By Melissa Campeau
Deadlines, meetings and jam-packed calendars make it difficult to think much beyond the here and now. But feverishly checking items off a never-ending to-do list is a bit like being a hamster on a wheel when it comes to making actual progress.
Stepping back from the hustle to assess, collaborate and develop strategy can mean all that effort helps generate movement towards a target. And that can help get an organization where it wants to go, instead of just spinning its wheels.
Businesses rely on strategies to define how to get from a current position to a targeted one. Those strategies provide guidance and context for supporting tactics. When HR is operating strategically, talent and departmental practices align and help to produce real, progressive results, moving the organization closer to its destination.
Consider the area of compensation, for example.
“A strategic HR model would look at how you design a system that rewards performance, leadership and culture, in line with the business strategy,” said Nan Oldroyd, an HR executive. This can go a long way to supporting strategic goals.
That doesn’t demote transactional HR duties to a lower priority, however.
“I would not say that transactional HR is less important than strategic HR practices,” said Charles Marful, director, Canada’s Talent Team, Ernst & Young. “You may have a great strategic HR plan, but how well will that work if your people aren’t paid?”
Transactional HR is essential, but it can easily monopolize an HR professional’s time. A 2011 PwC report showed that more than 75 per cent of HR work hours are spent on such tasks as pension administration, benefits and revising workplace policies. Carving time out to consider and develop strategy doesn’t happen without effort, but to meet its potential, an organization needs an HR leader’s insights on talent, culture and more.
Training a lens
HR’s areas of responsibility have ballooned over the years, so zeroing in on where to focus can be tough. The overall business strategy is your fundamental starting point.
As the director of HR strategy and compensation with Xerox Canada, Nadia Cerisano is responsible for organization design and strategic workforce planning.
“Without a business strategy, I can’t address either of those areas,” said Cerisano.
So Cerisano collaborates with the other executives in her organization to understand each area’s direction, goals and needs.
“I work with the VPs in defining their strategy to a level of clarity where I can understand the workforce implications, and then I consider what this materially means to our talent practices,” she said. “As an HR leadership team, we then use these learnings to determine how HR needs to evolve as a team so we can continue to innovate and enable our business to thrive.”
The nature of HR means its reach, impact and responsibilities are organization wide.
“HR is part of the business and it can enable the business to grow,” said Marful. “It’s just like how you think about growing your business through a marketing function. When you look at HR that way, it can take on a totally different role.”
Business and HR strategy must be integrated to be effective.
“In the same way that business would collaborate with the financial team and sit down with HR and ask what are the new goals, growth plans such as capital and acquisitions, efficiencies or synergies, we in HR should also look at those financial targets as part of our strategy,” said Oldroyd. “You consider the goals of the organization and what the people component should be, then you have to take a look at the current state versus the future state and identify the steps to get there.”
An HR leader also needs to consider the HR department or team itself.
“As we’re working with the business groups to help build their strategy, we need to build our strategy, too,” said Oldroyd. “Not just in how we’re addressing how HR will respond to meeting the businesses needs, but we need to look at our own department to ensure that our direction supports the business strategy and that we continue to optimize our talent and our people practices. We need to participate but then we need to ensure that we’re growing ourselves as well.”
Knowing your business, and more
The work of developing strategy for HR in collaboration with the rest of the executive team requires deep business acumen and credibility, earned though experience and a track record of success.
“If you don’t have that, the organization isn’t going to invite you to the executive table in the first place, and they’re not going to invest in a time-consuming and cerebral project like developing strategy,” said Cerisano. There’s no substitute for business acumen and a deep understanding of how your organization makes money. “I get involved in the strategy development process to provide input into future business direction, to help the business in defining workforce implications of their business to strategy.” An HR professional who can provide that kind of meaningful insight is an invaluable resource to an organization.
Strategy influencers
While the needs and priorities of each organization will differ, certain hot-button issues are likely to impact strategy, as it relates to the HR function.
“As part of strategy development, you need to know what the trends are and what’s emerging, externally,” said Olydroyd. “What’s disruptive to your business and your workforce? What’s enabling? What can make things easier and more efficient for your people to run the overall business strategy?” Understanding these trends and concerns, filtered through an HR lens, means a human resources professional can contribute proactively and strategically.
