Can HR become a partner in executing business strategy?

June 18, 2020 | David Daly 5 Mins read

A new HR era

The international business landscape for multinational corporations has changed and this brings with it opportunities and challenges for several business critical functions, including the human resources department. No business function is immune to change these days, and many HR professionals are finding that the rapid level of change taking place in other business units is having a direct impact on their structure too.

An international and dispersed workforce combined with rapid scaling into new regions and territories has created a complex environment for HR teams to navigate. HR departments today consist of hubs and teams across countries and time zones where different languages, processes and systems all need to somehow merge together into a more coherent whole so that HR practices can be seen as a business enabler.

Increased demands and expectations are also a key factor as HR leadership teams are now expected to participate in the overall business strategy at a multinational. They may have previously been considered to be something of a service delivery department or even a back-office function- but it seems that such labels no longer apply today as expectations have grown significantly around what the HR department can and should be delivering.

In this article, we will examine some of the reasons why HR is expected to deliver more along with an assessment of what they need to become a key strategy partner.

HR and Business Strategy

The head of HR In today’s multinationals is a person who is in regular contact with the CEO and the CFO. HR are now invited to key strategic meetings around business strategy and the best way to execute it. They are expected to bring ideas to the table as well as a huge degree of data driven insight- this insight is needed to help leadership teams assess the viability and business sense of scaling into new regions and territories. HR leaders are also expected to provide detailed analysis on current costs when it comes to employees as well as some predictive analytics on the costs related to moving into a new country in order to exploit some market opportunity.

This is quite a lot of responsibility for HR professionals who are already burdened with significant workloads when it comes to managing day-to-day employee needs, especially at large multinationals where the workforce is spread across a number of different countries and continents.  These burdens include the day to day meeting of obligations around operational activities such as scheduling company events, dealing with external requests, stakeholder management, planning & coordination along with managing the needs of the workforce.

Getting involved in strategy (voluntarily or otherwise) represents a great opportunity for HR to have their voice heard and shape the strategic development and future actions of the company. Many HR leadership teams value the opportunity to influence strategy and business outcomes using their experience, skill sets and talent-based recruitment models that will play a massive role in the success of any company.

HR leaders may welcome the opportunity to participate in and influence the strategic direction of a company, but to do so they must be in a position to contribute. Their contribution will need to be supported by fact-based data driven insights and a global HR process that enables the delivery and sharing of important business data.

Strategic meetings involve a lot of questions which need to be answered with supporting data. There also needs to be a vision for the future so predictive analytics around costs will also play a role. HR managers need to make an assessment of the resources and business tools at their disposal and judge whether or not they are sufficient to deliver the level of data and insight they need to contribute to these crucial strategic meetings.

If a comprehensive review of resources suggests that they are not in a position to contribute to the overall strategic direction of a company, then a HR manager will be interested in what investment is available to create a level of HR transformation that advances them from being a functional, service delivery department towards becoming a strategic ally and important business partner. Resources like innovative technology and advanced reporting tools are likely to be needed in order to make this important transition.

This kind of thinking is what helps HR leaders and professionals evolve into the role of business strategy partners. The HR strategic partner role has an increased line of sight and connection to the C-suite executives, where the voice of HR can have a more influential role in the strategic planning and direction of the business. Becoming a business partner helps to create an important link between HR and the wider company- a link that leads to HR leaders advising other key influencers on strategic planning and helping them implement important initiatives which become integrated with the HR department.

Technology and HR

Most business units in a multinational today could benefit from some form of digital transformation- many have been requesting investment in this area for some time. Those who shout the loudest and make the strongest business case tend to have the most success when it comes to securing investment for a digital upgrade.

A digital transformation can be time consuming and complex, but most business units agree that the effort results in significant improvements which create stronger internal processes. Digital transformation involves the introduction of innovative technology to introduce speed and efficiency to help transform existing processes.

It is also about upskilling staff and supplying them with the necessary tools they need to do their jobs better. A transformation can also help streamline processes and introduce much needed consistency and standardization-this is particularly helpful when teams across different countries are performing similar duties but using wildly different technology and processes.

Introducing innovation such as switching to a cloud-based environment can bring immediate benefits and free up much needed time so that HR professionals have some breathing space to focus on things other than business as usual tasks. This can be the first step when it comes to empowering staff to deliver services and information that has more to do with influencing the strategic direction of a company.

A good example of this might be the delivery of global payroll cost reporting to executive leadership teams. The company might be considering scaling into a new territory and they may approach HR for some key data driven insights around the costs involved in this. Innovative tools and a good cloud- based infrastructure are needed here in order to deliver customized reporting that features up to the minute data around costs. This will enable a HR manager to discuss the costs involved in a similar country and also provide solid predictive analytics around employee workforce costs should the company scale into this new territory. Information like this enables HR to participate in strategic discussions in a valuable way supported by technology driven data insight.

The workforce of the future

Another way that HR can participate in the strategic planning of a company is by providing valuable insight and clarity around what the workforce of the future is likely to look like and what human resource management needs to be in place to best position the company to secure such a workforce.

This workforce may have advanced technology skills and come to a company with an inbuilt expectation around working with innovative technology. As technological advances grow at a rapid rate, a workforce strategy needs to be put in place so that HR can blend and combine the right mix of human capital talent and future technology. Advanced automation and new artificial intelligence technology are coming, and HR departments need to boost their knowledge on the capabilities and advantages such technology can bring to an organization. The skill sets, age profile and expectation levels of the workforce of the future is going to impact how human resources advise leadership teams to structure their departments and business models going forward.

The human resources department will be a key participant in any strategic initiatives put in place at global multinationals for the next 10 years. Some HR professionals want to be a part of this strategic HR conversation, others are simply expected to be a part of it while some feel that the current process and tools available to them make them under prepared for such conversations. They will seek out ways to digitally transform their HR department to ensure they are in a position to keep pace with any expectations placed upon them when it comes to evolving into a strategic business partner. Strategy planning and development are likely to play a key role in how HR manage and apply their resources in the coming years.

 

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