Strategic Agenda of Human Resources
A difference between useful Human Resources function and the great one is the plan. A high-quality program delivers tremendous results and makes the voice of Human Resources strong. The ordinary Human Resources department does everything right; the great one incorporates the business strategy and innovates its practices to enable and streamline the productivity boost. This highly strategic HR agenda brings a sustainable competitive advantage, and it makes the business better. Also, the business leader profoundly appreciates it.
Choosing the right approach requires a deep understanding of the essentials of the organization. It is not about a simple transfer of various business practices from other companies. It is not about collecting many best practices and blindly applying them.
Being strategic and having the plan is about developing the approach that fits with the firm’s corporate culture. If Human Resources wants to succeed in the organization, it has to define its strategic agenda. Nobody will write it for HR, but everyone would find out if HR were missing one.
The strategic plan is purely external; it does not solve any internal HR issues. Other business leaders use the plan to improve their departments. It makes them incorporate essential HR processes into their monthly outlooks and task lists. It has to put the state of the workforce on the leadership team’s table to ensure steady and sustainable growth of the organization.
From time to time, Human Resources presents an internal issue as an organization-wide initiative. However, a strategic HR function is not focused internally on its processes and procedures. It does not solve its problems at the expense of others. It puts its internal clients and critical external audiences into the center. Also, it acts as a bridge between the external communities and the interior landscape of the organization.
HR monitors market best practices and challenges the status quo. In search of strategic solutions, it assesses the currently applied people management practices. Observing the market, HR can bring the best-fit solutions based on the latest researches and approaches.
Being strategic protects the organization against its competitors. As Human Resources focuses on productivity and performance, the organization gains a sustainable competitive advantage. However, Human Resources has to put the right items into its strategic plan.
Let us repeat it once more; HR Managers need to be focused externally. The function lives and breathes with its internal clients; it also challenges them with external best practices. It helps them become more productive, efficient, and competitive. Together, they identify gaps, discuss them, and have a tactical plan on how to close them.
As a result, the plan helps internal clients to develop their team, increase its resilience, upgrade skills, secure knowledge, and protect team know-how against competitors.
So, what are fundamental forces influencing the strategic agenda of Human Resources?
Living and breathing with internal clients.
Human Resources is always working for its internal clients. There is no one more important than the internal client. HR will never be a profit center. It does not deal with external clients who pay the bill and salaries. Also, HR does not sell any products directly, and it will never be allowed to. However, it increases performance (when managed correctly). As such, it has a significant impact on the organization’s productivity and value created for shareholders.
A strategic HR agenda has the internal clients and the entire business as a primary target. If the solution does not solve the client’s issue, it is not a perfect proposal.
A strategic plan does not have HR processes and procedures in its scope. It is not an initiative to improve the overall performance of Human Resources. HR Managers apply selected processes and procedures to ensure that customers enjoy a sustainable productivity boost.
A strategic HR plan is about internal clients. It is not a copy of the HR strategy. HR managers must know which values drive critical decisions; they have to predict trends and emotions behind all Excel sheets flowing through floors.
A modern business oriented Human Resources function accepts and takes over the full ownership of the people management agenda. It acts as a valuable business partner that owns initiatives and programs. It makes the lives of its customers more comfortable.
An excellent Human Resources Function always accepts challenges. It makes its team members responsible for the delivery of solutions that fits the needs of internal clients. The personal responsibility of individuals is how Human Resources delivers value-added to the business.
Playing as a strategic partner, Human Resources has to become responsible for business results and achievements. It has to share victories, and it must also take its part in losses. It cannot act as an internal consultant. It has to serve as the owner of issues and challenges. HR solutions and proposals must precede demands.
Being Strategic. Adding Value to the Business.
Proactive HR functions can be spotted easily. It talks about its customers; it does not talk about its internal priorities. It acts to deliver value-added through improvements made for clients. It is how strategic Human Resources operates.
Putting the customer in the center is not easy. Human Resources must understand all requirements and needs of them. It has to build strong and trustful relationships with them. These relationships make the role of HR Business Partner mission-critical.
Additionally, the Human Resources Leader has to maintain a reliable connection with the CEO of the business. The boss has to understand all goals and objectives of the function. Also, she must support the proposed solutions. Nobody trusts HR proposals without a leader’s buy-in.