Culture keeper
One area that should figure prominently in strategic planning is organizational culture. As the “keeper of culture,” HR is the first to know if something is out of synch. When there’s misalignment between a business strategy and an organization’s culture, it’s a recipe for trouble. If an organization’s strategy emphasizes innovation, for example, but the culture doesn’t encourage risk-taking or positive dissent, that’s a potentially major roadblock to success. This is where HR can offer insight and collaborate to get culture and strategy in line.
Shape-shifting workforce
HR is also likely to be more keenly aware of the shift towards a more transient workforce, and how that can impact engagement, culture and other key aspects of business.
A growing number of organizations now count an increasing number of contractors, freelancers and remote workers into their personnel mix. In a Deloitte’s Human Capital Trends 2015 report, 47 per cent of Canadian organizations reported having plans to increase their use of contingent, outsourced, contract or part-time workers in the next three to five years.
HR will need to find ways to recruit and retain this complex collection of workers and ensure this is a factor when developing strategy. While the group presents some challenges to traditional HR practices, contract and freelance workers also offer significant potential advantages. They’re typically highly skilled and agile. Teams can be quickly assembled and disassembled. They can help organizations increase the scalability of projects, and a globally available workforce can extend an organization’s geographic reach.
Talent competition
While many of the organization’s business areas will study what competitors in the marketplace might be doing, “We should consider our competition not just in the marketplace, but also in terms of competition for talent,” said Oldroyd. “Who are considered the best employers out there? And what are their value propositions compared to ours?” Competition for the best employees is often fierce. Understanding how others might be attracting that talent can provide critical knowledge to help steer future direction.
SUBHEAD: Metrics and analysis
Strategy relies, as a base, on a thorough understanding of starting points and targets. That’s where measurement becomes crucial. A 2015 report by Accenture, Talent management meets the science of human behaviour, points out that nearly everything related to people in the workforce can be measured and analyzed. According to the report, “As new insights into brain science and human behaviour emerge – and as analytics finally enable organizations to test hypotheses and form conclusions by analyzing a newly available treasure trove of data – HR will arm itself with the tools and insights of a scientist to drive better performance from their workforces.”
Practically speaking, metrics help an organization understand if it’s staying on course with a strategic direction, or needs to readjust.
“In our organization, we have what we call a strategy scorecard,” said Cerisano. “The scorecard outlines the strategic priorities, the operational activities that we’re going to undertake to meet those priorities, who’s accountable for them, and the three-year plan to get us there.” The scorecard helps Cerisano and her team define how much change is going to happen, and by when. “From a workforce implication standpoint, that’s critical information that an HR professional needs in order to determine how quickly we need to evolve our talent practices.”
Metrics can also glean insights about employees that can help steer an organization.
“It’s not only about defining the HR strategy to support the business, it’s also looking at the people you have and how you can influence your strategy with that knowledge,” said Marful. For example, he suggests that if your database tells you a number of employees have a technical skillset that’s not being tapped, there might be a way to leverage those latent abilities. Or you might discover that the majority of people who leave the organization join a certain type of company offering a particular service. “There might be an opportunity to use your workforce’s talents to develop a service offering you don’t currently have,” said Marful.
Transformative HR
“I think big data is changing the world for us,” said Oldroyd. “Things like analytics really allow us to be able to inform the business overall and the business strategy more proactively than we would have been able to in the past.” This includes detailed information about employees’ needs, preferences, areas of strength, performance and more.
“For example, if you’ve really done a good job of segmentation in understanding your employee insights and analytics, you can share that data with the business so everyone has a better understanding of where they need to build capability in the workforce if, for example, our business strategy is focused on a particular area of revenue growth,” said Oldroyd.
That’s a seismic shift from the earliest days of HR, when the department’s role was purely transactional. Over time, it evolved to focus on personnel management, and most recently came to embrace the idea of HR as a strategic business partner.
As business begins to understand the impact of strategic HR expertise, the profession is poised to take on a role with even greater influence.
“If we share the best insight and expertise we can bring to an organization, HR has an opportunity to be not just strategic, but genuinely transformative,” said Oldroyd.