The term “Strategic HR” is heard a lot these days but it is not clear even to many HR managers what exactly Strategic HR is. Strategic HR is really about HR becoming an integral part of the organization’s long term business goals and going beyond the people administration and development role that HR has usually been associated with. Larger firms are now outsourcing the administrative HR elements so they can focus on the strategic part.
The acid test is how often do top organizational and line management rely on the input of HR professionals in formulating strategy? The answer is yes there is a seat for HR at the strategy table but quite honestly, few top managers will ask HR for advice in difficult strategic decisions. In fact, it would not be inaccurate to say that only 10% of HR professionals are seen as real strategic partners.
So how can HR professionals become credible as business partners? Here are some recommendations:
1. Think like a Line Manager
You need to understand the organization’s imperatives, goals, issues, financial model and key challenges, as well as the top line managers do. HR professionals have visibility of various divisions compared to the average line manager who is usually focused on just one area. So use this to your advantage.
2. Learn Business Metrics
Learn not just HR metrics but business metrics like profit, earnings per share, gross margin, return on investment and various other key ratios connected to your organizational context. Then, “connecting” these to specific HR metrics related to employee turnover, employee productivity and employee engagement indices, people development costs and so on positions you in a way that is hard to replicate.
3. Learn what Senior Business Managers Learn
Instead of attending one training after another on HR related topics or spending time in your comfort zone with other HR professionals, spend time learning business strategy, marketing, selling, finance, customer care, etc. These are the areas of key importance for the organization and the more you can study these through the lens of your business manager colleagues, the more credibility you will have as a business partner.
We are in effect talking about you being less of an HR manager with business orientation and more of a business manager with an HR focus.
MBA with Strategic HR Management Specialization details can be found here