The Strategic HR Department

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I have been in business, running a consultancy (XONITEK) since 1985.  Besides it making me uniquely unemployable, I have had the opportunity to observe and interact with the many incarnations and varieties of Human Resource (HR) Departments at countless clients over the course of years.

Marking our calendars, today is April 10th, 2023.  And to date, I have not observed a single HR Department which I would consider “strategic”.  By this I mean being aligned to the corporate vision and being an accelerant in the achievement of that vision.  I am sure that such HR Departments exist.  Heck, I am even sure they might have existed at some of the clients I have had over the years.  It is just that I have never met any.  I would love to change that.

And I find this odd, given that “Operational Excellence” is all about the people, and HR is also supposed to be about the people; the most important assets at an organization.  I find it even more odd that the Operational Excellence programs with which I have been involved did not seek out as a partner the HR Department of the organization.  In fact, most leaders of Operational Excellence (and Continuous Improvement) seem to want to avoid HR.

Instead of being a strategic force, I find that most HR Departments are tactical; focused on compliance with the various labor laws and regulations and making sure the paperwork is all in order.  More often than not, the HR Departments I have encountered share why something can’t be done rather than collaborating to co-develop a plan on how it can be done.

This gives me cause for pause.

I am willing to give somewhat of a pass to small companies (those with less than 100 employees) when it comes to their having a robust and strategically oriented HR Department.  Such organizations should focus on compliance and paperwork because this is where the greatest day-to-day risk exists.  But they should also engage a capable consultant who can focus on the organization’s design and performance; working in partnership with the department leaders to develop workforce development and metrics.

This is not because there is a lack of need for the talent, but a lack of resources and utilization in the HR Departments if small companies.  Unless on a “hockey-stick” trajectory, small companies would (normally) not have the cash to hire such talent full-time or utilize the talent enough to keep the talent engaged; and they would move on for being bored. 

Hiring a consultant, perhaps working on a monthly retainer as an advisor (for continuity) and working on special projects, would be the best.

But let’s get back to basics…

State Of Readiness, SpaceX

What is the purpose of an HR Department?

It is the primary purpose of an HR Department to manage an organization’s most valuable asset, which is its people.  After all, the HR department is supposedly responsible for managing the recruitment, hiring, onboarding, training, development, and retention of employees.  

Of course, HR Departments also handle other employee-related issues, such as compensation and benefits administration, and employee relations.  They are responsible for creating and maintaining policies and procedures that govern employee behavior and company culture. 

And, being at least an arm’s length removed from first-hand knowledge, they become involved to a lesser extent in performance management and the safety and well-being of the employees.  Here, they have to partner with the business unit and department leadership to increase the fidelity of their knowledge.  It is hardly reasonable to expect the HR Department to determine the KPI’s and safety protocols for an area of the business to which they are not routinely exposed. 

Indeed, the HR Department and its functions play a critical role in building a strong and productive workforce that contributes to the success of the organization; but they can do so much more to drive value to the organization.   

Why are some HR Departments tactical and some strategic?

The difference between tactical and strategic human resource (HR) departments lies in their focus and priorities.  Tactical HR departments tend to focus on day-to-day HR activities, such as recruiting, onboarding, and compliance with labor laws and regulations.  Their primary goal is to ensure that HR processes and procedures are implemented efficiently and effectively and adhered-to.

On the other hand, strategic HR departments take a more long-term and proactive approach to HR management.  They focus on aligning HR strategies with the organization’s overall business objectives to drive growth and success.  Strategic HR departments prioritize initiatives that can have a significant impact on the organization, such as talent management, leadership development, and workforce planning.

The difference in focus between tactical and strategic HR departments is often influenced by the organization’s size, culture, and leadership style.  As mentioned earlier, smaller organizations with limited resources and a more reactive culture may have a more tactical HR function, while larger organizations with a focus on innovation and growth may prioritize a strategic HR function.

