Aligning HR Initiatives With the Corporate Mission
This article draws on research highlighted in the whitepaper "Workforce Analytics: Key to Aligning People to Business Strategy." You can download the free whitepaper, courtesy Human Resources iQ and SAP, here.
Time and time again, research shows HR departments are still not fulfilling their potential as a strategic business partner in organizations.
For numerous reasons, none of which have been helped by the global economic downturn, the functions of the HR department are often not aligned with the goals of the boardroom, and this is something both need to address.
New research from Hyland Software found 91 per cent of professionals working across a variety of business functions continue to see the biggest challenge for HR as being "to bridge the gap from a transactional function to a strategic business partner".
Additionally, research by Aberdeen suggests some of the top barriers to further investment in Human Capital Management (HCM) are: HR spending too much time on transactional tasks; lack of buy-in from senior leadership; and lack of reinforcement or support from business leaders after new HCM initiatives are deployed.
But this research is really just the latest in a series showing the disconnect that exists within organizations.
From talent management to training, time spent on HR functions which does not align with the ultimate business goals is ultimately wasted – and in some cases even forces an organization backward as employees fight against the tide and morale plummets.
Building the Bridge
When it came to addressing the factors which stop HR becoming a strategic business partner, the respondents were clear on two main points, the HR Magazine report outlined.
Forty-six percent said a lack of business and strategic vision lay at the heart of the problem, while the same number said a "failure to attract, develop, retain and reward suitable talent at all levels" was the key reason for goals not being met.
Mark Greatorex, director of Hyland Software, said it is clear from the results that there are serious amounts of work which remain to be done – and there should be no delay in implementing the changes.
"HR departments must consider the practical steps needed to build deeper strategic insight and drive closer business alignment.
"Yet the speed with which such activities are initiated means HR must also look at its own effectiveness in terms of service delivery, speed of response, process execution, workflow automation and cost control."
Aberdeen’s December 2010 report, The 2011 HR Executive’s Agenda, states that those companies who have implemented workforce analytics and reporting tools are nearly two-thirds more likely to indicate that HR is fully aligned with corporate strategy.
An earlier report by Aberdeen shows that organizations using metrics tools experience a14 percent year-end revenue per employee (as opposed to five percent for those who do not.) Furthering the case for workforce analytics are increased ROI due to a 20 percent cut in unnecessary overtime, doubled customer satisfaction, and a 13 percent increase in workforce utilization.
Talent management continues to remain one of the key ways in which HR departments enable companies to meet their strategic vision.
As new research from Deliotte has highlighted, in an increasingly globalized world, this also means managing an increasingly global workforce.
The worrying results from the poll covering 140 global organizations show just 2 percent currently see a complete alignment between their global mobility function and business and talent strategies, although 90 percent would characterize it as being important.
Almost 40 percent said they felt their global strategy needed a radical change, while 20 percent said they felt it was adequate, but had room for improvement.
Current approaches to global talent management are leaving organizations in danger of not having a strong enough leadership pipeline to grow and prosper in the future, Will Gosling, a Global Mobility Transformation partner at Deloitte,warned.
However, the opinions of how global mobility is performing varies on who is being asked, the research explained.
While nearly half of the executives outside of HR said they felt their strategy was not performing or properly fulfilling requirements, this figure was only around a third for those working in HR departments.
Leader of the report Rob Hodkinsonsaid: "The transition from global mobility being viewed as a transactional cost center to a value-add strategic partner is a difficult one."
Ensuring a strong talent mobility structure is also essential if companies are to emerge victorious and continue to grow as the war for talent rages.
"The development of strategic expertise within global mobility functions will be an important way for companies to address the challenges ahead, as this will enable them to ensure their mobility strategy aligns with the business and talent objectives," Hodkinson concluded.
Aberdeen’s research also states that those organizations whose HR functions are best aligned with corporate strategy have dashboards and reporting tools in place (such as headcount reports, overtime reports, absenteeism data, and payroll reports) that enable management to ensure that employees are being properly utilized and fairly treated. But training these managers is imperative, as it "improves productivity at the unit-level and through real-time access." This also relieves HR of some of the transactional burden.
But tools alone are not enough to ensure proper strategic alignment of the HR function, the report by Aberdeen concludes. 87 percent of organizations using analytics tools have a global repository for all workforce data. "Several key organizational capabilities must also support the use of these tools. Primary among these is ensuring that the data is accurate and up-to-date to enable decision-making," according to the research brief.