Building a Strategic and Sustainable HR Function

Businesses are coming under increasing pressure as a result of change. In a recent study performed by HCI, which gathered responses from almost 500 participants, 83% agreed with a statement to the effect that the business was always in a state of flux with strategies and priorities constantly changing. Human Resources practitioners are being asked to offer a more strategic approach to help build sustainable human resources within the organization, but at the same time, they are being asked to do so with the same or a lower budget (in 65% of cases). Increasing the complexity of the issue, almost half of the respondents (47%) did not have staff to delegate tasks to. This leads to a variety of challenges for HR practitioners who on the one hand want to be more strategic to manage human resources in a manner that is more sustainable, while on the other hand getting bogged down with paperwork, as there is no one to delegate to.

Despite the issues faced, HR practitioners are generally working towards a more strategic approach. UNB has also been working on this and has developed a Tahfeez HR Transformation Strategy. This specifically aims to move HR away from an operational (tactical) model to a more innovative, strategic approach. Likewise, some other companies have been more effective in this area than others. For example, the study found that 90% of HR practitioners saw a chance to be more strategic, but only half (51%) had figured out the next steps on this. Others (39%) reported barriers in the way of moving to a more strategic approach. The obstacle highlighted by the greatest number of respondents was a lack of resources (people and time). Perhaps of greater concern, others reported problems such as lack of input on strategic decision making, lack of leadership buy-in or empowerment and a lack of budget for professional development or technology to ease the way.

It is likely that in particular, leadership buy in may be significantly impacting on the lack of time and resources faced. It is worth considering that HR practitioners do not completely have their hands tied in this area – there are after all, plenty of figures and statistics that make a very sound business case for taking a strategic approach to HR, which could be presented in a compelling way to the leadership team to help address these areas. In UNB’s experience, clarifying the business case for such a change to leadership has been helpful. However, in general, in my career, I have found that people with a “can do” mindset are more effective at taking the steps needed to drive a strategic approach in HR because they are flexible and open to change. The people that can take this step are also those who have a deep passion for learning and development – both in themselves and others. I actively look out for this when hiring staff.

Research consistently shows that companies that have HR working on strategic activities are “more likely to report improved business and talent outcomes.” On the positive side, those that had identified ways to become more strategic were focusing on areas such as changing processes and relationships, automating paperwork tasks to free up opportunities for development, hiring more people or developing existing staff, or improving analytics and workforce planning. In my own experience I have observed this to be the case through my own experience running large HR teams. I have put in place automation in particular, and this has led to people becoming freer to undertake strategic tasks. Not only that, they have become noticeably more engaged in this process. Lately, at UNB we have embraced robotics in this regard, and I have found that leading this approach has encouraged others to be more innovative and creative in their ideas for how we can better deliver strategic human resources, rather than tactical.

Aside from this, the report highlighted a number of useful findings for HR professionals, as well as for their senior management teams to consider with regard to developing more sustainable human resources in the organization. An important finding was that companies that focused on enabling and empowering strategic HR had in more cases assigned budget increases to the people function over the past year. Another key finding was that companies that focus on building a sustainable, strategic HR function will be more resilient to handle a business environment where continual change is faced. It was shown by the report that working to integrate HR activities with business imperatives, developing strong working relationships across the organization could build greater success. Again, in adopting its Tahfeez strategy for taking a more strategic approach, UNB has been succeeding with this. Working on developing mindsets within the existing resource constraints to help develop a more strategic approach was also found to be key.

Given the very well researched and documented importance of employee engagement to organizational success as measured on a range of dimensions (profitability, productivity, customer satisfaction and retention and many others) there were some concerning findings in this report. In particular, a very large proportion of those surveyed (84%) said that they were involved in employee engagement activities to some level, but a quarter of those people did not feel that they had the skillsets or expertise to do so effectively. At UNB, focus on employee engagement has been high, with programs put in place to increase HR expertise in this regard, and this has been reaping rewards.

UNB has found moving towards a strategic HR approach to be very valuable in moving the business forward and retaining talent, and this report helps validate why this has been the case. Overall, the report is worth a read, as it offers a great number of insights, and only the main highlights have been considered here. You may wish to consider downloading it here to find out more about how you and your organization can improve the HR function.