Fixing HR Requires Vision and Strategy

Short-term, tactical, compliance-based, and transactional. That describes the typical HR function. No wonder so many executives are disappointed in what HR delivers. The unrealized potential requires fixing HR, stat!

The fix won’t go anywhere, though, unless it’s preceded by a clear and compelling vision related to the value HR can bring to an organization. That’s why fixing HR is everybody’s responsibility. 

The Problem Is a Lack of Clarity and Purpose 

It’s been a hot topic for decades. Everyone seems to agree that HR could and should be more involved in setting the strategic direction of organizations. So why isn’t that happening in more places yet?

Another exciting idea is transforming HR to improve the employee experience and build the workplace of the future. Sounds good, but how many organizations are actually moving in this direction? 

Everyone also seems to agree that HR is underutilized, undervalued, and not living up to its promised potential. Why not? 

To answer these questions, take a closer look at the expectations you’re setting for HR in your own organization. Contrast what you’re asking from HR to what you’re wishing HR could actually do. 

1. In an unprecedented time of WFH/WFA, the Great Resignation, the Quiet Quit, and the Gig Economy, would your rather have HR continue as policy administrators who enforce uniformity and conformity OR would you have see HR focus on finding new ways to source and secure employees (even if it means becoming more flexible about those policies)?

2. At a time when attention to the employee experience and employee well-being are creating competitive advantages for some companies, can you afford for HR to continue operating in impersonal, one-size-fits-all, policy-driven transactions? 

3. Knowing the high costs related to employee turnover, would you rather see HR spend more time and money on recruiting, hiring, onboarding, training, performance management, and departures OR would you rather invest in management training that increases employee engagement and decreases turnover? 

4. With HR already stretched thin, does it make sense to limp along with antiquated processes for data entry, analytics, payroll, benefits, and recordkeeping OR would the initial costs of streamlining, automating, and upgrading technology liberate HR employees for higher-value work? 

5. How many people processes in your organization are outdated and unnecessary? What could HR stop doing altogether?  

As you’re contemplating those questions, your aim is to create clarity about what you want HR to do and how you want them to contribute strategically (not just short-term and tactically). 

An article in Forbes listed the focus areas that CEOs want to see from HR. They are:

• Improving Diversity, Equity & Inclusion

• Managing the transition to remote work without sacrificing interpersonal communication, engagement, or productivity

• Managing change to reduce burnout while also accelerating agility

• Building key competencies to prepare for the future and coming challenges

• Equipping future leaders who are technically proficient and have strong soft skills

• Sourcing talent despite the talent war

• Delivering outstanding Employee Experiences

• Identifying the skills employees will need to keep up with rapid change 

• Revamping training practices for efficient, effective and engaging knowledge transfer

• Fostering a healthy work environment and well-being for all employees

There’s only so much you can do through policy and administration if these focus areas are to be realized. Rather, these focus areas require innovation and strategic planning. That alone would necessitate a major shift for many HR functions. 

Pinpointing what’s needed from HR will enable you to create the vision for HR. Establishing a specific purpose will provide clarity. 

Who’s Responsible for Fixing HR? 

It happens over and over again (sometimes in the same company!). HR isn’t delivering what the company needs, so the senior HR manager is replaced.   

The new person is usually recruited from a larger organization with a more sophisticated HR function. Typically, the establishment and development of that function preceded the person who’s now been hired to do work they’ve never done before. Typically, this new HR leader is shocked to learn just how big the gap is between what they’re accustomed to and what they now need to fix. 

Without the background, tools, talent, or resources, it’s really too much to ask of any one person. 

Nevertheless, many an intrepid HR manager has tried! Initially, they have a little success. That’s because so many things are broken or missing that “easy wins” are possible. 

Then what? With those initial wins, expectations are even higher. The HR leader has demonstrated that change is possible, despite the glaring gaps. Now that the low hanging fruit has been picked, next-level changes will require some or all of the following:

• Support for replacing people who aren’t skilled in their HR roles.

• Budget for recruiting, hiring, training people who are better suited to those roles.

• Training and professional development for those who remain in the HR function. 

• Organization-wide changes in processes, technology, policies, and systems. 

• Training to upskill all managers in recruitment/selection, employment law, performance management, managerial effectiveness, and employee engagement.

• Analytics related to people practices, employee satisfaction, and productivity. 

• Aligning HR priorities with the company’s strategic plan.

• Selecting new vendors and partners who are better able to support changes being made.

• Earning a seat at the table and demonstrating value, strategic thinking, and business acumen.

• Getting executive-level sponsorship and partnership in key HR initiatives that serve the business and its long-term needs. 

The skills required for the bulleted-items come largely through experience. Most HR managers (even CHROs) from other organizations won’t have all these skills or all this experience. They were stewards of something that was already built, not builders of something that required starting from scratch. 

In other words, the shortcut to fixing HR is probably not “just hire someone who can do the job.” Those folks are hard to come by. The ones who have done it before may not be eager to do it again because it’s difficult and because they may prefer to continue building where they’ve made inroads. 

The person you’ve got may be just as capable as the one you’d hire. Consider an accelerated development path that includes HR education, networking, and consultant support. 

Either way, the responsibility for fixing HR is a shared one. Every member of the executive team, especially the CEO, must be involved in creating the vision and collaborating with the HR leader. Otherwise, HR will perpetually linger in its current state. 

The Missed Opportunities Are Massive  

Investing time, energy, budget and resources into fixing HR is well worth all the costs. The ROI is evident when you see peer-to-peer comparisons between companies with highly developed HR functions and those without. You’ll see the same shocking differences in company’s with highly engaged employees and those without. (Yes, there is a correlation between highly developed HR functions and highly engaged employees!)

As you scan these findings, think about what this could mean for your business.

• Companies with HR practices certified on an organizational level outperformed the stock prices of relevant indices by 51.17 per cent over five years. Those same companies showed growth rates of revenue increasing by 20.9 per cent while the relevant industries increased by 6.9 per cent in the same period. - Business Performance and the Validation of HR Best Practices, HRCI

• HR’s work contributes as much as 25% of an organization’s results, primarily through HR function’s to build business capabilities. In driving better business performance, business leaders should not ignore the impact of well-designed and delivered HR work that defines and builds critical competencies. - University of Michigan, HR Competency Study

• Employee engagement is linked to 11 performance outcomes. Companies in the 99^th percentile of engagement have nearly five times the success rate of those at the first percentile. - Gallup Q12 Meta-Analysis: The Relationship between Engagement at Work and Organizational Outcomes 

When HR employees fill their days with administrative work, the greatest missed opportunity is that they aren’t developing the capacity of the organization and its people. 

For example, in one organization with 250 employees, the 4 HRBPs spend weeks interviewing managers and then creating performance reviews for employees based on those interviews. They believe it’s the only way to deliver timely reviews because managers are “too busy” to write the reviews. Allowing this approach to continue robs employees of genuine managerial feedback, undermines the work HR would otherwise be doing, and shortchanges the management team who should be practicing the art of continual feedback and effective performance review. 

Most organizations have big swing-and-a-miss stories just like this. The ultimate cost is that people development gets lost in the shuffle. 

If you’ll develop a clarity of purpose and vision for HR, you’ll be on your way to fixing HR. Take the steps to define what HR really needs to do AND what others should do instead (+ what no longer needs to be done at all). Elevate the function to elevate the organization. 

Fixing HR is a little bit like fixing your corporate culture. It takes vision, deliberate effort, and sustained focus. HR can’t do it alone, and people from all parts of the organization need to collaborate.