burden was passed to Human Resources and acquired new importance with the addition of labor relations and state and federal regulations. These additions also required the development of compliance expertise within the department.
1950-1990: The “Personnel” Years
• Hires and fires employees
• Creates and executes HR processes and policies
• Demonstrates functional and technical HR expertise
• Monitors performance evaluation process
• Develops competitive compensation and benefits offerings
• Ensures process control
• Executes change programs
1990-2000: The Change to “Human Resources”
• “Hiring” becomes “recruiting” and new functions are introduced
• Trains management and orients new employees
• Develops, communicates, and implements employee relations policies
• Human Resources leaders push for a more strategic role within their organizations
• Organizations are slow to adopt strategic vision for HR, relying on them for traditional tactical, operational, or transactional support
• HR leaders are poised to demonstrate strategic value by abandoning risk-averse policies in order to fully engage on organizational growth and vision
Thus far, efforts at developing a more strategic role have been weak and ineffectual. They consist primarily of title changes and changes to the names of functions (i.e. recruiting to Talent Acquisition, or taking a group of HR generalists and re-titling them as HR Business Partners). The work of the department has remained largely unchanged.
And because so much of HR history has been characterized by relentless focus on processes and a strong aversion to risk, it is not surprising that modern human resources in organizations suffer from a reputation of a bureaucratic mind-set rather than innovation and collaborative excellence.
For a more specific example, let’s take a look at hiring. When there is an opening, HR and the hiring manager team up to determine the competencies required and proceed to hire someone who matches the requirements. Then, a system of per-determined training is delivered to “on board” the new employee and they are turned loose in their department. This is the traditional and all too frequent current practice. Today’s human resources departments have a chance to change this with a strategic approach. Assuming that HR meets all the fundamental needs (customer service excellence, administering programs and benefits), then the following might represent a Human Resources department reimagined for maximum strategic impact.
Human Resources Reimagined
Head of HR
• Gains and builds trust with C-suite by providing metrics, data and counsel that has strategic value and drives the business
• Acquires access to a variety of organizational data repositories to improve metric production
• Prepares and assesses HR Team for readiness for new paradigm (strategic focus, collaboration, transparency, internal and external customer service)
• Ensures budgetary sufficiency to support changes
• Fosters atmosphere of accountability and collaboration amongst C-suite and direct reports
• Requires current metrics from each business area to serve as baseline measurement for implemented changes.
• Requests ongoing metrics at appropriate intervals
• Reinforces new culture of HR
• Collaborates with managers to build employer brand within organizationally appropriate professional communities.
• Works in collaboration with marketing to build employer brand consistent with organizational (product) brand
• Builds a viable community of talent to draw on for available positions
• Ensures a timely and practical hiring process with compliance issues embedded.
• Provides a welcoming and transparent atmosphere to all candidates.
• Ensures that all managers are trained in organizational culture, compliance regarding hiring, labor and employee relations, and individual development of employees.
• Provides coaching to all personnel regarding issues as they arise and empowers line managers to be effective employee coaches.
• Acts as mediator when required between managers and employees.
• Oversees mentorship program and acts as advocate for outside personal development opportunities for employees where appropriate
• Ensures new managers (promoted or new hires) are trained according to organizational culture, procedures and compliance
• Acts as platform for change within the organization.
• Generates and collects annual engagement assessment data
• Interprets annual engagement assessment results and identifies organizational areas for celebration and correction
• Collaborates with managers in identifying, interpreting and making adjustments within departments based on engagement assessment data
• Collaborates with managers to identify talent that may be ready to leave organization, intervening with employee as appropriate
The Administrative HR Team
• Administers benefits and compensation
• Outsources benefits until ACA is coherent and established
• Continues to look for and implement voluntary benefits that will add to the organization’s overall attractiveness to candidates and employees
• Develops flexible compensation plan that reflects both the needs of the organization and recognizes the need for premium pay for Hi-Potentials and particular expertise
• Keeps one benefits employee to serve as facilitator
• Oversees compliance
• Embeds compliance issues as required in all processes
• Outsources following successful compliance integration
• Consults with vendor as new laws and regulations come on-line
• Administers payroll either directly or through an outsourced vendor
This reimagined strategic role for the CHRO and HR within the organization makes sense because it brings together the drivers for success and profitability. No other department has the ability to connect people and data from beginning to end throughout the organization. No other department touches managers and employees at every important interval in the employment cycle.
These repetitive touches give HR the opportunity to reinforce the strategy, culture and mission of the organization for each employee. Making these strategic changes will be essential for organizations to remain viable, sharpening their competitive edge and becoming more attractive to talented individuals.