Moving human resources from compliance to strategy

For most organisations the human resource function is simply one that feeds into compliance. Recently there has been a significant rise in the role of the Chief Human Resource Office or HR Director as a strategic resource in the organisation. The challenge for any business is to get from HR being a compliance function to a major business contributor.

In recent years the HR function has come under pressure — especially in emerging markets — as a non-entity that does not add value to the organisation.

HR has the potential to be a strategic force in most organisations but it is seldom that we move beyond the basic HR functions to the idea of HR as a business driver.

The following levels outline the role and function of HR at different levels and allows you to ask where you stand in the great scheme of HR maturity and HR strategy contribution.

At level 1 we comply and progressively we move to HR being a more strategic force in the organisation.

Level 1: Comply

Compliance makes sure that we do not fall foul of the law — but adds very little value to the organisation.

1a) At its "lowest" level HR is simply about making sure that we pay our staff.

1b) The next level of HR ensures that the latest statutory submissions in order, that all staff are paid and that that occupational health and saferty regulations are met. Procedures are in place to comply with employment law and compensation.

Level 2: Staffing

Staffing fulfils the basic functions of making HR a tactical solution and it allows the business to be competitive and comparative in terms of ensuring industry parity of employment.

2a) This level ensure that all staff have job descriptions, effective management of hiring, basic scheduling and time management, training, management of staffing levels, effective layoffs and business unit restructuring, integrated performance management

Level 3: Employee Energy — Satisfaction and Engagement

Employee satisfaction moves to recognise that an employee performs better when there is pro-active management of their employee satisfaction and engagement.

3a) Design of an effective and comparative employee benefits portfolio, employee satisfaction surveys, employee communications (staff meetings, newsletters, formal and informal get togethers), effective employee relationships and procedural and substantive fairness in labour practice.

3b) Improving employee engagement with the business and with customers through equipment, technology, resources, reward systems (hygiene factors).

3c) Improving employee engagement with the business and with customers through relationships with immediate supervisors, belief in senior leadership and pride in working for the company (motivational factors).

Level 4: Culture of engagement

The fourth level looks at the role of HR in creating a culture of engagement. While the 3^rd level has also focused on engagement at this level it looks at the institutional framework that makes engagement useful.

4a) Enhancing employee engagement to accelerate teamwork, growth, learning, community, work/life balance, providing meaningful feedback, empowerment and recognition. Accelerating performance by meaningful support of individuals that are drivers in the business

4b) Managing talent through succession planning, delinking goals and individual performance management, effective succession, leadership development across all levels of the organisation, job rotation and other opportunities to grow the contribution of individuals and team.

4c) Start focusing on the employer brand through driving key metrics in retention, remuneration, development, employee satisfaction, employee engagement and promotion of the employer brand as a linked brand to the main company brand.

Level 5: Strategic contributors

At the strategic level the HR conversation changes to providing the right resources on time, in budget and to outpace the competition through having the best people.

5a) Strategic sourcing of staff. Translate enterprise strategy into global workforce requirements, plans and programmes and make decisions around building talent, recruitment, outsourcing or repurposing of existing workforces. Develop a formal plan to attract, develop and deploy the best global talent. Oversee external recruiting and succession management.

5b) Contribute to business strategy and work with business leaders to develop enterprise strategies that make sense in light of global labour trends and the company's existing talent base.

5c) Forecast talent needs and assess the workforce's current capabilities. Anticipate the skills, knowledge and attitudes required for future success and build these into the organisation to mature at the appropriate time.

5d) Ensure that learning skills and career development is a formal part of the business and that it delivers the correct mix of development programs to satisfy the company's unique requirements.

5e) Drive the employer brand as a first port of call for all talent and manage the leadership brands in the organisation to ensure maximum external impact.

Level 6: Strategic Initiators

For most organisations there is very little thought about the next frontier. One of the fundamental challenges is that companies always say they lead with people but they are always reactive towards that leadership. To move HR beyond a "partner" role to an initiator role requires a rethink of HR from the ground up. Some of the proposed function of a HR as initiator would include

6a) HR as a product set. Often the people are as value to us as to others — how can we transform our HR into an effective high value product while retaining our core.

6b) HR as an application set. Our methods and methodologies may make us an effective force for managing other workforces. This may open the path for effective acquisitions of rival firms with weaker methodologies in order to capture market share.

6c) HR as a outsourcer and automator. HR must play an incredibly strategic role in driving metrics of what people are able to do and what must be moved into or out of the organisation and automation. HR seems always to want more headcount — but it has a strategic initiation role in ensuring that automation and digitization is effective in driving the organisational performance. A strategic HR function would drive innovation in order to ensure that headcount can add more strategic value to the organisation through offloading low value added positions in through outsourcing or automation.

6d) HR as expander. Whenever an organisation needs to grow into new markets or new ways of doing things — HR initiates and drives this process. HR needs to have effective programmes for managing cross cultural integration and integrated performance across many different geographies and systems.

Moving up the HR ladder — beyond HR as a partner.

As with all things – where there is a vision, there is a path to walk. HR for many organisations need to evolve from being a social function that makes sure that employees do get paid, to a strategic force in a business that delivers the next frontier.

To start moving HR up this ladder it is important to realise that it will not help to increase the social budget and have more staff barbeques. Just like anything that requires a return, there is investment and risk that come into play.

One suggested path would include

1. Build a clear vision of the contribution of HR to the business

2. Recruit the best people to deliver on this vision

3. Develop a clear roadmap on how to get to the ideal functionality and put this in place through investment and support

4. Invest in HR as the human technology in the business

Conclusion

Human Resources as an incredibly strategic role that it can potentially play in a business. Businesses always profess that their biggest asset is their people — and while it is often the biggest expenditure of a company — it is not always managed strategically. The article has outlined that the Human Resource function has a more strategic role to play in any organisation and that any company where HR is a