June 15, 2022

3 steps to strategic HR, part 1

As an HR leader, you face constant challenges — from talent shortages to change management and more. On top of that, you may feel like you’re still fighting for a seat at the table, fighting to prove HR’s strategic value to the rest of the organization.

Positioning your HR team to be perceived strategically — and to perform strategically — starts with understanding the connection between employee engagement and the success of your organization.

According to a Gallup survey, companies with high employee engagement experience …

  • 23% higher profitability
  • 10% higher customer loyalty
  • 66% higher employee wellbeing than those with low employee engagement.

The connection between employee engagement and business outcomes is undeniable. But how can you help your company achieve higher engagement? In part one of our three-part blog series “3 steps to strategic HR,” find out the first step you can take today.

Step 1: Ground HR strategy on an understanding of the business.

While HR may be seen as “people management,” it goes beyond simply recruiting and retaining talent. HR must have a solid understanding of everything related to the business, from the company’s needs and purpose to its products, competitors, and industry.

HR leaders who have experience in other business functions are almost twice as likely to possess a comprehensive understanding of business priorities and strategy, a McKinsey study found. When possible, have your HR team spend time with other departments to better understand their day-to-day challenges. This level of insight will also help you identify the roles critical to your organization’s performance and create succession strategies that ensure teams aren’t left scrambling when an employee leaves.

To best support your company’s priorities and long-term goals, it’s crucial that you and your team stay informed of any mergers and acquisitions, layoffs, new product launches, or other upcoming developments. Respondents in the McKinsey study that said their company had a strategic HR team were 1.4 times more likely to report outperforming competitors and 2.5 times more likely to report effective talent management.

Strategic HR means tying HR goals to business priorities and outcomes — whether that’s expanding the customer base, increasing customer loyalty, or fueling sales and innovation. With this perspective, you can ensure the organization has the right employees it needs to reach its goals.

Stay tuned for our next blog to discover Step 2 in our series “3 steps to strategic HR.” In the meantime, find out how a BPaaS partner with robust human capital management services can help.

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