HR Needs Strategy to Get a Seat at the Table
January 1, 2015
I have bad news and worse news for HR pros.
Let's start with the bad news: According to Deloitte's 2015 Global Human Capital Trends report, HR practitioners graded themselves a C- (1.65 on a five-point scale) in effectiveness, with no improvement from a similar score in 2014.
Here's the worse news: Operational leaders gave HR a D+ (1.32 on a five-point scale). Ouch.
The Deloitte report also highlights an emerging trend of CEOs who increasingly look outside HR for the Chief Human Resources Officer position.
What might increase our anxiety as HR practitioners is that our global world is changing at lightning speed, while HR is still struggling with the same issues we've struggled with for ages — a compliance and control focus, inflexibility due to risk management and programs that neither align with nor bring value to the organization.
We need a call to action and a place to start.
It's Time for HR to Get Strategic
For as many years as I've been in HR (which is a lot) the rallying cry has been, "We want to be strategic." For some, this means having a role in business strategy. For others, it means being asked for their input on business issues. But those are outcomes; they have to be earned.
HR can earn a strategic role, but it means thinking differently. There are two key paradigm shifts that HR must make in order to earn that trusted business partner role.
Think Strategically Like a CEO or CFO
In most organizations, HR is an overhead department. Departments that generate revenue subsidize the cost of HR. That works fine when the organization is not in a budget crunch, but when budget time comes all fingers point to the overhead departments.
A business cannot get away with providing products and services that do not add value to the customer for very long. Eventually, they lose the business. It's hard to fire an overhead department, but the business can influence cost reductions beyond what is reasonable if leaders don't see value in the work being done.
HR has to shift this paradigm and think like a business owner concerned with budgets and customer satisfaction. We need to carefully define our customers (employees and leaders), identify their needs, provide products and services that meet those needs—and then evaluate whether we have, in fact, met the needs.
Don't Shy Away from Self-Promotion
As a business, too, we need to market our products and services to our customers, and make sure that the customers understand our value proposition. There is a fundamental (and a bit scary) question to ask: "If you were buying from us [HR] on the open market, would we continue to get your business—and if not, why?"
Customer needs and customer wants are often different. Sometimes they need things that they don't want, and it is the role of HR to educate the customer on the risk or opportunity so they can make an informed buying decision.
HR policies and programs are all products and services that HR may provide to their customers. Organizations invest hundreds of thousands of dollars in these programs with both technology and time. If the customer does not clearly understand the reason, does not feel as if they can do what is necessary without frustration, or looks elsewhere for services HR should provide, we are not meeting customer needs.
And there is only one way to know if we are meeting customer needs: Ask!
We, in HR, tend to tell our customers what programs and processes we will provide, and what work they need to do to comply—those actions place HR as the decision maker about what time and money investments an organization should make. The investment of time and money, however, is a decision best made by the operational leaders of the organization; otherwise, there is no ownership.
Take the First Step
Take a courageous step and ask your HR customer about the services your HR team provides. Start small with one program that you know could generate more value than it is currently providing.
Perhaps start with performance management. Your question then becomes, "Would you invest in this performance management program if you had the choice?" Listen. Don't be defensive. This could be the start of something great!
Photo: Creative Commons