Why HR should always be involved in business strategy
For far too long, company boards have been reluctant to give HR a seat at the business strategy table. It’s a topic that’s been debated time and time again, yet many organisations still lack HR influence at board level and are missing out on great opportunity.
Given that your people are your business, this decision seems counterintuitive at best. If your people aren’t engaged, your business is unlikely to be performing at its best. And if we were to look in more detail at some of the world’s most successful companies and those that are categorised as an ‘attractive place to work’, the one thing they have in common is: people who are engaged with the vision of the company.
That said, the lack of understanding around the importance of HR’s role within a company remains a common problem amongst small and larger organisations. We believe this stems, sometimes from a lack of understanding of (and respect for!) the data/insights that HR has access to, and sometimes a lack of commercial understanding from the HR team.
HR has been and is often still referred to as a support function within a business. There is little consideration for the benefits of a strategic contribution from HR. However, as business develops and new people challenges emerge, treating HR as a support function is no longer going to be enough for businesses that want to thrive in the modern era.
HR, by nature, has always been about the people in an organisation but it’s easy for it to be seen as a necessary function rather than a tool for problem prevention and business growth. Strategic HR management has been proven to address and solve business issues that may be impacting the performance of the business as a whole by putting people first whilst understanding an organisation’s commercial objectives.
With the understanding of the strategic advantage that a great human resource function can create within an organisation comes a unique set of challenges and opportunities.
One of these is understanding how to bring your HR function into those board meetings and get the most out of their understanding and expertise. For HR teams, the difficulty they face is proving the value of their input to the board and getting them to buy into the benefits of having HR in the room.
With this in mind, businesses need to be considering the strategic value that HR can bring to the table when decisions are made. Instead of being seen as a support function, HR should be seen as a key component to any successful business strategy.
What can HR add to the business strategy discussion?
Organisations stand to gain a lot from including HR in business strategy discussions. Leaving HR out of strategic planning can actually be incredibly detrimental to the long-term success of a business. Strong HR professionals are strategic thinkers who can grasp complex business problems and offer valuable, creative solutions for people problems in ways that other department leaders cannot. If the HR team is expected to bring data-driven solutions to the table then surely it’s best to have that valuable input from the outset rather than waiting until it can solve a problem?
Clarity of Communication
Good communication throughout an organisation is something we all know is vital for business growth. However, one of the most common complaints from employees, especially during big organisational changes, is a lack of communication.
A lack of communication can lead to employees feeling disconnected from the company as a whole and therefore the work they were hired to do. This can slow progress and give the company a bad employer reputation as well as cost it some of its best talent.
Getting HR involved in strategic planning sessions means important messages can be effectively communicated with the entire workforce. Communicating what’s happening at a strategic level with your employees helps to create an honest and open culture that can help to reduce turnover.
Good HR leaders have their fingers on the pulse of their organisation and know where turnover is most likely to occur and how to go about preventing it.
Alignment of Practices
One of the fundamental benefits of having HR involved in early strategic planning sessions is alignment of practices across the organisation. It’s important that each member of the team is aligned with the company’s vision and values as well as the more in depth plan and each individual’s involvement moving forward.
One of HR’s primary goals is to maintain alignment as a business progresses. By involving HR early on in the goal development process, they’ll be able to share concerns and voice ideas to improve outcomes rather than waiting until problems occur further down the line.
An Adaptive Organisational Infrastructure
Strategic planning often includes change in workplace systems and processes. Whilst this may only affect some departments or individuals, HR will be able to assess how those changes will affect the wider organisation and what impact those changes might have on the systems and processes already in place.
Having HR’s insight into how changes may impact organisational infrastructure provides the leadership team with the tools it needs to only make the changes that are necessary and avoiding disruption where unnecessary.
HR now has the data necessary to add to the decision-making mix, it would be foolish to miss out on that valuable information.
Resource Management
HR has a wealth of data and knowledge to bring to the table when it comes to resource management. From pinpointing skills gaps to assigning the right tasks to the right people, HR leaders are valuable assets when it comes to long- and short-term strategic planning.
