An organization relies on its people, yet too often the strategic value of people themselves is overshadowed, and by default, the human resources function is brushed aside. According to a DDI Global Leadership Forecast, HR is even seen by CEOs as providing less strategic value than any other major business function.
Yet the role of HR underpins everything employees do at work and touches all departments.
With such a significant footprint, how can HR professionals best angle themselves to be more strategic and gain greater visibility and leverage for their work?
Understand and Drive the Business Value of HR
After decades of research, there is currently a wealth of studies available showing the value of an engaged workforce. The business case for HR is stronger than ever.
For example, a Gallup study found that organizations with engaged employees outperform those with low engagement by 202 percent. In addition, these companies typically experience 40 percent lower turnover, 21 percent improved productivity, and 22 percent higher profitability.
In contrast, a study by Towers Watson discovered that companies with low levels of employee engagement had a 33 percent annual decline in operating income and an 11 percent annual decline in earnings growth. Toxic culture doesn’t remain a secret either. All it takes is a quick search to see the negative fiscal impact of scandals, unhappy employees, and lawsuits.
The same Towers Watson study found that companies on the other side of the spectrum, with high employee engagement, saw a 19 percent increase in operating income and 28 percent growth in earnings per share. If a company is committed to a positive employee experience, there are substantial benefits to your bottom line.
To better position HR with a seat at the table, a meaningful budget, and power to make strategic decisions, I highly suggest gathering persuasive metrics such as these and tracking metrics which are relevant to your organization’s business goals. With these you can build a compelling narrative which aligns your work in HR with the company’s fiscal and overall success.
Work to Align the Whole Organization With HR Strategy
Across our more than 400 customers at Reflektive, we’ve noticed that the most successful HR initiatives were led or sponsored by a business leader. People-focused initiatives don’t have to officially involve HR to be successful, but they do need a champion. This person’s goal should be to demonstrate that feedback, goal-setting, and career development are good for staff and organization alike and don’t solely reside in HR’s court.
There are many tangible ways business leaders and managers can benefit from an organizational alignment to HR:
- Significant time savings in hiring, onboarding, ongoing employee support
- Increased retention, as highly engaged employees tend to stay longer and perform better
- Higher productivity due to clear understanding and prioritization of business goals
HR can also work on establishing new norms. To create behavioral change across an organization, set new norms. For example, if you want managers to conduct regular 1x1s with their reports, establishing a culture where it is taboo to not have 1x1s will support that change. If you want employees to own their careers, offer them the opportunity to set the development agenda with their managers and suggest examples of learning areas they would like to explore.
Define and Redefine Employee Experience
The metrics certainly support the importance of the employee experience from the external results, but it is essential to take a deep dive into your own organization’s situation. By getting a grasp on the entire picture you’ll be positioned to take action and will have highlighted the significance of employee engagement along the way.
Start with the primary questions: How does your organization define employee experience? Are you honest about what it is now, what it could be, and—perhaps most critically—what it can’t be?
We’ve learned from our customers that being realistic about culture is vital to retain and inspire employees. This holds true even if your culture is still young or isn’t warm and fuzzy. It’s better to have an imperfect culture and face that with honesty than to espouse great culture and not follow through. The latter causes uncomfortable cognitive dissonance for employees, because the organization’s actions and words don’t line up.
For instance, a Wall Street financial firm can acknowledge that it is aggressively bottom-line driven and make that clear during the hiring and promotion process. Candidates will likely make a choice to opt in to a culture that fits their expectations and go on to perform well, or opt out of if they’re looking for a different kind of culture. Both sides benefit from this transparency.
Another area to explore is how you are gathering feedback from employees and what happens to it. Are you sabotaging their experience by gathering lots of quality feedback and then doing nothing with it, or even acting against it? Are your feedback questions or methods out of touch with their reality? This signals to employees that the organization doesn’t care, and they shouldn’t bother to give quality feedback anyway.
Ensuring that behaviors, systems, and practices around the employee experience are well-defined, well-aligned, and continuously adapted is the best practice for ensuring results.
Leverage Technology to Offer More Strategic Value
We’re building technology at an unprecedented rate to solve problems, and the HR space is no exception. The right piece of technology can absolutely be helpful, but it’s important to make the right choice when you want to show strategic value. My advice is to do your research and choose a software solution which will deeply augment the existing role of HR at your organization.
HR software can and should do the following:
- Automate routine, mundane, and error-prone functions of the HRBP role
- Reduce bias by offering tangible dates and details of recognition, feedback, and goals for team members
- Offer employees in a diffuse organization a platform to communicate about news and wins
- Facilitate data exploration to better understand goals, outcomes, and the business value of your organization
Bear in mind that even the right HR technology for your organization is not a magic wand: It can’t prevent all of your employees from leaving, create effective managers overnight, or put HR leaders out of a job.
Buying a top-of-the-line HR solution and expecting it to solve all your organizational people problems is like buying a top-of-the-line stove and expecting to become a world-class chef. Both are simply tools which can produce something wonderful with an experienced person at the controls. In the end, there is no automating away the true strategic value of HR professionals to deeply understand and shape the employee experience.