4 key steps to creating a value-added HR organization
As a long-time HR consulting firm, when the vcfo team goes in to help HR departments with a project or issue, what we often find is a team that is stuck in the proverbial HR "weeds."Team members are often focused on HR for the sake of HR rather than thinking strategically about business needs.
Of course, part of the problem is that it’s very difficult to think strategically when you’re not invited to the leadership table for strategic discussions. And in many company cultures, this divide simply comes down to siloed departments and that “HR is overhead” attitude.
The challenge is not only for the HR team to start thinking differently about its role, but also to demonstrate to business stakeholders that the HR team can help drive business value.
The cornerstones of a value-added HR department
Let’s look at three mindset changes and focus areas that are key for making the shift to a more strategic and value-added HR department.
1.) Taking time to understand the business and culture
Many of HR departments have a “this is how you’re going to do it/this is what you have to do” mentality. In other words, rather than thinking about how to align processes and procedures strategically according to business goals, they’re more about policing the business.
The first step to creating more value and having a bigger impact on the business is taking time to get to know the business, your business partners, and the key strategic challenges the business is trying to address. This will enable for you to find the right people and come up with competitive compensation packages, training and development advice, and more. It’s all about providing good solutions and informed guidance on issues like compliance, rather than policing or telling leaders how to run their departments or the business.
The good news is that if you start to demonstrate an understanding of the business at all levels, along with attentiveness to business stakeholders’ strategic needs, you can earn a place at the leadership table.
2.) Making sure employees see a future with your company
Getting the right people in the door of your organization is one thing. But keeping them is another entirely. Not only is it important that you provide a good onboarding experience, but it’s critical that new hires and longer-term employees alike know what the future with your company holds. That means providing clear job roadmaps, along with competitive benefits packages. Remember that what HR does impacts almost every aspect of an employees’ life. Beyond their paycheck, they rely on the company to provide avenues to access good healthcare and retirement savings and so on. So it’s important to make sure that employees are taken care of, and also to help the leadership team understand how HR's activities are contributing to the company overall.
3.) Building and nurturing key relationships
HR is often involved with a variety of important decisions that affect the overall health of the company, from designing benefit packages and insurance policies and to asset valuation and much more. HR can add value in each area by building good relationships and working closely with other stakeholders or providers. For example, the department works very closely with finance to ensure that assets are valued correctly and that the company is not over or underinsured. HR should also have good partnerships with insurance brokers who are looking out for the company to ensure policies are updated and optimized for changing business needs.
4.) Facilitating communication
The HR department has to be a trusted organization that employees feel is fair and balanced, and achieving this status is a balancing act itself. Consider issues like harassment or mismanagement, for example. If employees feel that the HR department neither provides a confidential setting for sharing information about issues nor will do its due diligence to understand both sides of the coin, they may simply ignore potentially costly issues or even turn to outside counsel for help. Either way, the costs to the business could be significant.
HR can also advocate for clear communication from leadership during times of change, upheaval or struggle, when employees know something is happening and start growing nervous. Ignoring employee communication needs during times of change can cost the business in all kinds of ways, including declining productivity—at a time when productivity may be critical—and the loss of key employees.
Understand, innovate, repeat
Like any other department, HR can’t simply rest on its laurels after making big strides in program or process improvements. To continually add value and keep the company moving forward, you need to always keep an eye out for new opportunities to help employees and the company as circumstances change. It’s not necessarily an easy transition, but with the help of a good HR consulting company, and even some interim HR consulting, you can quickly make big strides.
Teresa Foltz is a Senior Human Resources Consultant for vcfo’s HR consulting practice. As one of the top human resource consulting firms in Houston, vcfo provides services such as human resources compliance, M&A due diligence and strategic HR guidance. For more information or to contact Teresa, please email her at firstname.lastname@example.org.