Human Resources is usually a lonely place in the business. People are cautious with the one who decides about their next career step in the organization. On the other hand, it has to build at least two powerful connections – the CEO and Finance. These two fellows understand what the business needs to make it sustainable and profitable. They can ally to influence others and move the company in the desired direction.
The HR department always has two plans – one for its customers and the second one is purely internal. We are interested just in the external one when considering being a strategic partner. Nobody believes that any improvements within the HR functions as strategic ones. It is just a slight adjustment of functioning based on functional needs.
Additionally, the HR leader has to be widely recognized and respected in the organization. She can usually provide a different perspective when looking at the business issue. She can act as the Employee Advocate in such a moment. Not just protecting the interests of the organization, she can always speak in the name of employees.
There is one thing not to forget. Human Resources must promote functional goals and objectives. All employees must be aware of strategic imperatives driving the organization’s HR agenda (see more on HR Marketing).
In general, the leadership team has to incorporate important HR objectives into a business’s strategic agenda. They have to accept them as their own. HR Managers have to provide sufficient support to ensure that other business functions go in the same direction. The most crucial HR Goals and Objectives will become an essential part of the management responsibilities after a while. Human Resources must provide a simple set of KPIs to be measured through HR Analytics regularly.
The last point in this section is that nobody considers relevant paperwork and compliance as a strategic agenda of Human Resources. All employees take it for granted because it is the essential responsibility of Human Resources. It is an integral part of the job. On the other hand, a strategic agenda item has a significant impact on the company’s competitive position, making the organization more resilient.
Creating and Developing a Sustainable Competitive Advantage.
Human Resources is the only competitive advantage in modern Western society if the HR team runs it properly. Also, it is difficult to copy. Each organization has a different background and a set of values, which makes copying almost a mission impossible.
Human Resources cares about Corporate Culture. It sets general expectations and guides what behavior is preferred. It also clearly states what practices are not accepted at all.
Also, like any other business function, it delivers many small improvements that form the organization’s internal ecosystem. The one that runs smoothly and delivers results consistently. Human Resources unblocks the potential of employees, and it boosts creativity.
From the competitive advantage point of view, Human Resources acts as a gatekeeper, challenging other fellows in the leadership team. The HR leader accepts no proposal without asking challenging questions. It is her responsibility to ensure that Corporate Culture is maintained and employees feel that they are represented in discussions.
Human Resources promotes empowerment and trust in employees. Being quick and agile is more important than having strict control over all procedures in the organization. The HR leader must ask critical questions during the approval of any proposal. Most managers tend to value power over trust in ethical behavior. She protects values and Corporate Culture, which are vulnerable in these moments.
Delegating responsibilities and process simplifications are also a great source of competitive advantage. Usually, Human Resources encourages leaders and managers to transfer as much as possible from their duties to employees. It makes the organization agile and quick in reactions to customer needs.
Internally, All HR Centers of Excellence have to design processes and procedures that unlock the business’s full growth potential. It is the same as challenging other functions in the company. HR Business Partners must advocate for their customers strongly. They have to be an essential part of all projects, and they have to be proactive in communicating customer needs.
On the other hand, HR Business Partners must introduce a strong self-management of the performance. They have to ensure that line managers are fully capable of recognizing top and weak performers. High performing employees want to see the organization acts on low performance and rewards an extraordinary effort.
Forming the winning Human Resources team.
Everything mentioned above can be achieved just with an extraordinary Human Resources team on board. Also, it is the only point on the strategic agenda that is purely internal. Internal customers benefit from it strongly if the unit is set up right and consistently developed and upgraded.
Human Resources did not have a good reputation in the business (see HR Management History). It was a department that was just fulfilling tasks given by others. It was a pure service center that did not contribute to any strategical initiatives and projects. It executed what it was asked to perform.
Nowadays, a leadership team expects that the HR Function is proactive, and it drives its plan. That is the reason why the upgrade of the HR team is required. It is about forming the Human Resources team that understands the business and delivers extraordinary results.
There is a critical success factor – the role of HR Business Partner. She acts as a bridge between business units and HR Centers of Excellence. However, she manages expectations on both sides and judges all the proposal’s options before making a final decision.
