Optimizing HR with Four Tactics That Treat It Like a Business
Strategic thinking is needed to optimize HR amid fight for talent and threats of disruption
In my long career in human resources, I have interviewed many professionals who have described their experience by detailing tasks they have performed. But few explain how those tasks aligned with the company’s strategic business goals. The failure to articulate this connection can remove a job candidate from the top of my list very quickly.
The tactics-first mentality isn’t confined to individuals. It pervades entire HR departments at organizations of every size, in every industry. According to one study, HR professionals spend 60 percent of their time on tasks. Given the grueling war for talent—and perpetual threat of disruption—facing most companies, that simply won’t do.
Instead, HR leaders must transform their departments into instruments of innovation and value creation. They need to stop focusing on tasks and instil a strategic mindset across the full spectrum of HR business functions, including recruiting, development and retention.
Essentially, HR departments need to work more like the businesses they serve.
This means setting long-term goals and viewing every task through the lens of those goals. On a high-functioning sales team, decisions are made in service of the company’s revenue goals, and the top closers best understand the products they’re selling and the customers they serve—and use that understanding to set priorities and perform tasks.
In HR, that could mean increasing labor efficiency through strategic workforce planning, improving retention by boosting employee satisfaction or upgrading internal communication by devising a plan to disseminate information quickly around the world with minor adjustments to address regional, cultural and departmental differences. It means creating the space for interviewing and hiring based on valuable skillsets rather than filling job postings out of an immediate and desperate need for headcount.
4 steps for optimizing HR like a business
To transform their departments from highly tactical organizations into strategic, value-creating powerhouses, HR leaders must do four things:
Make tough choices: Every HR leader should ask herself how each team’s daily tasks align with the company’s strategic initiatives. Tasks that aren’t aligned with strategy should be evaluated, redesigned or eliminated. That can lead to difficult choices. For example, using an automated chatbot to answer employee-benefits questions that have always been handled by staff might make sense on paper, but that change could sow fear among the team. If trimming administrative costs by 10 percent is a strategic goal, and automating responses frees the HR team to focus on higher-value work, then technology may be the most efficient and effective way to handle that.
Adopt a startup mentality: Startups brainstorm without judgment, make decisions quickly, course-correct and launch with minimum viable products and services. Let’s say an HR team in an emerging market has improved retention by automating headcount reporting and then analyzing that data to identify what will make employees stay. The startup mentality would call for assembling a smaller multifunctional team and empowering it to assess and quickly implement the new process—in a limited way—without undergoing a lengthy approval process.
Embrace iteration: If you’re making decisions at startup speed, you can’t let perfection stand in the way of progress. At Nissan, where we have hundreds of managers on international assignments at any given time, we adopted an iterative process to start gathering feedback regularly about their global mobility experiences. We learned that they were challenged with things as basic as time-zone changes and as complex as cultural norms. We moved immediately to focus on the feedback, rather than waiting to reach critical mass or to form a consensus on our team. While initial actions may not address everything, we’ll collect more feedback, identify opportunities and adjust the approach for the next employee—and so on, until we land on the best way to ensure a consistent employee experience regardless of where in the world we’re sending people.
Lead with technology: Many nonstrategic tasks—scheduling interviews, sharing resumes or, again, answering basic employee-benefit questions—can be performed with existing technology, enabling HR leaders to free their teams to focus on strategic efforts. The next frontier is artificial intelligence. With the HR Certification Institute predicting that corporate spending on AI will top $47 billion by 2020, HR leaders may have no choice but to adapt. Some companies already ask candidates to play online games that help assess strategic-thinking skills. That technology can also lessen unconscious bias in hiring. During an era where diversity is a strategic priority at most organizations, that’s a huge win.
Recognizing the need to change is one thing. Change itself is much harder. But just as the worlds of business and work are changing faster than ever, HR executives must prepare to lead by making hard decisions. The faster HR adopts a strategic mindset and a pragmatic approach to serve the business, the faster it will demonstrate its value to the company and the employees it serves.
Laura Garza is the global head of HR Transformation at Nissan Motor Corporation.