From Admin. to Strategic Partner: The Evolution of Human Resources
Human Resources (HR) has certainly changed over the past decade. Thanks to advancing technology and Professional Employer Organization (PEO) models, in many businesses, HR has been able to evolve from an administrative, back office function to a true strategic partner, responsible for achieving strategic objectives and developing and retaining top talent critical to the business’ bottom line. In a study conducted by the Harvard Business Review, organizations that have HR as a strategic partner experience a 15% increase in earnings per share compared to those that do not.
But there is still work to be done. In a survey conducted by McKinsey, 85% of executives said that their organization's HR function has the potential to be a strategic partner, but only 38% said that their HR function is currently performing at that level.
So how can a HR team evolve to become a strategic partner?
Know where the Organization is Going: Strategic Planning
HR plays a critical role in strategy setting. By understanding the organization's objectives, HR should develop talent management strategies that support the achievement of these goals. HR can identify skills gaps, develop succession plans, and provide insights into the talent market.
The Right People at the Right Time: Talent Management
Talent management is critical and HR should be responsible for attracting, retaining, and developing talent. HR needs to develop modern recruitment strategies that target specific skills, develop retention programs to keep top performers engaged, and provide training and development programs to help employees reach their full potential. HR should also provide best-in-class processes to attract and retain diverse talent.
Tie to Your Mission and Values: Drive Culture and Engagement
HR is responsible for defining and maintaining a culture that supports the business’ mission and values. HR should develop programs and initiatives that promote employee engagement, build trust, and foster a sense of belonging. By creating a positive and supportive culture, HR can help to attract and retain top talent, increase productivity, and improve overall organizational performance.
Stay Safe: Compliance and Risk Management
HR should play a critical role in ensuring compliance with employment laws and regulations. HR should be responsible for managing risk related to employment practices, such as discrimination, harassment, and wrongful termination. By managing compliance and risk effectively, HR can protect the organization from legal and financial liabilities.
Understand the Facts: People Analytics
HR should become a data-focused function. HR should collect and analyze data related to the employee lifecycle. HR can provide insights into engagement, workforce demographics, turnover rates, and employee satisfaction, among other metrics. They can create compensation benchmarking and headcount forecasting to ensure employees are being paid equitably, helping to retain key talent. By analyzing data, HR can identify trends and insights that can inform strategic decision-making.
Consider a Rebrand: Human Resources to People & Culture
In recent years, many organizations have shifted away from using the traditional term "Human Resources" to describe their people management function. Consider changing the name of the department from Human Resources/Human Capital to be more in line with its true responsibilities. Whether the name is People & Culture, People & Places, People Operations, Employee Success, etc. find a department title that reflects a more modern and strategic approach to people management, with an emphasis on creating a positive employee experience, developing talent, and aligning people practices with business goals.
There’s no greater investment for your business than building a strategic People & Culture team. We’ll say it once and we’ll say it again- Your People Matter!