A great HR Manager always delivers a proposal that fits with the business strategy, demonstrates respect to employees, and keeps the productivity upgrade in mind. Such suggestions make the business more profitable and highly competitive on the market.
Each HR Leader is responsible for developing her HR team every day. Her fellow leadership team members highly value a constant upgrade in HR skills and competencies. Being a part of serious discussions about the business requires you to understand how the company operates. That is why the business acumen in Human Resources is essential.
Additionally, the HR leader must ensure that all team members are operating out of their comfort zones. By giving opportunities to all team members and mixing project teams, she delivers excellent learning opportunities to everyone.
Operating out of the box is appreciated by the business. People in the organization like to see HR folks stretched and providing a high-quality service to other teams. Also, managers like to discuss issues and challenges with colleagues who demonstrate a willingness to help, a drive to solve problems, and understanding to root causes.
How to recognize a Difference between Strategic HR Plan and HR Strategy.
There is a crucial and straightforward question – what is the difference between the HR Strategy and a strategic plan of Human Resources? The answer is not complicated – a strategic plan centers around customers of Human Resources. It does not include any development of people related processes and procedures. Also, it is aimed short-term. Everything should be achievable within 12 or 18 months.
On the other hand, the HR strategy is a long term and mixes both internal and external landscape. It covers both customers and the future of Human Resources.
The simplified view is that a plan is a tactical tool for improving business performance day by day. Of course, the strategic program uses and fully utilizes all outcomes coming from the strategy implementation.
Additionally, it also provided useful inputs to strategy development and reviews. It can also impact the implementation to a degree. However, from the customer’s point of view, their lives are more about a strategic plan than a long-term strategy. They need to improve business unit performance now, not in several years.
Additionally, the strategy should never stop the implementation of the plan. Human Resources must align these two initiatives so that they support each other. It is not an excuse for HR Business Partner not to deliver a suitable proposal.
Strategic HR Agenda: Topics.
First, we need to understand and describe a competitive Human Resources function. It has a specific agenda, and it has critical business goals in its scope. It outlines its priorities around crucial business processes, and it understands how the business generates revenues and profits.
The next section describes the most common challenges in Human Resources Function. As always, they are both internal and external ones. However, all critical stakeholders expect Human Resources to contain them in all proposals and solutions. Specifically speaking, it includes the following challenges: business sustainability, globalization, technology, an aging workforce, change management, employee productivity, and employee engagement. As HR Professionals, we have to recognize them all and be ready to adapt our proposals as we do improve the performance of our organizations.
Nowadays, it is all about Competitiveness and Competitive Advantage. There is always just one winner in a free-market. The organization that knows how to compete with all its competitors. Everyone knows the winner and everyone wants to buy its products and services. Human Resources influences an excellent source of competitive advantage. It understands how to lead, manage, and develop the workforce. Human Resources can find creative ways to make the organization competitive by changing values, processes, and procedures. Additionally, such a change can be a long-lasting and sustainable competitive advantage.
Shareholders always ask a simple question – they are interested in the value-added. This question also transfers to serious business discussions. How can Human Resources become a respected partner who shares the responsibility with the rest of the leadership team? It has to add value, and others have to recognize it. HR is not about soft deliverables and measures anymore.
HR has to deliver hard facts about its performance (advanced HR Analytics helps a lot). It must prove that the function generates an additional stream of revenue. The next section covers how Human Resources provides value-added. It also describes how HR Managers build strong relationships with internal clients and relevant external audiences like associations.
In the past, Human Resources was a comfortable department in the organization. No one had high expectations, and its role and responsibilities were limited. Most of the time, it acted as an internal consultant. Line Managers were always complaining about it. They did not feel any profound interest and involvement of HR Managers. They criticized the lack of support coming from the HR team. However, nowadays, Human Resources demonstrate the ownership of different procedures, challenges, and issues. Which are the crucial ones?
The entrepreneurship spirit of employees is one of the most desired values. Also, leaders like employees acting like business owners, open-minded, and humble. It is all about Corporate Culture. It is invisible, but everyone can feel it. Everyone can recognize a company DNA as soon as she enters the reception. Successful organizations have distinctive Corporate Cultures that unlocks the potential of employees and bring creativity boost. People in the organization want to collaborate, being empowered, responsible and allowed to make independent decisions. Again, it is a core role of Human Resources to cultivate corporate culture. It is a competitive advantage that no competitor can copy (easily).
