Linking Hris to the Business Strategy

Demonstrating value is not always easy for HR

If you can demonstrate HR value, not only will this increase your credibility (for both you and the HR community) it's also a great way for HR to both measure and communicate its successes (and shortcomings).

However, despite popular acceptance and much research of the need for HR to be more business savvy and 'strategic', what these actually mean in practice is little understood and more importantly rarely applied to a high enough and consistent standard.

Being strategic is a skill (based on knowledge), a competence and a process.

Be clear what you mean by strategy

While there are many definitions of strategy, a practical one is: "the pattern or plan that integrates an organisation's major goals, policies and action sequences into a cohesive whole" (Quinn). A strategy can occur at different levels within an organisation e.g. corporate, business and function; as well as apply to different and often cross-level groupings e.g. geographical.

The purpose of a strategy is to:

Provide a roadmap to the future

Articulate an organisation's direction

Create a benchmark to assess alternatives and prioritise resources

Provide a measure of success

Create a psychological sense of purpose for employees

Measuring HR's business contribution

HR can make a positive and distinctive contribution to any organisation. What that contribution is and how it can be increased is a critical step in demonstrating the actual and potential value that HR can bring to an organisation.

In essence the HR strategy supports the people strategy which in turn is shaped by the business strategy. Where HR gets confused is believing it owns the people strategy when in fact this is the preserve of the business leaders with HR's role being one of a strategic influencer. It is actually only the HR strategy which HR can be directly measured on as this relates to those projects, processes and activities which are owned and managed by HR in support of the people strategy.

However, we recognise that HR's most significant organisational contribution occurs in the shaping of the business strategy and people strategy phases.

For us, HR is the function which best understands and represents the interests of all the people an organisation employs. Through developing an intimate partnership with the business, HR can ensure both the long-term viability of the organisation's people proposition and health of the employee brand as well as shaping appropriate HR deliverables which reinforce, embed and support the organisations objectives, vision and values.

HR's contribution to business strategy

HR has an unenviable role in supporting leaders shape the business strategy because HR professionals have unique insights which they can apply at the planning, developing and implementing stages.

During the planning phase of a business strategy, HR has access to unique data in the form of competitor knowledge (based on recruitment, compensation analysis and sharing data with fellow HR professionals in the industry and third party recruiters); insight into the overall capability of the existing workforce (based on development and training plans); it has access to all parts of the organisation and so is able to perceive the inter-relationships, strengths and weaknesses.

When supporting the business during the development phase, HR can call on its technical knowledge of change management (very often HR professionals are seen as 'change experts'. HR understands the importance of the foundations of strategy, values and culture, it has experience of how to use engagement 'levers' e.g. reward, recognition, group dynamics; finally, HR understand the regulatory, cultural and marketplace risks.

Supporting the business to implement its strategy should be where you excel most as HR is technically proficient in supporting the implementation process while as the same time differentiating between 'people' and 'HR' strategy. Without HR who would do the recruiting, developing and exiting appropriate employees?

HR's contribution to the People Strategy

Once business strategies are agreed, they need to be aligned with people activities through the people strategy. Once again, the HR community can play a key role at this stage even though it is not accountable for it. Fundamentally, HR's contribution is twofold:

Implementing its responsibilities within the people strategy (the HR strategy)

In supporting the business build the people strategy