The 4 keys to increasing strategic awareness in HR
It’s a question I get asked often: “How do we increase strategic awareness in HR?” It’s always a fun question to answer. My response is almost always “why do you want that?”
I ask that because each organization I work with often looks at HR through different lenses. Some see HR as the “paper pusher” or the “people you talk to when you’re in trouble.” In fact, I had a conversation with a friend last week who is a people manager, and an employee came to them and said “why do I have to go to HR, am I getting fired?” Perfect timing for this blog.
Other organizations may view HR as “the people who manage all of the things others don’t want to when it comes to people or process.” I think you're starting to see the trend here — it's very common for HR to be seen as a tactical function, but tougher for HR pros to break through into the strategic roles where they can arguably be most effective.
This isn't always the case, though. There are the high performing organizations (HPOs) that have stronger relationships with HR. Looking at these organizations is a prime opportunity to question why that is, and it allows us to build better practices that improve experience, engagement, and overall company performance. So with all that said, my question to you is how does your company view HR? Because the bottom line is that will help inform your best path to strategic awareness.
To help you with this process, I’m going to explore four ways you can change the perception of HR by getting on the pulse of your business's strategic efforts based on some recent research UKG and HCI did together in our Great Reset study.
1. Know what "awareness" really means
Let's face it — awareness is a super generic term that gets used too often with very little direction. It can be frustrating when someone says “just be aware” with the multitude of other things you have going on. Or you may be aware, but you don’t know how to take action with all the noise in your day-to-day. When working in HR I tend to focus on the big picture and provide some practical ideas that will keep you moving forward rather than talking about vague concepts like "heightening awareness."
For example, here's an easy one: stay up to date on current events that impact your organization. This can be overwhelming when you start, but if you're anything like me or my wife, I'm sure you have some go-to resources where you keep up with the news and pop culture, so start with what you know and build from there.
What makes the effort to keep up extra overwhelming right now is the fact that 2020 has been a rough year to say the least. On top of COVID-19, it’s been an emotionally heightened time with lockdowns, elections, and protests against social injustices happening across the U.S. What's more, all of these things impact HR in some way, so what should your priorities be?
The key here is to remain true to the values of HR and stay focused on people. All these struggles in our personal lives directly impact our professional lives and the goals of our business, so it's critical to take them into account as we build strategies. HR can be the bridge here between business leaders, managers, and employees if armed with the right information. Staying up on current events helps in that mission and gives the opportunity to communicate about those events through our internal forums, HR technology, and company events promoting unity and empathy, as well as working with managers to ensure employees feel supported.
The Great Reset report shows that for HPOs, organizations that report more favorable talent and business outcomes also report stronger HR-business partnerships. A first step toward those outcomes, especially in difficult times, is keeping your ear to the ground and helping business leaders focus on the well-being of your people and see the ways that focus helps grow the organization at the same time.
2. Know the business
Understanding the product or service your company is providing won't give you the whole picture. Don’t get me wrong, it’s very important. However, it only scratches the surface of how the entire business operates. I’m not questioning your ability to understand, I’m saying take initiative to understand the working components of different departments and how they relate to the goals leadership sets.
Our study with HCI revealed a pretty shocking statistic — 64 percent of HR leaders at non-HPOs could not explain their organization's top three strategic priorities. Beyond that, only 44 percent could explain the organization's vision, business strategy, and goals to employees. Becoming skilled at these explanations takes learning the jobs associated with each department, the roles different employees play, and how they contribute to the wider business. When you walk in the shoes of your people at all levels, you'll be able to communicate strategy in ways that resonate with the different groups at your organization.
A side benefit of doing this is you'll quickly identify process inefficiencies or gaps that may be slowing various components of the output down. A simple starter for this would be to meet with department managers and have a conversation that starts with “tell me about yourself and what you do.” If you really want to impress them and come prepared, know the competitors in your space and how they're innovating. According to the study, only 4.4 out of 10 HR professionals believe they have the business and financial acumen to relate to what's going on with the business. That’s not good enough, and understanding both where your people and competitors are focused is a great way to start getting better.
3. Know the numbers
This one is my favorite section because I believe everything can be measured. In the Great Reset study, another daunting statistic is that “7 out of 10 people didn’t feel data analytics skills were important for HR to be considered a successful partner to the business.” I strongly disagree with this response. Although we are focused on people first as HR professionals, we can’t forget that we're also helping drive business outcomes for the organization. Data analysis can seem difficult but you can simplify this by measuring components of HR that impact the bottom-line.
Below are a few examples, and these are just the start. We've got a lot more where these came from if you're interested:
- Revenue per full time equivalent (FTE)
- Earnings before investments and taxes (EBIT) per FTE
- Turnover rate
- Cost of turnover/cost of turnover per employee
- Return on investment (ROI)
As you discover the metrics above and others, you can analyze and compare the data against your current way of operating and make changes to your current strategy. Take the findings and share them with your managers and ask them which they believe are most important and why. In this conversation, tie the business goals to their positions and visualize the impact their teams are making to those metrics.
It's time to disprove the part of our study with HCI that states, “Overall, only 1 in 5 (22%) strongly agree that HR practitioners and people managers work well together at their organization. However, those with higher scores on HCI’s index for high-performing organizations (HPOs), are significantly more likely to view these partnerships as effective.” We can all become high performers in this area with some careful choices around the data we focus on and how we communicate it. And we don't have to do it alone — HR solutions are now getting smart enough to help share that workload.
4. Optimize your HR technology
There are several stories I could share on the importance of technology optimization. As I write this, the one that comes to mind was an HR team at a company who weren’t satisfied with their current software. They felt limited in the things they could do and weren’t as efficient as they could be. As investigated further by asking some targeted questions around what their system could or couldn't do, I found the answers weren’t always straightforward. I quickly learned the real answer — they didn’t know exactly what their technology could do.
Too often we blame technology for not doing what we need it to do when it in fact can. HR leaders often feel limited in their technology due to this knowledge gap. The Great Reset study shows that only 45 percent of respondents felt their HRIS was moderately useful and has the functionality and data that enables better conversations and decision making among HR practitioners and people managers.
In order to optimize your HR technology, make sure you fully understand your current solution’s capabilities. As you go through this process include your people managers in the discussion by asking what information they lack or need to be quicker in their decision making. That way, when you go looking for the right solution you'll be sure to find one that your organization will actually use and see value in.
Conclusion: HR can be the catalyst for strategic change
We must get above the noise. I’m not saying that the noise will ever not exist. I’m saying HR practitioners are the catalyst, the conduit that has the ability to lead success and change in your organization. To do this, my action to you is to apply the practices I’ve given above. Then use this data to communicate both upstream and downstream to leaders and managers on how they are impacting the business.
Translate the data to terms managers relate to to show them how their team has impacted the greater business goals by completing their tasks in a timely and efficient manner. Use this same data to recognize employees with your senior leadership. During this Great Reset we're all going through, HR has a huge opportunity to build relationships and collaborate to become not just more strategically aware, but a cornerstone of building strategy. If you want to explore our research on HR-business partnership in more depth and build a business case for what you need to do that, be sure to check out our full research report with HCI.