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Why HR needs to be ‘more strategic’

It is an ongoing theme in the HR function how HR needs to be more strategic in many organizations. The idea is to align the people strategy with an organization’s overall corporate strategy and its vision, mission and values.

There’s no question the HR profession aspires to be taken more seriously by the C-suite and other senior business leaders. While many leaders now appreciate the importance of the people side of the business, many CEOs and other executives look upon HR as being a largely administrative and compliance-driven function or even a necessary evil and therefore just overhead.

Getting a ‘seat at the table’

While many HR practitioners constantly prattle on about being a strategic business partner and wanting a seat at the table alongside an organization’s most senior leaders, many CEOs don’t even want HR to be strategic and prefer they focus instead on transactional activities and “keeping the lights on.” Some prefer that HR focus on filling vacancies, paying employees, delivering training programs, developing policies and assisting with employee terminations.

While there’s no question those types of activities and programs are just table stakes for the HR function, the truth is HR needs to do more to truly add more value in an organization. Some commentators have suggested the question becomes, “Now that we have a seat at the table, what are we actually going to do with it?”

HR leaders cannot simply go on about how HR needs to be more strategic. Nor should they show disdain for important (albeit non-strategic) tasks in favour of higher profile initiatives.

The truth is not all HR practitioners can or should be functioning at a strategic level, and HR needs to get the more transactional or administrative tasks down pat before moving to the next level. Some of this can be accomplished through technology and/or outsourcing, but HR needs to be able to maintain a certain level of service delivery for the non-strategic aspects of their mandate.

Otherwise, other business leaders won’t buy into the change and may see the transformation as a takeaway. “What good is being strategic,” they may ask, “if you can’t find me the talent we need to fill our vacancies?”

What does strategic HR actually look like?

We hear a lot about HR strategies being aligned with overall organizational strategies, but what does that actually mean?

First of all, the HR function should have its own strategic plan with goals and objectives, and that plan must be congruent with the organization’s strategy. It is also necessary to engage in strategic planning for human capital considerations beyond the HR function itself.

If a company’s strategic direction focuses on moving into new markets, there is always going to be a people side to that strategy, as well as some issues to consider in tactical implementation. How are new markets going to be served? Who is going to do that work? Where will you find those people? What skills and competencies will they require? Are there any operational, legal, regulatory or logistical challenges involved?

When HR is truly operating at a strategic level, senior HR leaders become trusted advisors to the board of directors, the CEO and other members of the C-suite. They’re able to advise the senior leadership team in all aspects of the people side of the business with respect to the acquisition, deployment, development and retention of talent as well complex legal, regulatory, financial or reputational risks relating to the organization’s workforce.

At the most strategic level, the chief human resources officer (CHRO) or equivalent even has input into the development of overall organizational strategy and can act as a sounding board and advisor relating to the people side of the business. The truth is that just about every decision of a strategic nature will have at least some implications for the organization’s workforce.

I personally believe transactional and strategic HR activities are more of a continuum than a dichotomy. Some activities are more strategic than others, but even where the work involved isn’t pure strategic planning, HR leaders can have an impact on and should consider organizational strategies.

Some of the things strategic HR leaders can assist with include the following:

• Executive coaching and mentoring programs
• Succession planning and the identification of top talent
• Organizational structure and design
• Organizational effectiveness and change management
• Leadership development programs
• Selecting candidates for executive vacancies
• Workforce planning
• Risk management
• Employment law compliance

Brian Kreissl is a product development manager with Thomson Reuters in Toronto. He looks after HR, payroll, OH&S, records retention and Triform. He can be reached at brian.kreissl@thomsonreuters.com or (416) 609-5886. For more information, visit https://store.thomsonreuters.ca/en-ca/home.