Elevating HR’s role to drive a sustainable business future
Despite HR’s evolution over the past 20 years, HR is not consistently creating sustainable business value for organizations. Only 20 percent of business executives believe HR is adequately planning for their companies’ future talent needs1. And, only 22 percent feel confident that their organization is adapting well to employees’ needs. Coupled with workplace and workforce disruptions, the challenge to HR is clear: step it up, or you could lose your seat at the table.
Conventional wisdom suggests that a “good” HR strategy only needs to answer three basic questions: Who are we? What do we deliver? And why do we do it?2 While these questions attempt to focus HR’s efforts and align HR to the overall business strategy, they are too internally focused and relegate HR to acting as just a support function.
Imagine HR “playing up” a level and transitioning from a support function that offers “HR” advice and guidance to business leaders, to operating as a co-owner, enabler, and influencer of the business strategy and operations. We propose that a truly effective HR strategy identifies the components of an organization’s overall strategy that HR is responsible for delivering on, held accountable for, and consulted to shape. For example, HR can and should influence the culture; create differentiated experiences for the organization’s people that help the enterprise deliver a “Simply Irresistible Experience” for its people; and, increase workforce productivity through innovation. When HR can effectively drive these kinds of meaningful results in partnership with other leaders in the organization, it will be equipped to lead the business and workforce toward a sustainable future.
What does HR strategy really mean?
A business strategy provides the framework through which an organization grows, innovates, and creates a sustainable future with a defined purpose. However, organizations only achieve their strategies through the focused efforts of their people. Practically, this means that HR’s strategy should include the following components:
- Evolving organizational culture and purpose
- Improving productivity and innovation
- Navigating workforce and workplace disruptions
Evolving organizational culture and purpose. Culture is one of the most talked about topics of 2017 and is on the radar of executives as they look to mobilize their organizations to take on today’s business challenges. However, the majority of organizations do not understand their culture or know how to evolve it.3 When strategy and culture are aligned, companies can show as much as 50 percent differential in performance4; and to help energize a culture into a competitive advantage, the active ingredient is the emotional connection between the enterprise and its employees. HR should be accountable for influencing leaders and the workforce, helping to ensure that leaders project the right behaviors and values to foster the desired organizational culture.
- Your organization may already identify a set of common cultural values that you want to uphold. Now, imagine if you could pinpoint critical behaviors that drive cultural values, refine competency models, cement behavioral change with metrics and rewards and ultimately drive differentiated business performance.
- Your HR organization may already provide employees with development opportunities that help them find purpose. Now, imagine if you could use stories and images to connect the work your organization does to a higher purpose, work with business leaders to link specific employee accomplishments to larger organizational goals, and create differentiated experiences where talent can help them better reach their full potential.
Your HR organization may already measure your culture and engagement through yearly surveys. Now, imagine if you could use tools that analyze and derive insights about culture and purpose, and guide you toward developing programs and policies that address the needs of your people
Improving productivity and innovation. Across thousands of companies, engagement is flat year over year5. Despite the rise in the average amount of hours that employees are working in the United States5, productivity is rising by only about 1 percent annually6. Why? Few organizations have mastered engaging talent or motivating a multigenerational workforce. Engaged talent is essential to effectively compete in today’s talent market and capitalize on innovations in technology. HR should help its organizations revolutionize the employee experience, drive innovation, and create high-impact value to the business.
- Your HR organization may alreadybe working hard to meet your customers’ urgent demands, but are you responding through one-off, isolated solutions? Now, imagine if you could use data to proactively pinpoint and influence the interactions that combine to create an irresistible employee experience.
- Your HR organization may already be pursuing innovation through investments in a core technology that enables HR employee self-service. Now, imagine if you could implement technologies that drive engagement and productivity across the entire workforce, such as immersive learning software to build new capabilities.
- Your HR organization may already use feedback mechanisms to understand the opinions of your workforce. Now, imagine if you could develop the capabilities to respond, at scale, to new information and insights in a way that is in tune with your talent’s needs and desires.
Navigating workforce and workplace disruptions. HR is specifically positioned to lead the organization through workforce and workplace disruptions. To do so, however, HR should embrace the tools of data, structure, and strategy to remain agile. HR can only lead value creation to the larger organization if, as a function, it is both actually and strategically proactive and truly leading from the front.
- Your HR organization may already use benchmarks and market research to determine if they add business value. Now, imagine if you could reverse-engineer what’s common across successful HR organizations, pinpoint key characteristics, and leverage a “fit for purpose” framework that correlates to sustained high impact on the business through and approach that is tailored for the unique priorities and culture of the organization.
- Your HR organization may already use customer data to drive business decisions. Now, imagine if you could synthesize multiple types, sources, and iterations of employee, customer, and workplace data to evolve appropriately and maintain a competitive advantage—even in a constantly disrupted market.
- Your HR organization may already prepare for a sustainable future by building effective team structures that stand behind your vision. Now, imagine if you could devote your organization to agility through the development of a dynamic, flatter networks of teams, and leverage and enhance their potential by examining the creation, performance, and individual collaboration used to accomplish work.
Tying it all together
In a world where evolution means survival, “playing up a level” should be the only viable option for HR. Bersin™ research shows that high-maturity HR organizations tend to have stronger business and workforce outcomes. They are 1.3X more likely to meet financial targets, and 3.2X more likely to manage change effectively7. The time is now to redefine your HR strategy: transition from a support function offering HR advice to an owner, influencer, and enabler of the business strategy.
1Global Human Capital Trends 2015: Leading in the new world of work, Deloitte University Press, February 2016.
2David Ulrich, et. al., HR Transformation: Building Human Resources From the Outside In, RBL Institute, McGraw-Hill, June 22, 2009.
3Global Human Capital Trends 2016: The new organization: Different by design, Deloitte University Press, February 2016.
4James Heskett, The Culture Cycle: How to Shape the Unseen Force That Transforms Performance, FT Press, 2012.
5Bersin by Deloitte proprietary research with Glassdoor.
6Kim Gittleson, “Can a company live forever?” BBC News, New York, January 19, 2012.
7Stacia Sherman Garr and Candace Atarnanik, High-Impact Talent Management: The Talent Management Maturity Model, Bersin by Deloitte, Deloitte Consulting LLP, 2015.