No Excuses: If HR Wants to Be Seen as a Strategic Business Unit, Then It Has to Start Acting Like One
I’ve seen that term “strategic HR” thrown around so much in recent months that I’m starting to worry it’s slipping into buzzword territory – and there’s no quicker way to ensure something doesn’t get done than to turn it into a buzzword. Once that happens, all we have to do is say the word, invoke its power, and make everyone “ooh” and “aah” for long enough that we all forget to move on to the more important task of actually implementing the ideas behind the buzzword in practice.
Strategic HR is a terribly important business function, and I’d rather not see it get buzzword-ed out of existence. So before going any further, I’d like to remind everyone of the concrete actions that underpin strategic HR and separate it from regular, old, everyday HR, with a little help from BambooHR’s VP of Human Capital Management Strategy, Intellectual Property, and Product Marketing Rusty Lindquist.
(If you don’t need this refresher, feel free to skip to the next section – though I encourage even the most grizzled of HR vets to stick with me here. A little reminder could be all you need to keep your feet on the ground in the face of seductive buzz-language.)
According to Lindquist, HR tasks can be separated into one of two categories: operational and strategic.
Operational tasks are “those that keep the business running,” and they include things like payroll, benefits administration, the draft of company policies, and so on.
Strategic tasks, on the other hand, are “activities that help drive business outcomes.” Things like employer branding, culture promotion and maintenance, employee engagement, retention strategies, and operational efficiency all fall under the strategic umbrella.
Good? Okay, onto the main event:
The Anti-Strategic Stigma of HR
We’re talking about strategic HR today because of an interesting survey that BambooHR released early in January. The results of this survey, Lindquist says, aren’t exactly surprising – but that doesn’t make them any less troubling.
In short, after speaking with more than 1000 business leaders, BambooHR found that even though the vast majority of them said it is important to implement strategic HR practices, very few of the organizations surveyed are actually engaging in strategic HR. (For a full breakdown of stats, check out BambooHR’s site, which includes an infographic that visually explains the survey’s full results.)
“Increasingly, there’s a perceived need for HR to move out of the operational and into the strategic,” Lindquist says. “There’s a war for talent, and organizations have to turn to their people for differentiation [in the talent market].”
As the economy continues to recover from the Great Recession, job seekers have more and more opportunities available to them. Furthermore, as millennials enter the fray, the workforce’s desires are shifting. Traditional differentiators, like technology and paychecks, are not enough to grab the attention of many of today’s top candidates. Instead, employers need strong cultures to attract candidates – they need to “make the most of their people,” as Lindquist says.
Executives know this, which is why they believe strategic HR is important. But these same executives are doing little to support the implementation of strategic HR because, Lindquist says, “HR has a propensity to underdeliver on that value promise.”
As a result, executives have begun to attach a stigma to HR departments, which has lead to a self-fulfilling prophecy situation. As BambooHR puts it: “Frequently, business leaders don’t think of HR as a strategic partner because they don’t yet act like one; and they don’t act like one because the company leaders don’t give them the resources to be able to; it’s essentially a self-fulfilling prophecy. A great groundskeeper can’t be expected to beautify a lawn when all they have is a pair of old-fashioned hand shears.”
Sounds grim, doesn’t it?
And it should, especially to those HR pros who want to make HR into a strategic business unit (there are, according to BambooHR’s data, a lot of these people out there).
But there’s some good news in all of this, according to Lindquist: HR departments don’t have to let leadership’s lack of faith and support prevent them from becoming strategic business units. In fact, if HR is tired of not having the resources it needs to be strategic, all it has to do is start acting strategically, and it will get those resources.
Okay, Lindquist puts it more eloquently than I do, so I’ll let him take it away: “The way out is for HR to start performing strategically. As they do that, incrementally, executives will start to see them as being more strategic and will let them have a seat at the strategic table.”
Don’t know where to start with your strategic HR efforts? Here are Lindquist’s top two suggestions:
1. Automate Your Operational Tasks
“One of the things HR really needs to get better at is deploying tech to automate operational tasks,” Lindquist says.
See, HR can’t even begin to act strategically if operational duties are still consuming all of its time. That’s why you have to start at the bottom. Get the annoying – but necessary – operational stuff off your plate through automation, and that will free you up to dedicate most of your time to the meaty strategic stuff.
“But we don’t have any money for automation!” you wail.
Lindquist’s answer: Oh yes you do.
“We’re in an economy where there is lots of HR tech available, and the prevalence of that tech has driven prices down,” Lindquist says. “The barrier to entry is so low that there’s no excuse for not using tech to automate your transactional tasks.”
2. Start Looking at Your Department as a Business Unit
In part, HR has a bad rep with leadership because few HR pros speak the language of business – or, to put it more bluntly: Execs aren’t supporting your strategic work because you don’t use words like “value,” or “customer,” or “resources” enough.
If you want execs to consider offering you a seat at the strategic table, you need to start talking like an exec. Of course, you can’t just adopt the language (see the entire intro to this piece): You need to actually live the ideas behind the language. That’s how you turn your HR department into a strategic business unit.
Lindquist says you should start by asking yourself a series of questions, including:
– Who are my customers? (The answer here should be: Candidates, employees, and executives, of course.)
– What do my customers want?
– How will I deliver value?
– What activities are required to deliver that value?
– What resources do I need to deliver that value?
Once you’ve answered these questions, you can start running your HR department more like a business unit.
“If you adopt that customer-first view, like a business, you start behaving differently,” Lindquist says. “You start to change what you deliver in terms of value, and you start to change how you sound to execs.”
And once leadership sees that the HR department is acting like a business unit, it will be a lot less hesitant about getting on board with strategic HR practices.
These are great places to start your HR department’s transformation into a respected strategic business unit, but you have to act quickly.
“There should be a sense of urgency about this,” Lindquist says. “CEOs have been saying that human capital is one of their top priorities for a while now. This is not a problem they are going to let go. And part of thinking about [HR] as a business is realizing that, if your business doesn’t deliver the value your customers need, they will go somewhere else.”
In other words: Executives are looking for HR to start delivering ASAP. If HR doesn’t step up to the challenge, there could be some very nasty repercussions.