With deeper insight into where a skills gap is affecting the organisation most, HR are able to provide valuable insight into how to fix that issue through talent management programs and succession planning. This insight at a strategic level avoids organisations spending time and money on strategies that will be ineffective for them. HR leaders are in the best position to help their CEO’s figure out the best way to prevent resource issues before they cost the organisation money it doesn’t have.
Growth
The data and insights HR holds are a key component to business growth. From hiring new employees to putting plans in place that ensure growing teams remain aligned. They are also the ones that deal with the harder elements of growth such as resignations of valued team members and conflict amongst employees.
HR’s role in developing organisational structures and implementing new training and development systems is invaluable. To make their work even more effective, having them at the table during strategic growth discussions is vital. This way they’re able to understand the organisations growth goals and align employees with those goals whilst maintaining a good company culture.
What can HR take from business strategy discussion?
Understanding
The overall goals of any organisation are also the goals of HR. The HR team contributes heavily to the likelihood of reaching those goals by ensuring the best people are in place to do the work. With that in mind, it is good business sense to have HR involved in early strategy discussions. By ensuring HR’s involvement early on you reduce the possibility of people problems further down the line which could slow progress and cost the business financially.
For the HR team this provides them with a clear picture of what the company aims to achieve and where their contribution is going to be required. With a deeper understanding of what needs to be achieved HR’s ability to aid the process is far greater.
Sharing Values
HR guides and nurtures the tone of its organisation. From the way people are onboarded to the way they are let go, it’s vital for HR to understand the values that drive decisions in their leadership team so that they can communicate these effectively with those involved in particular situations.
Better Hiring
When HR has a clearer understanding of what an organisation is trying to achieve both short and long term, it’s easier for them to find the right people for the roles they’re hiring for. From personal values to skills, it’s important to find people that are a good fit for your business rather than just those who seem right on paper.
Including HR leaders in strategic growth discussions will help them feel more confident in their hiring process and ability to find the right people for the job.
Engaged Employees
Culture is driven by action not words. If you want an open and transparent culture within your organisation, you need to be open and transparent with your team. By having HR at the table when making strategic decisions they’ll be able to bring concerns of employees to those conversations who in turn will feel heard and appreciated.
It’s sometimes difficult or not appropriate for employees to voice concerns directly to their CEO or leadership team so having someone from HR who can mediate those conversations can help employees to feel comfortable speaking out.
Commercial Understanding
HR leaders with a keen interest in and strong understanding of business strategy may want to further their career beyond the HR manager function. An invitation to Board-level meetings where they can demonstrate their skills and value to the business will enable talented individuals to move beyond their current role should they want to. The more HR can develop their understanding of what is commercially viable and valued by the business, the better decisions they can make to support the organisation and in turn develop their own skills as a true HR business partner as opposed to a HR manager.
The data and information that a good HR department holds is invaluable but their insight on it and how it affects the business as a whole is what’s most important.
A growing number of modern businesses have recognised this already and HR plays a vital and somewhat different role in many of these organisations. As an example, one of the world’s biggest social media agencies hired a Director of Happiness. Whilst the title might sound fun, it holds great importance in terms of employee engagement. Just by having this position available it shows the rest of the workforce that their experience in the workplace is important to the leadership team. Organisations like this have a deep understanding of how important engaged employees are to their success as a company.
No matter the current position of your business, employees who are engaged and driven to help you meet your goals are the employees that will get you where you want to go.
Putting people first, especially in times of difficulty, is about action, not words. It’s about showing your employees that you value their contribution and that you appreciate the work they do, especially when times are tough.
The same goes for stating that you value the voice of HR but then not including HR in business strategy discussions. Your actions speak louder than your words.
If you’re unsure about the value that HR can offer your organisation, speak to a member of our team. Our expertise lies in collaborating with you to develop a commercially viable, people-focused strategy that can directly impact your bottom line.
