As HR teams develop their own annual strategies, their ability to contribute to overall business strategies may be overlooked. Part of the reason can be attributed to the perception that HR may be viewed as a cost center. For example, inefficient processes and too much administrative work can require additional resources to support HR without generating the appropriate results. But given that HR teams are closely tied to a business’s most important asset – its workforce – HR is capable of helping to drive key business strategies.
Two Paychex HR professionals explain the importance of developing HR strategies that align with those of the business.
Taking part in planning processes
Some HR teams may be inundated with administrative tasks, and feel overwhelmed with merely “keeping up” with day-to-day responsibilities. And few track HR metrics as a way to understand past trends that can help plan for the future. Paychex HR generalist Lee Barnhill, MSOL, SHRM-SCP, notes, "Many HR people don’t know what the overall business strategy is for their company. I also find that the leadership or executive team often doesn't include HR in discussions about business strategies.”
Despite these circumstances, the overall trend in HR is shifting toward becoming a more strategic part of the business. In fact, the 2017 Paychex Pulse of HR Survey asked 309 HR leaders at small businesses to identify their primary role within their organization, and the top choice cited was a “strategic partner.”
It’s important for HR teams to have a clear understanding of the business’s strategies so that HR can help meet these expectations. Barnhill offers an example: “If the strategy is to cut costs, which can be a major business goal for many organizations, HR may use analytics to evaluate current employee benefit programs. After evaluating data around enrollment and adoption, it may make financial sense to eliminate offerings that are largely underutilized by employees.”
Partnering with other areas of the business
Paychex HR services area manager Matt Keup, PHR, recommends that HR leaders be proactive in developing a deep understanding of each area of the business, including specific department goals. “Sales will have unit or revenue goals; operations will have productivity and efficiency goals. Look to develop trust with those different areas by offering to help them calibrate goals for their departments and divisions. There are few better ways to effectively partner with others than to offer help.”
This is another opportunity where it’s important to leverage HR analytics. Calculate and track turnover ratios with each role in the company. Connect with managers to work on strategies for addressing high turnover rates. You may also consider evaluating metrics around 'time to replace' each position in a department. Try to capture the costs associated when positions sit vacant or new employees are trained up to be functional in their roles.
Businesses looking to elevate their HR contributions to strategic partnerships should map the team’s workload and determine which tasks are of the highest strategic importance.
From there, ask what HR tasks can and should be outsourced. For example, determining your benefits mix and offerings may be an internal strategic decision; managing the day-to-day oversight can be outsourced as a way to alleviate some of the burden on your team.