It’s no secret that effective HR leadership is essential for any medium or large-scale business. After all, you need a dedicated resource to manage team dynamics, ensure compliance with relevant legislation, and sort through a sea of resumes to create a shortlist for every vacancy.
But that’s not all. Companies have now started to understand that HR can — and should — be far more than hiring, firing, and paperwork.
And that limiting HR leaders to operational responsibilities ignores the huge contribution they can make in developing a successful people strategy.
The commercial opportunity of strategic people strategy
“Treat employees like they make a difference and they will.” — Jim Goodnight, CEO and co-founder of SAS Institute
There’s no greater driving force for a business than the people it employs. We’ve seen evidence, time and time again, that proves an engaged workforce leads to commercial success, and that talent is a true competitive advantage.
And so in the face of all this evidence, it seems ironic that HR teams — responsible for the acquisition, development, and retention of 85% of a company’s assets — are too often locked out of higher-level strategy sessions.
It’s hard to imagine any other circumstance where the person (or people) responsible for such valuable assets would encounter the same.
Fortunately, this oversight is starting to be addressed. Increasingly, companies are focusing on strategic human resource management to encourage greater involvement of HR leaders in long-term business goals and decisions.
Strategic HR leaders are able to relate specific talent initiatives and programs directly to long-term business goals. Not only does this strategic thinking help improve company performance, it also helps a committed CHRO to gain the enthusiastic support of the rest of the leadership team.
How radical is “strategic HR”?
Working as a strategic HR leader requires a completely different approach to the ‘traditional’ talent development model. Here are the key differences — and why they’re essential to extract maximum value from strategic HR.
Reactive vs proactive
Traditional HR approaches are inherently reactive. We’re presented with a need, situation, or problem and we have to respond as best we can. The strategic HR leader, however, is proactive in spotting opportunities and avoiding issues ahead of time.
What are the emerging talent trends in your sector? How do you engage with younger demographics, who are the future of the workplace? What are your organizational goals and objectives over 12 months, 3 years, and 5 years — and what tools do you have to help deliver them?
These are all crucial, proactive questions a strategic HR leader needs to ask of their teams.
Problem-solving vs opportunity-seeking
We hinted at this above, but strategic HRM is also characterized by its focus on new business opportunities — suggesting innovative, insightful ways the business can take advantage of them.
Where traditional HR might recruit to fill an urgent vacancy, strategic HR leaders are creating a recruitment plan for the next 5 years of growth.
Short- vs long-term thinking
Being mostly operational in nature, traditional HR prioritizes short-term thinking. Each individual situation is addressed in terms of immediate needs and objectives. A more strategic people strategy encourages thinking about the longer-term impact of each decision.
This, in turn, often means a more coherent, integrated approach. And yep, you guessed it, more value for the business, too.
Maintenance vs growth mindset
Ask some colleagues and employees, and they might say that HR’s role is to keep the business running smoothly. Strategic HR policies do this and way more — creating ways to achieve growth through talent management, rather than just hold steady.
Routine vs innovative
Traditional HR departments spend much of their time applying tried-and-tested initiatives and approaches. Strategic HR leaders, on the other hand, are always on the lookout for new developments in the field. They are ready to innovate with how to find, and how to motivate, the very best talent for their business.
And that’s part of what makes strategic HR such an exciting practice.
But here’s the thing: when you consider the above ways of working, then a strategic HR approach isn’t as radical as it seems — or it doesn’t need to be, at least.
All other areas of your organization are expected to think about the long-term impacts of their decisions, to focus on growth, and to be proactive. Having a strategic view on people management brings HR into line with other departments, and the benefits are huge.
When done right, strategic HR should deliver:
- Greater job satisfaction among staff
- Fewer roadblocks — with potential problems avoided or minimized, thanks to proactive management policies
- Improved customer satisfaction (because your employees are well-placed, motivated, and aligned with the company mission)
- Lower staff turnover, with associated savings.
5 essential skills of strategic HR leaders
Ready to adopt strategic HR? We thought you might be. Then here are the must-have skills and behaviors you’ll need to embody:
- Promote strategic HR to other business leaders
Leadership team buy-in is required for any strategic HR leader to succeed.
Being able to communicate the importance of HR programs in terms of the overall value to the business is key if we want others to embrace these changes, too.
- Gather deep knowledge and understanding of all areas of the business
To be effective at the strategic level, HR leaders need to ensure that they are knowledgeable about the challenges, opportunities, and idiosyncrasies of all areas of the business.
We know that consistent, integrated policies help create a positive, streamlined working environment. HR leaders are uniquely positioned to identify inefficient, fragmented policies and create overarching strategies to overcome these.
- Be passionate about best practice
HR leaders wanting to create a strong people strategy are constantly looking to innovate and improve. Current practice might be working well enough at the moment, but the best HR leaders are always ready to improve and innovate to meet upcoming challenges and realize opportunities.
What’s more, staying ahead of the competition with best practice in HR strategy gives companies the edge when it comes to recruitment, employee engagement, and reduced turnover as well.
- Focus on culture
Organizational culture may be intangible, but it can have an enormous impact on the performance of a business — as you well know.
Strategic HR leaders are constantly alert to the messages their actions are sending about the culture, values, and identity of their organizations. So keep this top of mind.
- Stay data-driven
Strategic HR decisions need to be evidence-based and data-driven. The best HR managers are eager to ensure that they have all the information they need to make informed decisions and excel in strategic talent development.
How to become a strategic HR leader
Having a strategic approach to HR doesn’t have to be all-or-nothing; becoming a more strategic leader can start with a few simple steps.
Take your place at the table
If you’ve made it this far through the article, then you’re already sold on the benefits strategic HR can bring to your company. But not everyone will share your enthusiasm… not yet, at least.
Don’t wait for an invitation — ask for a chair in existing discussions around business strategy. Start your own conversations, and encourage others to consider how their strategies might intersect with HR priorities, for the good of the company.
Make yourself available
Once you start involving yourself in strategic decisions, it’s time to focus on collaboration. Talk to other leaders about overarching business goals and be available to answer their questions from a strategic HR perspective.
Let others get used to running business-critical ideas by you, then offer thoughtful, considered responses.
Moving from a traditional HR model to a strategic one can involve a significant shift in mindset.
As situations and issues arise, you may find yourself tempted to fall back into old ways of working — fire fighting, thinking short-term, reacting to change. Remind yourself that your focus has to be on the bigger picture now and don’t lose focus.
Taking on a strategic HR role doesn’t mean leaving behind all of the trappings of traditional HR.
You will probably find yourself having to do all of the typical operational duties as well as your newer, strategic role — particularly during the transition phase. Where possible, try to delegate some of the existing workload, and consider the support you’ll need in the long-term too (go ahead and put your strategic HR vision to use on your own team right away!)
This can give you the breathing space you need to develop your new role and demonstrate the value of strategic HRM — which, as we’ve seen in this article, can be game-changing for any business.