How HR Can Help Shape Organizational Strategy
- Human Resources
6 min. Read
Last Updated: 03/22/2019
Table of Contents
For many business owners, the role of human resources may not be the first thing to come to mind when considering organizational strategy. Yet that mindset is shifting. Here's a closer look at how HR is evolving into a key strategic player within an organization — the role it can play in promoting organizational strategies, actions within a successful model of implementation, and the tools to help make it happen.
Compliance, time and attendance, hiring, onboarding, and benefit management are long-time staples of traditional HR responsibilities. Increasingly, the strategic merits of these responsibilities are being recognized across the business. At the same time, HR technology solutions are helping HR managers support organizational leaders with the information needed for confident decision-making. This has resulted in a shift in how HR fits into the organization.
In an interview with Gene Marks, Tom Hammond, vice president of corporate strategy and product management for Paychex, says what he looks for in an HR director extends far beyond the administrative paper-pushing stereotype.
"I'm looking for a strategic leader capable of doing a complete analysis of my own organization, looking for where I have strengths and weaknesses," Hammond says.
HR leaders' perspectives mirror that of Hammond's. For the second year in a row, the Paychex Pulse of HR Survey reveals that 80 percent of HR leaders at small and mid-sized businesses feel their department has a voice when it comes to overall company strategy. These leaders cited "strategic partner" as their primary role in HR. In contrast, only 12 percent of respondents felt their role was primarily administrative, a decrease from 2017.
Matthew Keup, Paychex HR services area manager, explains more about HR’s increasingly strategic role. "When there is a lack of perceived value of an HR role or department it's due to a lack of in-depth understanding of all facets of the organization — how they work, what makes them successful, and how each role in a business impacts the other roles and success of the business endeavor," Keup says. "The power of offering management a choice of resolution to a problem affords them the luxury of some measure of control on the action plan and outcome."
The Drivers Model of strategy implementation
At the 2017 Society for Human Resource Management (SHRM) Annual Conference, presenter Michael Wilkinson, founder and managing director of Leadership Strategies, Inc., explained that organizational business strategies often fail because they're too complex, and they're not made clear or accessible to people at every level of the organization. To succeed, a strategic plan must be divided into different elements for execution. Every step should be showcased.
Wilkinson offered the Drivers Model of strategy implementation, which has five components that can be used to move an organization's status quo toward its strategic goals. It serves as a guide for HR leaders to helping shape organizational strategy and align those strategies with business goals. The five components are:
- Develop an accurate picture of today: Where are things today, and what is not working?
- Create a shared vision: Where are we headed? What needs to change? What will be the payoff for all these efforts? Define your future vision and clearly quantify why people should buy in.
- Understand your barriers and critical success factors: What is most likely to get in your way? What are the critical success factors that you must secure to make your vision a reality (e.g., available budget or executive support)?
- Define your drivers: What strategies and actions will be taken to move the goalpost forward, and who will carry the ball?
- Monitor your progress: Track your progress against your goals and determine whether adjustments need to be made to your plan.
HR's role to promote, provide, and model
Following a systematic plan such as the driver's model, HR can lay the foundation for successful strategy implementation. However, the role doesn't stop there. As Keup points out, it's also critical to secure support internally at all levels. This leads to agreement, buy-in on the process, common strategy language, and increased commitment to participate and follow-through. HR professionals can put their role into action by promoting, providing, and modeling.
Promoting. Whether it's a departmental strategy to address one specific issue or a company-wide initiative to move the goalpost forward, encouraging systematic strategic planning leads to better outcomes and organized workflows.
Providing. HR departments can provide support in the form of training opportunities or analytics and reporting to help leaders and their teams think through the strategy process.
Modeling. HR departments can also lead by example. Showcase the power of strategy by having a strategic plan for your HR organization and making it widely available throughout the organization as a model for other departments.
HR tools for organizational strategy
For strategy implementation, both within the HR department or company-wide, analytics and technology are tools that can deliver the solid foundation management needs to drive effective decision-making.
Reliable data is a critical input into major business planning activities. Organizations that don't do basic tracking of turnover by position, return on investment for adding headcount to current staff, or lost workdays, should start data collection in these areas as soon as possible, Keup says. From budget forecasting to year-end financial reporting, access to data is essential for a business to develop success strategies and remain competitive.
Human capital management is another area where data plays a key role. In his interview, Hammond points out that the way for business owners to drive their own results is through good people. After all, it's your staff who is ultimately responsible for implementing your business strategies and influencing the organization's future. Finding the right people, getting them hired and on board quickly, and ensuring they remain engaged by empowering them to do what is necessary to help your business is how you take your business to where you want it to go.
New technologies make it easier to collect data, present and analyze information, and execute more effectively based on findings. Companies of all sizes are leveraging technology to improved targeted areas of business. These technologies include:
- Integrated recruiting support. Effective automation can help increase workforce stability, productivity, and competitiveness. Today's integrated recruiting solutions can simplify the process of posting jobs, attracting candidates, screening applicants, managing the interview process, and successfully onboarding candidates.
- Benefits administration. New technology not only promises to reduce cumbersome paperwork, but can provide real-time data visibility, tracking, accountability, and cost controls.
- Time and payroll. Manually handling functions such as scheduling, payroll, and compliance with tax requirements is time-consuming and increases risk of errors. Technology simplifies labor cost planning and controls, reduces administrative costs, and increases communication and productivity.
- Self-service portals and mobility tools. There is a growing trend in the widespread use of employee mobility tools that take advantage of the increased prevalence of mobile devices to support workers separated by time zones and geography.
Expanding HR's capabilities
Sticking to manual processes could mean lost opportunities for your organization and its leaders. By outsourcing the technologies listed above, your HR peers are saving time and money, improving recordkeeping, and ultimately getting the information they need to become more strategic and efficient on the job. They are expanding their team and department's capabilities to be a greater service to the organization. Moreover, outsourcing is more than technology. You get access to best practices and advice from a community of HR specialists whose sole job is to help the HR departments of other organizations helping you sharpen your talents and focus on partnering with senior management to develop the best possible organizational strategies.
In today's competitive business landscape and tight labor market, organizations need a strategic planning process more than ever before. When bolstered with outsourced technology and the resulting expanded HR team, HR leaders are positioned to play a key role in establishing a clear framework for organizational strategic planning, providing the necessary resources for training staff on strategic models and a working example of a successful strategy in play.
Give your team more time to provide strategic value by expanding their capabilities.