A guest blog from Rachel Mudd of XCD, the cloud HR & Payroll platform
The conversations we’re having with HR leaders are no longer about how we can give them the tools to influence at board level.
Today, they’re coming to us with questions about how we can help them unlock data and efficiencies to fulfil the top-level strategic role that their CEOs are demanding they deliver.
The days of HR as a back-office operation are finished, driven by a desire for business digitisation and the increasing scarcity of opportunities to achieve genuine competitive advantage.
In this environment, HR must integrate itself across its organisation and ensure all activity is aligned directly with bottom-line business objectives. This is the vision of HR as a strategic partner, unchained from day-to-day admin and free to consult across the business, unpicking innovative HCM strategies from the emotions, hopes and beliefs of its people.
This is what organisational leaders envisage when they talk about HCM as a critical value-driving operation. In 2016, a KPMG survey found that over 80% of business executives felt that effective HR was critical to success, and 59% believed it would grow in importance.
The kicker, only 17% felt that HR did a good job in demonstrating its value to the business.
Is it that the remaining 83% of HR spends too much of its time on transactional processes; not enough time on strategy? Is HR too focussed on HR? Or is it simply just bad at communicating what it does?
What can we learn from that 17%? What does the strategic business partner mindset look like in practice?
Wider contextual knowledge
The published reading lists of renowned scientific innovators like Albert Einstein or Carl Sagan show something interesting. The books that inspired them most were not related to their field of expertise, but instead enriched the context in which they worked.
In a similar way, the strategic HR professional should be an authority on more than just their role in the organisation. They should understand the fundamentals, the challenges and objectives of finance, sales, marketing and production. They should read up on sector innovation, competitor activity and market analysis.
Inspiration strikes when old knowledge meets new insight. And by building organisational and sector context around what they do, the strategic HR professional increases their ability to identify innovation opportunities and make sound business recommendations.
Bottom-line objectives and measurement
Strategic HR professionals have their KPIs tied to the business. Every initiative, every action performed by HR should have a justification linked directly to business objectives.
A performance report stating that CPD completion increased by 19% in Q2 is good news, but forgettable. A report linking that increase with a boost in productivity or a fall in waste will land on the boardroom table with a far more satisfying thud.
Dave Ulrich advises HR to ask business leaders which business priorities matter most to them, then make HR innovations and practices relevant to these challenges. “HR is not about HR but the business,” he says.
The strategic 17% make confident fact-based people strategy decisions by harnessing the data they hold.
What are the traits of our most productive employees? Which employees are most likely to leave? How does our retention in key roles compare to our competitors? What talent gaps are we likely to face in the next 12 months? Where are our next leadership candidates coming from?
The answers to these questions have strategic business value, and HR, with its troves of data, is the best placed to provide them. In the age of business digitisation, there are many examples of organisations using people analytics to achieve profound results.
For HR to find the time for all this, its traditional administrative tasks must be delivered in the most efficient way possible. The international strategic advisory firm McKinsey went further in an article last year, suggesting that businesses create a new role, ‘Talent Value Leader’, with a purely strategic remit, entirely removed from operational issues.
Rewriting organisational structure like this may not be possible in the short term, but there will be few among KPMG’s 17% that don’t use self-service systems to save time and empower employees to manage their own personal data.
There’ll be fewer still who run systems that rely on manual data entry and transfer, waiting days or weeks for their data to get up to date.
Harnessing the efficiency and accuracy of HCM software and the deep insight of analytics in the digital age requires HR to develop new skills and data practices, choosing solutions that fit their organisation and its people, then make a compelling case for investment.
Strategic HR professionals are highly valued by business leaders because what they do is clearly articulated and communicated. Their strategy is written and shared so all business leaders can refer to it at any stage. Their progress is well documented, and their successes are communicated at all levels of the business. They PR themselves like pros.
Strategic business partners don’t wait to be asked. Start drawing up your plans for greater strategic impact today.
XCD is the only combined HR & Payroll platform available on the Salesforce platform. Find out more about how you can harness their value-boosting HCM software.