Article: What it means to have a strategic HRM function

Strategic HR

What it means to have a strategic HRM function

Here’s a deep dive into exploring the dynamics of an organization and developing a strategic HRM function in the company.
What it means to have a strategic HRM function

People are an organization’s most valuable resource, and a source of competitive advantage. Naturally, the human resources function is fast becoming an integral part of the strategic decision making core team. HR is moving away from its transactional roles of administration, payroll etc., and taking an active part in the overall direction-defining and business goal attainment.  This involves a significant change in roles and responsibilities, skills, and expectations. Here’s how. 

Understanding strategic HRM

Business leaders often talk about how HR must prove themselves worthy to “earn a seat at the table”. CHROs need to decipher what this exactly entails, and build the necessary outlook, skills, and mindset to deliver business results through well-aligned talent management strategies. Much of this boils down to how HR understands the business elements such as the organizational direction, short-term and long-term goals, economic predictions and so on. Today’s CHRO-ask is to align the workforce management in a way that supports these business metrics- not just immediate goals, but also to predict the talent challenges for future business scenarios. Only with this deep understanding and business insight, can HR create a supporting talent strategy that attracts, engages and retains the right talent for business success.  

Key skills to become strategic

Truly securing a seat at the table begins with HR transforming itself from within. The CHRO must take lead to define, build, and nurture a truly strategic HR team. For this, the CHRO must take on the role of a business leader and not merely an HR leader. The HR function must not be a mere “support or enabling function”, but must learn the following skills to become a key decision maker. 

Business expertise: Often, HR professionals may shy away from numbers, owing to a comfort level with “softer” aspects. Unless HR leaders talk the business language, they will be considered to not be able to take the “hard decisions”. To outline the people-strategy required for business growth, HR must work closely with the CXO suite, discussing business models, budgets, top-lines and bottom-lines, products, competition, etc. Only as a business leader, can HR help the business win. 

Change management: HR must act as a powerful driver of change, and this involves changing from within. The CHRO must be adept at assessing the current state and predicting future outcomes, both on the business and people side. Change can be unnerving and the CHRO must have the willingness and expertise to drive change. Only when an organization adapts to changing times, does it stay afloat and swim towards the shore. Change management demands its own competencies such as culture-management, inclusion, innovation etc. 

Solution orientation: HR is sometimes known as the “protector of policy”, and HR folks often may be taken a tad overboard with words such as “We have to follow the policy, come what may.'' A lack of understanding of diverse situations, and a lack of agility and flexibility is what perhaps hinders the best strategic people-solutions from coming to light. 

How to make HR more strategic? 

Ingraining the above skills takes time, and requires consistent effort and investment on the part of the CHRO. Here is a guideline on how HR leaders can work towards earning a seat at the table. 

Assess the current state: First and foremost required is a true-blue assessment of the HR function. Ask the tough questions and define the strategic competence of HR in the organization i.e. whether it is a compliance-driven HR explorer, process-centred HR influencer, strategic HR leader or HR visionary. Unravelling the actual state will give a true picture of whether HR is capable to partner with business, or needs to build prowess within. 

Define the desired state: Outline the business drivers which HR needs to support. For this, the CHRO must uncover the strategic goals and directions of today and tomorrow. This exercise, in conjunction with the earlier one, will help identify the talent gaps, talent risks and also predict talent outcomes for the future. 

Rope in technology: A technology-savvy HR function can arrive at the strategic talent interventions more accurately and faster. By using the latest tools like talent analytics, cloud-communication, social media, HR can connect with digital-native employees (both current and potential), and better understand their needs. An integrated talent management solution provides an end-to-end talent-view, allowing for more strategic decision making in totality. For example, sentiment analytics can be used to discover underlying talent-nuances related to leadership, performance, engagement, retention, etc. Technology is redefining the ways of working, for example, chatbots and robotic automation. To effectively manage a tech-driven workforce, HR professionals must first become technologically-equipped themselves. 

Delegate and automate: HR can take on value-adding work only when the basic, repetitive work is taken on by someone else, namely machines. Workforce streamlining and automation is a must to drive real strategic value, because then the HR team shall have mental and physical bandwidth to think strategically. A great way to kickstart this is to introduce employee self-service modules. This will also equip the employees, cultivating a culture of empowerment. Tasks which must be done by man, can be delegated or outsourced so that HR focuses on the core competency. 

Be the culture custodian: HR needs to be an influencer and inspiration to be able to make visible, lasting change. While the HR function may transform and don the “strategic hat”, the C suite (and employees) must be willing to accept this new HR function. A good idea is to equip employees to be better at their jobs, thereby increasing productivity and efficiency through a culture of high performance. Design and deploy processes that enable people to succeed. Link these peoples-successes to department and organizational successes, and celebrate small wins. Cultivate a positive, empowering work culture in close association with the CXO suite, and thereby build trust that HR can actively spur business productivity and growth. 

A clap works two ways, and along with HR, business leaders must be willing for CHRO participation in the key strategic decisions. Rather than intermittent meets, HR must be brought onboard the management table with a permanent seat. For this, building trust and confidence both ways is essential, and this can be achieved only when they work closely and not competitively, with each other. 

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Topics: Strategic HR, #LeadTheWay

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