How can HR begin to have a real impact on business? The answer is get strategic. Rob McLuhan gives a five-step guide to unlocking your potential
HR professionals need to reinvent themselves as strategic players in today’s businesses. That is the theme of much recent comment by academics, consultants and corporate leaders, who stress the impact that effective people management can have on an organisation’s competitiveness.
Yet the profession is being slow to take up the challenge. According to a recent survey by PricewaterhouseCoopers, fewer than one in five companies are satisfied with the impact HR is having on business strategy.
One of the biggest complaints is over recruitment and retention, with 40 per cent of firms polled saying current approaches are proving ineffective in the war for talent. And a mere 3 per cent of HR’s time is being devoted to management development, despite claims that this is a priority.
Demands to take on a strategic role have come as a shock to a profession that originated in the administration of personnel. HR is not used to having influence in organisations – it is represented on the board in only a third of companies polled.
Yet its traditional activities have been marginalised by the impact of IT systems. Much of the day-to-day work formerly overseen by managers is now automated, with employees being encouraged to take responsibility for inputting their own data. That has created a vacuum, as many professionals feel bereft of a role, says Linda Holbeche, director of strategic human resources programme at Roffey Park.
But she points out that it is also a major opportunity, freeing up the function to take a longer view of the issues confronting businesses.
- Recognise that people are a business’s greatest asset, as a reality not just rhetoric
- Develop an understanding of the business and its strategic goals
- Disengage from day-to-day administration tasks, by automating or outsourcing
- Find ways to make the HR function serve the needs of the organisation
- Develop the requisite personal skills and get into a position of influence.
Broaden your horizons
Stand back from the day-to-day issues and develop analytical thinking. "It is important to absorb the wider picture and understand the long-term implications of what you are doing," says Paul Kearns, senior partner at Personnel Works.
Don’t get bogged down in procedural matters, however worthy. Let someone else pore over the minutiae of that industrial tribunal case and think instead about what can be done to stop such a thing happening in future.
"You need to look at the underlying issues such as the behaviour of managers," says Holbeche. "You are gleaning information about the wounds in the organisation and turning that into remedial action."
Link HR to strategic business goals
Step outside your function and look at what the organisation as a whole is trying to achieve. How far do HR activities further these aims? If they are merely geared to meeting legislative needs, filling job vacancies and keeping employment records, it is time to be more proactive.
Make sure you understand how changes in your competitive environment are likely to impact on your business. Work together with business managers using business tools such as scenario planning and forecasting exercises.
"Look at what other organisations are doing and point out what it will cost yours if it fails to respond to competitive pressures," recommends Karen Giles, adviser at the CIPD.
Benchmark materials can be a powerful tool to influence the executive team to do something that will make a difference, she adds, and HR should exploit these fully.
Specific activities might be to:
- Provide training to boost the quality of customer service, stimulating loyalty and increasing sales,
- Encourage a culture of knowledge sharing across the organisation, so that skills and expertise are fully exploited,
- Overhaul recruitment and retention procedures, to ensure the company is attracting and keeping individuals with the right kinds of skills,
- Relax work processes where possible to create a climate tolerant of experimentation and innovation.
Get into a position of influence
Ambition and assertiveness are essential characteristics in a leader. Management expert Michael Porter struck a chord at the CIPD’s Harrogate conference last month when he urged delegates to elbow their way into the executive team.
"Show confidence and be bullish about building alliances with business colleagues," says Giles.
Should you try to get on the board? Emphatically yes, says Kearns, who maintains that a seat with the decision makers is essential if HR is to influence strategy.
But that may be a long-term goal and in the meantime you will need to find other ways to get your ideas across.
The function needs also to have strong links with other parts of the organisation. Line managers and employees are usually involved in HR initiatives and will need to be convinced of their benefits.
When dealing with individuals outside HR remember to:
- Demonstrate the value of HR by communicating the results of performance reviews,
- Talk the language of business, and don’t confuse people by using HR jargon.
"We all need sometimes to look at our toolbag of skills and identify any gaps," says Noeleen Doherty, senior research fellow in strategic HR management at Cranfield School of Management.
"HR professionals have the skills to do that for themselves, but they can also go to organisations such as the CIPD for
the informational databases that will guide them."
Know your subject
Key management thinkers such as Gary Hamel and Michael Porter are required reading, and there will be many others whose concepts are actively being pursued at board level that you need to know and understand.
Expand your qualifications
Increasing numbers of HR professionals are opting for the MBA as a route to business competence. Distance learning can be combined with work, and employers will often carry much of the cost.
Acquire strategic skills
Taking an operational role outside HR for a while is an ideal way to gain business experience. It will help you to understand the concerns of colleagues and to see how people issues impact on organisational strategy.
Consider studying new self-development techniques
Edward de Bono’s lateral thinking is said by advocates to be effective at helping to think "out of the box". And similar claims are made for neuro-linguistic programming as a way to influence others.