As attracting and retaining top talent becomes a competitive advantage in a global economy, organizations are redefining the role Human Resources has in business strategy.
Moving beyond the traditional and more administrative services of organizing payrolls, hiring and firing employees, HR is now a key piece in ensuring a company’s growth, by identifying challenges in the workplace and developing a workforce capable of bringing innovative solutions to the organization.
Human Resources Departments need to create and structure strategic policies and processes, while providing leaders with insights based on data to support their management decisions. As the department responsible for talent management, it is HR’s role to find new ways to engage and inspire employees in order to get the best results possible.
Collaborating with other departments
A study conducted by the Harvard Business Review followed 53 companies and their processes between 2011 and 2015. Results showed that the organizations that follow the best HR practices are on average, 51% more competitive than those who don’t.
When HR leaders and executives from other departments work closely together, Human Resources professionals can apply specific knowledge and experience to identify pain points that other team leaders may not see right away.
A strategic HR differs from the “traditional” Human Resources department because it optimizes talent management by relying on data analysis and proactively suggests improvements to the organization, workplace environment and employee development.
So, after this introduction the concept of strategic HR is clear. But what elements are essential in order to make HR a truly strategic piece within companies?
Strategic Vision and Culture
Organizational culture is the collection of values, behaviors, expectations and practices that inform the decisions and actions of every member of the organization. It is, in short, the traits that make a company that particular company. So it should come as no surprise that organizations that have a strong culture which is effectively communicated internally and externally tend to perform better than those who don’t have a clear organizational culture. Combined with a clear strategic vision, it has the power to inspire and guide employees. Thus, a strategic HR department will always keep the culture and vision of the company in mind when hiring and managing talent – after all, the workplace environment quality depends largely upon people, and employees deliver their best results when they feel they belong (which is informed by how well they align with the culture) and when they know what the company’s goals are (which is informed by the vision).
Data Driven
Being a data driven HR means putting data at the forefront of decision making. In other words, a strategic HR department must make sure that every strategy is based on insights gleaned by data analysis, and not just hunches or intuition.
In order to do so, it is important to establish efficient methods of data collection and analysis, requiring not only a change in how the department organizes itself, but also investments in technology to support this initiative.
Reactive vs. Proactive
The “traditional” HR is often reactive, dealing with issues in the workplace always after the fact. But by adopting a more strategic position, planning actions and goals ahead, collecting and analyzing data to support talent management decisions and adopting cutting-edge technology, Human Resources can act more proactively, identifying and addressing potential issues before they become bigger problems.
AI Technology
While artificial intelligence systems have been a reality for quite some time, it is only in the last decade or so that applications have truly made an impact on business management. This technology allows companies to process massive amounts of data in an instant, helping them to make more assertive decisions faster, reducing operational costs and bringing tangible improvements in results.
AI is already being used in companies worldwide, and HR departments can greatly benefit from automating more menial tasks, such as CV screening, which could free up the team’s time to do more meaningful and strategic work. Furthermore, artificial intelligence can be used in talent management, to gain insights that may be overlooked by managers due to lack of time or even unconscious biases.