HR professionals have never been better placed to contribute to top line growth, rather than simply cutting costs and reducing overheads. But to exert this influence on business performance, HR systems have to be embedded into the organisation’s strategy. This means more than alignment.
Becoming a strategic partner requires HR professionals to fully understand the skills and drivers required for success across the whole organisation – and how to influence them.
This three-part article series explores how HR can contribute to organisational strategy, and how practitioners can get buy-in to the initiatives that will drive the people agenda forward in 2018.
Many of the larger organisations I’ve worked with use employee engagement surveys, which can be good up to a point. They essentially provide a snapshot of what’s happening at a particular moment in time, and a baseline of where improvements can be made.
But this strategy won’t help us understand HR’s impact on the people agenda. For engagement surveys to gauge how well HR is doing, they would have to ask a specific question around how employees feel their HR team supports them. This is not a question I have ever come across.
While surveys can give you an overarching view of the organisation, HR needs to dig deeper and receive direct feedback from the people they serve. Organisations with high volumes of people could use bespoke pulse surveys that link directly with people throughout company. Really, asking is the only way that you will find out.
Workforce performance is associated with the bottom line and ROI. Put simply, how is our investment in x amount of people contributing to the performance of the organisation? To work this out, HR needs to show a link between analytic data and business KPIs. It’s difficult but possible, and we can use a broader application of the engagement survey to do it.
At the Home Office, we used our engagement survey to look at different parts of the organisation that looked inherently similar – in terms of numbers of people, types of outputs and so on – to see how they differed regarding engagement. We then enquired into the business performance of those units. The research provided a clear correlation between engagement survey scores and productivity.
After measuring a number of metrics, including sickness absence rates, we identified high and low performing areas: ‘bright spots’ and ‘hot spots’. Generally the indicators of each linked to high and low business productivity respectively. Showing this difference in productivity is a good way to get buy in for the people agenda.
Once these problem areas have been identified, you must then demonstrate how you will improve the situation with the bottom line in mind. HR isn’t currently particularly mature at this, but it’s becoming an area of increasing interest to those in the field.
It’s vital that HR metrics are understood by all. Paula has given a brilliant example of how her organisation has drilled down into the consequences of ‘x or y equals …’. Practitioners need to give themselves the headspace to launch these investigations, in order for it to become common HR practice.
It comes back down to the why. Why are we counting these things? Why are we measuring? What outputs do we want to see? Tracking sickness absence is a good thing. However, if you can link it to something meaningful for employees and managers, as well as HR and the wider business, then you have something tangible. These correlations can demonstrate that small changes can make big differences.
Sickness absence is perhaps the easiest metric to link to the business imperative. Put simply, higher levels of sickness absence means less availability of people – therefore it’s a good metric to open conversations and link other measures with. Reducing sickness is also a leading factor on the wellbeing agenda, so is well placed to make people pay attention.
All metrics are business metrics, and HR needs to be confident talking about them as such. Practictioners can then bring all relevant data into something of a control panel for managers. Presented in this way, the information will give managers an overview of the current state of play. Going a step further, HR can help managers to join the dots between the data to help paint a broader picture, giving them the levers to shift that current state in different directions.
A huge opportunity for HR is to be part of that diagnostic process. To really understand that data and the connections better than the line manager so that we can help them. It is a bit like making up a prescription. “I want to solve this problem. What does my landscape currently look like? These are the levers that you might choose to pull.”
People will better understand the data and metrics if we show them how they will solve their problems, as opposed to simply putting them in front of them. While HR professionals need a step change, I am excited about the way things are going.