In today’s global economy there is an urgency to re-skill HR and develop high-impact HR professionals who are savvy business consultants and experts in HR practices and disciplines. With advances in technology and availability of outsourcing and shared services centers, transactional HR work can be performed more efficiently so that HR can devote time to adding value inside the business. However, getting some HR professionals out of their comfort zone (transactional work) will require more than an effort to divorce them from familiar work. They will need to expand their critical thinking skills and gain a thorough understanding of the organization’s business, its strategies, the culture of the workforce, and the required leadership competencies that will differentiate it from the competition.
ROLE OF AN EFFECTIVE STRATEGIC BUSINESS PARTNER
Progressive companies with transformed HR departments are filled with specialists who are strategic consultants and HR experts. They understand assessment, coaching, recruiting, succession planning, data analytics, I/O psychology, organization development, training, and technology. These experts are the architects of the corporate talent system and work to strategically align talent management with organizational performance. They understand workforce demographics and global culture; innovation; and strategies in recruiting, learning, social networking, and analytics. They design new models for coaching, talent mobility, and performance management specific for business success. Also, they know how the business works, makes money, and builds its competitive advantage. Business leaders and employees trust them to solve organizational performance problems and make complex human capital (HC) management decisions that are often highly uncertain and context specific.
COMPETENCIES THAT ARE NEEDED
To be valued as an effective “strategic” business partner, HR must:
- understand the business impact by asking the right questions to support business results;
- be an organizational designer who comprehends the way the business is managed and aligns customer needs, business strategy, and organizational objectives, processes, systems and structures;
- know the flow of revenue;
- work with managers in talent management, employee engagement, and diversity;
- guide executives in leadership development and succession planning;
- think and act as performance advisors to the business;
- use evidence-based workforce analytics to close gaps between talent and business strategy;
- turn HR data into business metrics linked with positive market performance for business decision making and predictions; and
- be an effective systems thinker who would know whether a business strategy can be implemented.
Also, in order to release human potential, empower leaders to challenge the status quo, imagine the future, and leverage efficiency to achieve greater effectiveness, HR must be skilled at:
- Strategic visioning and imagination;
- Proactive questioning and active listening;
- Creative problem solving;
- Agility and speed;
- Engagement and collaborations with peers from multiple cultures;
- Cross-cultural employee engagement;
- Mastery of advances in technology and analytics;
- Data-based decision making; and
- The art of storytelling.
CRITICAL ROLE OF THE CHIEF HUMAN RESOURCES OFFICER (CHRO)
While the role of CHROs once centered on stewardship for essential administrative HR functions, it is now transforming into a role of chief strategist. Today’s CHROs have multidimensional responsibilities, from regulatory compliance and corporate governance overseers to organizational strategists and enterprise business leaders. CHROs are much more involved in shaping the business strategy, not just supporting and implementing it. They possess skills and competencies that extend beyond HR, and demonstrate an understanding of the entire business. They are positioned as C-level strategic business partners who contribute to business strategy, translate enterprise strategy into global workforce requirements, forecast talent needs, address talent gaps, and orchestrate learning skills and career development. CHROs typically report to the chief executive officer or the chief operations officer, and HR directors may report to them. Since they typically direct HR functions, they play a critical role to the successful transformation of HR being an effective strategic business partner.
The CHRO must run basic HR well first before HR can help senior executives develop and reinforce the behaviors that drive business success. This means hiring, onboarding, training, payroll, labor relations, benefits, and all of the other administrative functions must be efficient, effective, and compliant. Second, the CHRO must deliver a talent view into the future and prepare the business for future skills gaps, labor market opportunities, and impacts of potential mergers and acquisitions. Third, the CHRO is the keeper of culture and must monitor the organization’s health, providing feedback and offering advice to the chief executive and the executive team when things have change. Finally, since the challenges and solutions now available in HR span the entire business and have the potential to create significant competitive advantage, the CHRO must continuously up-skill the HR team and grow their confidence as strategic business consultants. This means ensuring the HR team is skilled in the power of talent analytics, decision science, and changing technologies for business operations. In addition, it means supporting innovation and creativity so that high-impact HR tools, programs and practices are developed, tested, and implemented to ensure future business success.
In a transformed HR environment, the CHRO is the chief HR and people officer, change officer, and culture officer. CHROs are themselves tightly aligned with the business and will push for innovative HR solutions that are company-specific. They use unique programs to leverage the business’s unique culture, business strategy, workforce demographics, and people strategy. Under their leadership, HR aligns HC strategies with business strategies, develops capabilities to deliver organization informatics using HR data, focuses on workforce effectiveness, and makes talent management a real priority.