There are many companies that approach and/or handle strategic human resources (HR) very, very well. Unfortunately, they don’t always establish foundational HR very well.
Sometimes you run into organizations that have a great vision and they know what they need to do in the long-run, but then their foundational HR is a mess. This sometimes happens because companies don’t understand that they need the basics in place in order to be effective when implementing a strategic HR plan.
Sometimes companies just don’t want to be bothered with handling the basics, or the foundational HR practices, that are necessary to the construction of the strategic initiatives. This includes a systematic approach to recruiting, on boarding, compensation and evaluation, which give way to the ability to develop your staff and grow the organization by developing true job competencies that will benefit both the employee and the organization.
There are also companies that treat HR as paper-pushing, focusing on file maintenance and benefit administration, but never expanding the departmental capabilities to achieve the strategic benefits of truly effective human capital management.
If you want to effectively perform strategic HR, you should have your foundational processes in place.
Defining What Strategic HR Means to Your Company
Every company has its own idea of what “strategic” is when it comes to HR. It’s usually based on how they feel about HR as a whole. I define strategic HR as the company’s ability to utilize its human capital, or its employees, to the benefit of the organization’s strategic initiatives.
For example, if your company has a strategic initiative this year to increase revenue by $20 million, the leadership will likely identify how they want to get there, such as through increased sales. Then they will identify how sales will take them there, such as entry into new markets or expanding a product base.
Instead of stopping there, if the organization were to leverage a mature HR department, it could identify the human capital drivers that will underpin these sales initiatives in the area of identifying core competencies to support the new initiatives, recruiting new staff, incenting new and existing sales staff to meet the goals and identifying total compensation packages, which roll-in staff development and foundational benefits, that will draw the industry’s best performers when recruiting and retaining staff.
As I mentioned above, there are some companies who believe HR is simply paper-pushing—that HR is there to make sure employees get paid and to make sure benefits run smoothly.
So these same companies believe strategic HR is the same thing—payroll, benefits, etc. And they don’t give strategic HR a whole lot of credit or credence. They also don’t let their HR department truly meet the potential it could have within the organization.
Then there are other companies who have a really great vision for their future and they want to focus on improving all their HR efforts—the foundational as well as the strategic.
So I think it all comes down to understanding how your company defines strategic HR.
Common Mistake
Like I mentioned above, I think the most common mistake companies make regarding strategic HR is having an understanding of what it is, but not implementing the foundations that need to be in place before the company will succeed with strategic HR.
For example, if your company wants to offer career-paths—helping employees map out where they want to go in your company—but you don’t want to spend time creating well-documented job descriptions that have full competencies included with them, then you’re probably not going to be successful with your strategic HR goals.
It’s like building a house—you can’t put on the roof before you lay the foundation.
In my next Insight, I’ll detail steps companies can take if they’re interested in using strategic HR to their advantage.