3 Business-Critical Reasons to Invest in Strategic HR
The concept of “being strategic” has become a bit watered down in the business world over the last few years. The phrase is often overused and misinterpreted. So when you truly want to take a more strategic approach (and have your efforts taken seriously), it’s important to define and demonstrate precisely what that means.
If you Google synonyms for the word “strategy,” you’ll see things like “master plan,” “grand design,” and “blueprint.” When it comes to strategic human resources, these terms can help put things into perspective. Your strategic HR plan is like the blueprint for supporting your company’s long-term business goals. It’s your people operations master plan.
Why is strategic HR important?
In companies where HR is treated as a primarily administrative function, business goals like increasing sales, improving customer retention, and growing market share are rarely considered. With a more strategic approach, HR plays a critical role in business operations and is instrumental in moving the business forward.
However, becoming a more strategic HR team doesn’t mean the essential everyday work goes away. Open enrollment still needs to happen, candidates need to be screened, and new hires must be oriented. The difference is that with a strategic HR approach, the way these processes and procedures are done maps back to that greater organizational “master plan.”
The evolving role of the CHRO
Seventy percent of CEOs expect their CHRO to be a key player in enterprise strategy. Unfortunately, only 55% of CEOs say their CHRO meets this expectation. Sometimes this gap exists because HR leaders are struggling to keep up with the increasingly high demands of their work. In other cases, they simply aren’t being given a strategic seat at the table.
It’s a bit of a catch-22. Many business leaders don’t see HR as a strategic partner, so they won’t invest in strategic HR initiatives. But it’s hard for HR leaders to show what they’re capable of when they don’t have the resources and support to carry out a strategic plan.
3 reasons business leaders need to invest in strategic HR
At a virtual event, SHRM president and CEO Henry G. Jackson said: “Given where business is now, and where it’s headed, HR has no option except to lead. Our job is the most critical aspect of business. Finding, developing, and keeping talent — that’s our job. The stage is set for us to play a leading role in our organizations. HR must focus on outcomes, not activities.”
It’s in the best interest of executives to see the value and invest in strategic HR. When HR teams are empowered and resourced properly, they can impact the business in three critical ways:
- Improving employee engagement
- Building a high-performance culture
- Increasing revenue
These three outcomes are intrinsically linked and will influence nearly every other KPI in your business. When a workforce is more highly engaged, it is more productive and provides a better customer experience. Turnover is lower, sales are higher, and work is more efficient. When a high-performance culture is achieved, everybody wins — from employees and customers to investors and shareholders.
A strategic HR story: How Flipsnack scales a high-performance culture with 15Five
Founded in 2011, Flipsnack is an online page-flip catalog maker used by over a million people and organizations worldwide to create interactive publications.
From 2017 to 2020, Flipsnack doubled in size. To remain successful through that accelerated growth, the company needed to find a way to scale its culture and values. At the same time, they needed to deliver continuous improvements to their platform and user experience.
After investigating the various HR tools on the market, Flipsnack found 15Five to be an ideal fit for meeting their strategic goals to improve performance, engagement, and communication and align the organization around shared goals.
15Five now helps Flipsnack facilitate better communication, transparency, and agility across the company, which contributes to their innovation and growth. They’ve replaced the outdated annual performance review with the more holistic Best-Self Review in 15Five, and features like High Fives allow employees to stay connected and engaged as their teams grow.
According to Janina Moza, Marketing Manager for Flipsnack, the experience with 15Five has been “completely different” from other platforms they’ve used in the past.
“The more we use 15Five, the more we like it,” Janina said. “15Five makes employee engagement easy, regardless of the size of the company, and it helps keep us all on the same page as we grow. We’re seeing quantifiable results around engagement in our 15Five reporting, and the numbers are a great indicator that our team is actually engaged with the platform — with 15Five submission rates jumping from 25% to 70% in just the past year.”
Why is investing in strategic HR important?
According to SHRM, one study found that 60% of HR professionals spend more time on administrative and maintenance tasks than strategic tasks. Those surveyed said administrative demands and a lack of financial and software resources prevent them from practicing strategic HR.
Investing in strategic HR programs and tools can help organizations keep a finger on the pulse of productivity, reduce costly turnover, and identify opportunities for improvement across the business.
For example, measuring employee engagement can help uncover pockets of disengagement that need to be addressed before they become bigger issues. Say one department has an ineffective manager. By measuring engagement data for that team and then asking follow-up questions, people leaders can identify the problem and intervene with solutions to improve manager effectiveness.
The right HR software solutions can help scale the administrative tasks that take time away from more strategic HR work. With tools that allow HR leaders to see the bigger picture and tie actual data to business goals, they can earn their rightful place at the decision-making table.
How do we invest in human resources?
Investing in strategic HR requires leadership buy-in and financial commitment. Moving from an administrative approach to a strategic one is a transformational change and can’t happen overnight. Companies must invest in new processes and technology that enable HR teams to automate processes, scale their efforts, and make data-driven decisions.
For example, modern performance management tools can help strategic HR teams develop a more dynamic talent management cycle. And an effective HRIS platform can help them build a more connected, agile, and highly-engaged workplace for both in-office and remote employees.
Investing in these HR software solutions is critical for building a more strategic team. It requires support (both financial and moral) from the C-suite and a commitment from HR leaders to use these solutions to connect everyday work to the bigger picture.
How 15Five can support your strategic HR goals
Investment in a holistic performance management system like 15Five is an investment in your company’s future. We believe strategic HR leaders should be responsible (and can take credit) for building engaged, productive, high-performing cultures. That’s why we take a data-driven approach to employee engagement measurement and performance management.
15Five’s fully integrated, strategic HR solution is built upon trusted, evidence-based methodologies. Our human-centered platform helps organizations and teams align, communicate more openly, and operate more transparently.
With 15Five, your strategic HR team can:
- Turn employee engagement insights into business outcomes.
- Run your performance management program from end to end.
- Clarify and track top objectives for everyone in your organization.
- Transform your managers into strong, effective leaders.
- Build a high-performance culture and enable your people to thrive.
“Our executive team has been fully on board and really loving 15Five. Our managers and teams are giving that same feedback. We never get feedback like that about HR systems.” – Rebecca Covington, Organizational Development Manager, Envato