People-related issues will only gain traction with senior executives when HR representatives are recognised as having a thorough understanding of the business context in which they operate.
HR staff might be experts in people issues, but they need to grasp the bigger picture. Too often I have seen the same feedback on HR functions: they can’t add value to the business because they don’t understand it. How can a Human Resources Director really propose an effective people strategy without understanding company objectives, the impact of industry growth, available talent or regulatory constraints?
By tying a company’s people strategy to business requirements, it is possible to plan for workforce movements, skills shortages or whatever the business needs. An effective HR department can be seen to add value to the overall business and gain respect from the executive as a result. They have a choice: be an HR department that is reactive and waits to be told: “We are shedding 50% of the business, go and process the forms” or be a department which executives proactively consult.
HR departments also need to demonstrate a link between time and effort invested in people and business performance. Organisational goals and objectives around performance should be cascaded from the board to managers, teams and individuals. It should then be relatively straightforward to align relevant training to performance and targets.
Unfortunately what you often find is that training is widely available across organisations but it’s not necessarily linked to business requirements. There is no point in sending a group of auditors on a cake decorating course. HR need to own the training strategy, align it with business objectives and then demonstrate its benefits to the board.
One option for companies to increase the knowledge base within HR is embedding more people from a front-line business into HR roles. They should come from a variety of backgrounds, some being HR experts who are learning about the business, and some business professionals who will increase their HR skills. This cross-pollination could both promote understanding between HR and the rest of the business and generally create more rounded employees.
The cost to a business of not having an effective people strategy can be enormous in terms of gaps in workforces, recruitment and retention costs. A fairly straightforward mechanism of elevating people issues would be to model this. Recruiting costs can be significant, particularly when you consider the workforce as a whole. If this is not done effectively the candidate is more likely to leave and on-boarding costs are wasted.
To avoid this happening HR have an important role in co-ordinating different departments and the candidate. A similar strategy will help the business develop individuals and avoid them becoming disengaged and leaving – a further cost to the business.
HR is an integral player in delivering a business’s objectives, but it can only play that part and provide the necessary strategies and metrics if it first understands the company’s mission and environment in which it is working.