HR as a Strategic Business Partner (GROUP 3)

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  • 7/27/2019 HR as a Strategic Business Partner (GROUP 3)


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    HR as a Strategic Business Partner

    HR and the Strategic Process

    Critical to HRs function as a strategic partner is their role in the strategic process. Not only is it important for HR to participate in the corporate strategic planning process to further its understanding of business needs for the upcomingyear, it is also important to align its own calendar and focus with the corporateagenda to support HRs position as a strategic partner. Key questions to ask HR to ensure they are a key player i n the organizationsstrategic process:

    1. What organizational capabilities must our organization have to gain and/or

    maintain a competitive advantage?2. What knowledge, skills and abilities do our people need to successfullyexecute our business strategy?

    3. How do we create an HR strategy that sets an agenda for how HR will helpour company succeed?

    Developing Leaders

    Reviewing performance and recognizing the potential of leaders are strategic keysto a companys future. In best -practice organizations, the ability to deliver theresults outlined in the strategic plan is balanced with an appreciation of a persons

    potential for further growth and development. A review of both these variables is aserious and regular part of the strategy process.Values and competencies are the foundation of leadership development. Best

    practice organizations begin the process of developing leaders with a foundation of key corporate values and then focus on key competencies that grow out of thevalue base and the strategic mission.

    Recruiting and Retaining Talent

    Instilling values and developing employees abilities is only one part of HRs jobof assisting capable individuals to grow and develop their talents. Recruiting andretaining talent is an important priority for best-practice companies. Best practicecompanies understand the importance of attracting and retaining top talent becauseof the belief that getting the right people on the bus is likely to lead to better employee performance and long-term business success.

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    Recruiting does not start or end with hiring. The process begins with a carefullythought through identification of what kinds of skills will be needed to execute thefirms emerging strategic goals. The process continues with a crafted on

    boarding process that then links to assessment and developmental activities. Some firms do a risk assessment to determine which critical people are mostlikely to leave the firm either because of limited internal opportunities or externaloffers that provide greater opportunities for advancement. Best practice firmsidentify from 5 to 20 percent (10 percent seems most common) of their managersas high potentials and provide them with extra opportunities for development.

    Assessing Success

    Recognizing the importance of the HR-business strategic partnership, leadership

    development, and recruitment and retention of talent can lead to companyimprovements. But how can firms measure changes in individual performance?

    Nothing reinforces strategic objectives more than measurement and ties toincentive compensation. While some common measures are used by best practicesfirms, the key assessment items vary significantly according to the strategicemphasis of a given firm. Measurements are compared historically, internally, andexternally. High performing firms want to show progress from year to year in their key performance measures. Comparing current and past scores on concepts such asreduction in turnover rates, recruiting costs per hire or employee engagementsurvey scores are common ways of determining if progress is being made. Whilethese are the foundation of a companys internal HR performance measures, manyfirms also want to see how they are doing on these measures relative to comparisonfirms. Typically, objective measures, such as costs of turnover, are balanced withinput from employee opinion surveys to assess the success of HR initiatives.

    Why make HR as Strategic Business Partner

    1. To increase productivity of the labor force and thus, profitability of theorganization

    2. Competency and talent management3. Onset of information technology and the vast amount of knowledge used in

    the course of the activities of organizations4. The changing business environment5. Effect of globalization on the business landscape
  • 7/27/2019 HR as a Strategic Business Partner (GROUP 3)


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    Human resources management enables executive leadership to strike a balance

    within the organization. Developing strategy based solely on the organizationscapabilities related to production and revenue fails to take into consideration thecompanys resources that make it possible to succeed. Human resourcesmanagement, therefore, brings a broader perspective to the boardroom table.Including human resources management as a strategic business partner enables

    better decision making because it takes into account the actual workforce thatsupports organizational success.


    The value HR management brings to strategic planning is paramount in attainingorganization-wide goals. Implementing strategic plans is nearly impossible withoutthe input of human resources and employee involvement. Recognizing the value of HR management is a critical step in developing business strategy, and it takeshuman resources managements forward -thinking principles and business acumento put those plans into action.

    Transforming HR: Becoming a Strategic Partner

    It is widely agreed that people are a company's most important asset and a sourceof competitive advantage--everything else can be replicated. This is by no means aradically new concept. If that's the case, however, why isn't the human resourcesdepartment--the traditional keeper of the people function--considered a company'smost valuable strategic function?

    In this article, we explore how HR can transform itself into a more effectiveresource for the organization, enhance its credibility, evolve into a strategic

    partner, and potentially earn a place at the table.

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    Creating Excellence in Service Delivery

    Hewitt partners with companies to develop ways to take advantage of theopportunities HR service delivery offers. Here are some success strategies thathave emerged from these partnerships:

    Design for the 80% solution

    Hewitt describes the term "80% solution" to mean that a delivery process should bedesigned to meet the needs of the majority of customers, and that outlyingsituations should be handled separately.

    Get out of the middle

    Sometimes HR's role in an organization lacks clearly defined accountability, whichmay hinder efforts to provide superior service delivery. Hewitt suggestsestablishing expectations for HR's involvement up front. Four options that candefine HR's involvement in the organization are as follows:

    1. HR maintains total control of the work, from "concept to customer.

    2. HR develops the strategy and implementation plans and manages theservice delivery process.

    3. HR designs and provides the tools that enable other professionals to do thework.

    4. HR ensures that service-level agreements are maintained.

    Organize for effective service delivery

    Many HR organizations have moved to shared services models in which there arecenters of expertise to do program design and an administrative service center tohandle service delivery across all areas of HR. Consolidating all the components of service delivery allows the organization to make better design and technologydecisions.