Nothing lasts forever, and Rome was not built in one day. Also, each leader must keep in mind that the organization needs to be passed over to a new leader one day. Plus, growing a new boss is not a task for a day. The entire top management has to search and develop several successors to keep the company in shape. Does your leadership team grow and develop successors? Or is there a single person dependency? Succession Planning is another item in the strategic plan of Human Resources.
A competitive organization has a tremendous strategic compensation system (you can also visit the full Compensation and Benefits overview). It is not just a pure Pay for Performance concept; it comes with a sophisticated package that recognizes and rewards not just top performers. It has a reward or a recognition for innovations, great new opportunities, significant simplifications, and extraordinary sales achievements. It supports a team spirit, and it also recognizes teams. It promotes healthy competition among employees and encourages their engagement and ownership behavior.
A true leader pushes productivity up to the limit. The HR leader has to play the role of a brake from time to time. Her role is to protect the rights of employees. Employees require an advocate who protects them against the leadership team. They expect that Human Resources will play this highly demanding role, because else in the organization should act as an Employee Advocate. It is a challenging role because HR Managers are often in severe conflicts with line managers. How can the HR department succeed in this challenging and conflicting role?
Employee Engagement is an overused word in recent years. The workplace was not about keeping and increasing productivity; everything was about happiness and employee engagement. However, when it is done right, it has tremendous results. It boosts productivity, decreases turnover, and strengthens Employer Brand. On the other hand, it has to be well-balanced with different requirements. The next section covers how to keep employees engaged and highly productive.
The business is about constant change. On the other hand, most employees prefer stability over the unstable world. We are resistant to changes because we understand that they represent a threat to us. Human Resources ensures that employees understand changes and accept them. Supporting and teaching Change Management is the highly strategic role of HR Managers.
The non-performing business has a zero chance of survival. Competitors will grab a market share, and the organization will run out of money. Satisfactory employee performance is a fundamental prerequisite for a successful company. Another essential strategic item, Managing Performance, is a critical success factor of Human Resources. It has to manage low performers out and promote top performers as success stories. Also, it has to encourage line managers to improve their performance management skills.
We are social creatures that love to learn new things. That makes us different from robots – our ability to learn, adapt, and improve ourselves. We usually see, learn, and use new stuff almost every day. The organization we work for is not an exception. It is an organism that has to learn through its members. The organization has to enlarge its skills base and forget old approaches to improve itself. It is not pure change management; the organization has to be open to learn new things and try new methods. Learning Organization is not a myth; it is a modern firm that demonstrates its ability to be inspired internally and externally.
Strategic Workforce Planning combines the strategic goals of the organization and the workforce. It helps to uncover gaps in skills and competencies and provides useful inputs to recruitment and staffing procedures, learning, and succession planning. Sure, it is time-consuming, but based on its results Human Resources can develop employees, find new talents on the market, and make the business competitive.
Being internally visible is a part of success. Being widely recognized is essential. HR Marketing is a discipline in which most HR functions fail. The next section covers the vital HR Marketing, including the presence in Social Media. Human Resources has to learn how to attract and influence critical internal and external audiences. Nobody will recognize HR results if they do not know what Human Resources does.
The war for Talents is full of small victories and losses. Human Resources has to build a vibrant brand name, set of values, and influencing approaches that are attractive to the most important target groups. These groups are usually just two – employees and potential employees. The most successful organizations also include ex-employees and retirees. They know how to spread the word, and as a result, the critical job vacancies target the right audiences, and the best candidates are revealed.
HR is going digital, being quicker, more responsive, and cheaper. These are the key imperatives of Digital HR. Human Resources has to act as the change champion. It has to find affordable digital solutions that make the employee’s life cycle smooth, digital, auditable, and enjoyable. It is not about massive and monolithic HR systems; it starts with small things and processes that have a considerable impact.
And as a last item on the list, it is about Strategic Human Resources Management (SHRM). It is about identifying critical processes and procedures that increase the performance and productivity of the organization. Just a few selected HR processes are part of SHRM. Also, it is not about re-setting HR strategy; it is about applying the right processes and procedures at the right time. As a bonus, it also covers strategic thinking and strategic planning.