HR strategy is so much more than employee satisfaction and benefits. It is about business growth, increasing employee performance, and controlling costs. The bottom line is that it’s all about business results. When HR managers identify the real goals of the organization and how the organization will utilize its human capital to reach these goals, then, and only then, can the HR strategy be developed and fully aligned with the business strategy.
In recent years we have seen a trend toward integrating HR into the overall business strategy. However, there are several indications that HR management is not yet recognized as a critical contributor, much less a strategic partner, in most organization’s strategic planning processes.
You may be asking, “Well, how can we fix that?” While HR alignment may still be evolving, there are several steps an organization can take to leverage and align their HR management activities.
Fully integrate HR into the organization’s strategic planning process.
Not all organizations link the HR strategic planning process with their overall strategic planning process. In most cases this is because few executives view HR as a strategic partner. Executives need to recognize the value that HR can impart to discussions about business activities, priorities, and goals. In turn, HR leaders need to understand business goals and be able to contribute substantive, creative solutions to accomplish these goals. In doing so, HR will no longer be a segregated support function but will become an integral, contributing factor to business planning and success.
Focus on organizational activities that assist business decision-making.
It’s time to start concentrating efforts outside of the traditional realm of HR and on to broader organizational issues. HR has to bring value to the discussion. When HR demonstrates that it can have an impact on business direction, then it will gain credibility with executives and earn a seat at the table. To generate this type of impact, HR must develop strategies, based on actual business objectives, which inform strategic business decisions.
Measure HR management outcomes.
As HR becomes more involved in broader organizational activities, HR management measures should evaluate the impact those activities have on the organization as a whole. Current measures typically focus on HR outputs and processes in an effort to make improvements to HR-specific policies and procedures. Although this is important, it is critical to develop measures that also focus on organizational outcomes. Information from these measures will inform company-wide decisions and assist in finding solutions to company-wide concerns.
Advance the collaborative working environment between HR and management.
HR and management need each other more than ever. HR staffs are being downsized, HR decisions are being delegated to line managers, and top executives are being asked to show how its resources are aligned to support business goals and objectives. Long gone are the days where HR provided traditional HR support only. Today, HR leaders must have a greater knowledge of the overall organization and how they can contribute to the overall success of the organization. Accountability is becoming a shared responsibility and collaboration is critical.
From both an economic and strategic perspective, the management of human capital will be a significant issue organizations will have to deal with for the forseeable future. HR must play an influential role in determining how to develop and link human capital to the organization's strategy, how to measure its value, and ultimately how to recognize and reward performance. If top executives want to positively change the future outlook of their organizations, they must ensure HR has a seat at the strategic decision-making table. Human capital is a critical part of the strategic agenda and HR professionals are in the best position to assist executives and senior managers with this effort.
Do you capitalize on your human capital? Is your HR strategy integrated with your overall business strategy? Is your organization performing at its maximum?