What is HR? Well in definitive terms it means Human Resources and stands for the person and department that looks after the Human Resources element of your company – i.e. your people. Most businesses have a dedicated HR function, with one or more people responsible for running this in-house, but some firms outsource this role, or use a consultant or legal firm to run some element of their HR work. The really great businesses understand that HR should be viewed strategically and broken down with specialists across the very different elements that make up the entire function. These elements could include:
The key difference in unleashing the power of strategic HR? A seat on your leadership team. Thinking about your business – do you have HR representation on your leadership team? If not, you might be missing out on key benefits. In many SMEs HR representation is lacking in leadership teams, whilst other core functions like sales, marketing and finance are represented, and deemed more important to strategic decisions. Why is that? An interesting viewpoint, especially in service businesses – with people as your biggest asset, and expense – is it strategic not to have HR aligned with key leadership decisions? In this post we are going to look at – what is HR really – and where is the value at leadership level?
Often, the reason these other core functions are included within a leadership team is they are viewed as essential, and commercial. HR can often be viewed as a nice to have, versus essential function.
If you have yet to integrate HR at the most senior level of your business, you could be missing out on significant revenue impacts. With most service based, people driven businesses, the most significant differentiator of business success lies in the quality of your people, even more than that – it is often your biggest fixed cost. Outside of this, often the decisions and discussions that happen at leadership level, impact and require the buy in of the people in your business, so why would the department responsible for that not be involved?
For your HR team to perform at its optimum you really should see them as an internal strategic partner that will, when utilised well, accelerate business growth. From working with many clients in an outsourced HR and recruitment capacity and also as an internal partner, we bear witness to the best results really coming when HR is viewed as much more than a bunch of policies and procedures.
The most successful companies fully integrate HR into their businesses and reserve a place for them on the leadership team. We have outlined below four ways you can maximise the impact of HR in your business.
Your HR leaders need to understand your key business goals – you can’t expect your HR activities to contribute to your business growth if the team executing them don’t understand how your business plans to grow.
With this knowledge they can aim recruitment, development and retention activities on what really matters, and create KPIs in line with your strategic goals, versus focussing on traditional HR measureables that are often meaningless in creating real results.
To execute large scale business change, you need to execute behavioural change at an individual level. Your HR team are the key to the success of this behavioural change. Every HR activity, cultural pillar, HR conversation should be aimed at driving the right behaviours.
By having your HR team involved in contributing to business strategy, they will be able to provide real insight into the behaviours of your people, and then be completely aligned with the behaviour needed to achieve those top level goals, which will then in turn influence all of the HR activities in your business.
Your HR leaders need to be given the opportunity to build their own credibility and develop personal relationships based on trust. They must be strong communicators and able to negotiate and influence at all levels with internal stakeholders. By making sure HR is a key part of your leadership team, you can ensure they have access to the same leadership development tools that help elevate their influence with all levels of internal stakeholders.
As HR has a range of different functions you will need different types of people with different sets of skills. One of the biggest mistakes we see growing businesses make is trying to have one person manage all of the different functions within HR – this normally culminates in someone being really strong in one area but others not being executed to the level needed.
The person who manages your policies, procedures and processes will need to be procedural, detail oriented and challenge focussed at their core.
Someone who drives your recruitment activities will require a completely different behavioural skill set – they will need to be able to juggle constant fast balls from changing internal demands and external candidate needs.
Then take your HR leader – they will need to be a visionary with the ability to see the big picture and inspire others on the journey.
What is HR in your business? How involved are your HR team in your leadership team and in setting and executing your business growth strategy? Where might the areas be for increased impact be?
We have designed a service specifically for HR professionals looking for ways to elevate their impact at every level of your business. You can find out more here.