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    Take the cost out of service delivery

    Research shows that delivery of HR services is the largest cost incurred by the HR

    function and typically includes the use of vendors, technology expenses, andinternal people costs. Hewitt recommends that companies use HR activity-basedcosting tools to assist HR in understanding service delivery costs. To further ensurecost efficiencies, companies should also make sure the right people are focused onthe right activities and processes.

    Peering Into the HR Crystal Ball How will HR delivery look decades into the 21st century? Experts predict that theopportunities technology will provide HR professionals will dramatically improveand automate processes, while at the same time, streamline delivery services. Hereare other predictions:

    1. As the workplace embraces more aspects of technology, employees'experiences will become more enhanced as well.

    2. It's believed that an increasing number of routine HR tasks will beoutsourced.

    3. The concept of "total HR outsourcing" will continue to gain traction and become a more common approach to improving efficiency and accuracy toreduce costs.

    Understand your direction.

    Formulate a clearly defined HR strategy and tactical plan showing how HR willadd value to the business and how it will begin the transition to exceptional servicedelivery. This strategy should be shared with business leaders and key HR leadersto gain their support, to illustrate what various stakeholders and process ownerscan expect, and to clarify their role in implementing the strategy.

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    Understand your customers.

    Strive to fully understand clients' business issues and how HR service delivery -directly or indirectly - can help managers and employees better contribute to

    business success .

    Provide HR leadership.

    Urge internal HR leaders to provide direction, improve operational efficiency and

    effectiveness, and empower HR staff to collectively make decisions for the overallgood of the enterprise.

    Get the processes right.

    Evaluate current administrative processes against this context: Do they add valueto the business? Can they be reduced or combined? Can technology help save timeand money? Can they be done better and more efficiently outside of theorganization? If outsourcing is appropriate, what role does HR want to play in that


    Recognize it's a mind-set.

    HR professionals may need some time to embrace this revolutionary way of thinking about HR service delivery. Once these new strategies are in place,however, HR will be better equipped to cut costs and elevate the level of service toits internal customers.

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    HR expertise highly valued as strategic business partner

    1. The role of the Human Resources Department is no longer limited torecruitment, incentives and people management.

    2. 97.5 percent of companies in the country still dont have an HR department.Most of these companies are small and medium scale enterprises whereowners assume the role of recruiting people. They will remain small if theydont leverage on their people through HR.

    3. The new role of HR is that of strategic adviser, the talent architect of anorganization, counselor, confidant and coach of all employees including toplevel managers, a lea der of a companys HR functions and the liaison to the

    board.4. HR having a seat in the boardroom is a must. It is the HR wing who takes

    care of recruitment and head hunting as well as reinforcing and cultivatingthe culture in a company.

    5. Restriction of growth is not because of lack of capital but because of lack of the right people. HR is very important to grow in business.

    6. HR is the heart and hand of the organization. To succeed in business, it isalso wise to put a little more of the heart (HR) in the head (board of directors).

    7. For HR to be a more respected and credible unit in the company, and earna board seat, the HR practitioners should also think more about the business,how the company is earning and how his department can help achieve thesegoals.

    8. HR should have broad experience, understand multiracial issues, speak likea CEO, demonstrate analytical and numerical skills and live the values of theorganization.

    9. organization should engage HR in all their operations because people are thereal asset especially for those companies that are in the customer service


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    Translating Business Strategy Into Action

    You make HR as strategic partner when and if HR spend more time in theorganization's planning, design and development. Your organization does this inorder to achieve its mission and objectives.

    HR must become part of the business team, involved in planning at the highestlevel.

    Changes in HR management are inevitable. HR Managers and HR professionalsare in the strategic position in providing the leadership in change management.

    However, HR Managers are not without challenges. Enhance the position of HR asstrategic partner by ensuring that teamwork exists in your organization.

    The Human Resource Manager is the key person in ensuring that people play astrategic role in the organization.

    In activities carried out by the HR department, working in cooperation with eachother and every member of the workforce is essential. This can help your organization to succeed in achieving its plans.



    The business partner model relieves pressure from management to hone employee job skills for efficiency and productivity, as well as identifying, developing andgrooming key employees for advancement. Human resource personnel are alsoresponsible for analyzing employee review data. This allows HR personnel torecognize strengths, which they may then further develop to place employees moreeffectively, and weaknesses, which they may correct with further job skill trainingor disciplinary action.

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    If the HR department is already overworked with everyday employee relation

    issues, there may not be adequate time and personnel to devote to partnering withthe business for additional functions. The business partner model requires HR to beinvolved in almost every aspect of the business, including production statistics,financial status and sales projections. Management buy-in may also be a challenge,as the traditional role of human resources is extended to that of an overseer of theentire business in the business-partner model.


    In theory, the HR business partner model is designed to positively impact the business on all levels over time. By being involved in the recruiting process, HR isable to more carefully screen and choose individuals best suited for the jobs. In thetraining and development process, HR is able to pinpoint which employees need

    particular training and ensure that it is carried out. In knowing the...


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