There are two reasons I believe are at the root cause of HR Departments being more tactical than strategic in larger organizations and they are;

  • Being tactical is easier.  It is relatively easy work to be tactical.  The efforts are largely transactional; making sure forms are filled out and filed timely and correctly, aggregating and reporting on data, developing employee policies and so on.  Engaging the employees when it comes to violations of the policies and procedures can be more challenging and stressful, but these efforts are also transactional. 
  • Being strategic is more challenging.  It requires a lot more brainpower to be creative and to design and deploy frameworks and programs where the impact might be years away.  And to be fair, this level of creativity requires time – even considerable amounts of quiet time – and it is difficult to find this time if you are always being dragged back into the minutiae of the transactional that is tactical.

Of course, the HR Department must deliver on the tactical requirements.   That paperwork isn’t going to complete itself and it is important and necessary for the effective management of an organization’s workforce.  But that does not mean it cannot also focus on the strategic by aligning with business objectives to drive growth and success.  But this requires time.

What can HR Departments do to develop the workforce?

While compliance is an essential aspect of the HR Department’s responsibilities, employee development is equally important.  By providing opportunities for employee development, HR Departments can help to increase employee engagement, job satisfaction, and retention, which can have a positive impact on the organization’s bottom line.  Therefore, HR Departments need to strike a balance between compliance and employee development to ensure that the organization is both legally compliant and supportive of employee growth and development. 

In my opinion, an organization cannot have employee development without also having employee engagement as both are essential for creating a positive and productive work environment.  And HR Departments can take several steps to increase employee engagement.  Here are some strategies:

  • Career Development Plans: HR Departments can work with managers to create individual career development plans for employees.  Such a plan can include co-developing a career path with the employee; taking into consideration where they see themselves at specific waypoints on their journey with the organization and identifying areas for where skills need to be improvement or gained and establishing goals and objectives.
  • Succession Planning: Related to career development plans, HR Departments can develop succession plans that identify and prepare employees for key leadership roles within the organization.  This ensures that the organization has a pipeline of qualified employees ready to fill critical roles as they become available.
  • Training and Development Programs: HR Departments can develop and offer education, training, and development programs that focus on enhancing employees’ skills and knowledge which will give them the opportunity to be more effective in their roles.  This can include learning sessions and courses, mentoring programs, and other upskilling opportunities.
  • Performance Management: HR Departments can implement a performance management system, in collaboration with business unit and department leadership, that provides employees with regular feedback and coaching to help them improve their performance.  This can include setting clear performance goals, providing regular performance evaluations, and rewarding employees for exceptional performance.
  • Employee Engagement Programs: HR Departments can develop and implement employee engagement programs to foster a positive work environment and improve employee morale.  This can include wellness programs, employee events, group activities, stress-management programs, health screenings, fitness classes, and so on.
  • Recognition and Rewards: HR can develop recognition and reward programs that acknowledge and appreciate employees’ efforts and achievements.  This can include employee of the month awards, bonuses, and other incentives.
  • Clear Communication: Human resource departments can ensure that communication is clear, timely, and transparent.  This includes regular feedback from managers, open communication channels, and town hall meetings, among other things.
  • Work-life Balance: HR can support work-life balance by offering flexible work arrangements, such as telecommuting, flexible schedules, and part-time work.  This can help employees manage their personal and professional responsibilities and reduce stress and burnout.
  • Involvement in Decision-making: HR can involve employees in decision-making processes, such as soliciting feedback, conducting surveys, and involving employees in strategic planning.  This can help employees feel more engaged and invested in the organization.

At the end of the day, HR Departments can increase employee engagement by – engaging.  If the HR Department can help the employee feel respected, a part of something bigger than themselves, and that they matter – not just being “head-count” – then the employee will have a sense of purpose, be more invested in their work, and drive more value to the organization in return.

How can the HR Department influence organizational design?

However, building a capable workforce really is not enough.  As they say, you need the right people on the bus.  But you need them on the right bus and in the right seats too.  To do this requires taking the time to design the organization and answer the question; “What does a ‘high-performance organization’ look like?”  Of course, the HR Department cannot do this alone, but in collaboration with senior leaders and aligned to, and supportive of, the organization’s Strategic Plan.

Certainly, if the organization does not have a strategic plan, or you must blow the dust off of it to read it, perhaps start there and create it or update it.

Otherwise, the HR Department can influence organizational design in several ways:

  • Defining job roles and responsibilities: HR can work with management to identify and define job roles and responsibilities that align with the organization’s strategic objectives.  This includes determining the necessary skills, knowledge, and experience for each role, as well as outlining the reporting structure and decision-making authority.
  • Developing organizational charts: HR can develop organizational charts that outline the structure and hierarchy of the organization, including the different departments and job roles.  This helps to clarify the reporting lines and decision-making authority within the organization.
  • Designing compensation and benefits programs: HR can design compensation and benefits programs that align with the organization’s strategic objectives and support its desired organizational design.  This includes determining appropriate salary ranges for each job role and developing incentive programs that reward desired behaviors and outcomes.
  • Talent acquisition and retention: HR can influence organizational design by identifying and attracting talent that aligns with the organization’s strategic objectives and desired organizational design.  They can also develop retention strategies to retain top performers and ensure that the organization has the necessary talent to achieve its goals.
  • Change management: HR can help to manage the change process when implementing a new organizational design.  This includes communicating the changes to employees, providing training and support, and addressing any concerns or resistance that may arise.

As mentioned, a well-trained fighting force is nothing without the right organization, proper outfitting, clarity of purpose, and understanding of the commander’s intent.  The HR Department can influence organizational design by aligning the HR Department’s practices with the organization’s strategic objectives and desired outcomes.  By developing job roles, organizational structures, compensation and benefits programs, talent acquisition and retention strategies, and change management processes that support the desired organizational design, the HR Department can help the organization achieve its goals and succeed.

How can an HR Department increase its strategic value?

So, with all of this, it is possible, even probable, for an HR Department to evolve to be of more strategic value to a company than it might currently be.  The following are a few ideas for how this might be achieved; 

  • Align HR strategies with business goals: HR departments can increase their strategic value by aligning their strategies with the company’s overall business goals.  This includes identifying the skills and competencies the organization needs to achieve its objectives and designing HR programs that support these goals.
  • Implement data-driven HR practices: HR departments can use data to identify trends and patterns in employee behavior and performance, which can help them make more informed decisions about HR programs and initiatives.
  • Develop talent management programs: HR departments can increase their strategic value by developing talent management programs that support the organization’s strategic objectives.  This includes identifying high-potential employees, developing career paths, and designing training and development programs that support employee growth.
  • Embrace technology: HR departments can increase their strategic value by embracing technology to streamline HR processes and improve efficiency.  This includes using HR analytics tools to gather and analyze data, implementing HR information systems (HRIS) to automate HR processes, and adopting artificial intelligence (AI) and machine learning (ML) to improve recruitment and retention.
  • Foster a culture of innovation: HR departments can increase their strategic value by fostering a culture of innovation within the organization.  This includes honing soft skills such as leadership, problem solving, and communication; while also encouraging employees to share ideas, implementing innovation programs, and creating a culture that supports risk-taking and experimentation.
  • Develop strategic partnerships: HR departments can increase their strategic value by developing strategic partnerships with other departments and external stakeholders.  This includes collaborating with other departments to develop cross-functional initiatives and partnering with external stakeholders to access new talent pools and resources.

Obviously and given all of this, HR Departments can increase their strategic value to a company by aligning their strategies and efforts with business goals, implementing data-driven HR practices, developing talent management programs, embracing technology, fostering a culture of innovation, and developing strategic partnerships.

Now they just must do it.

But what I have not quite figured out yet is; “Why don’t Operational Excellence (and Continuous Improvement) Programs involve HR Departments more often and more deeply than they do?”  In fact, why don’t more such programs originate in HR Departments?  After all, the key to Operational Excellence Programs is people – and people are what HR Departments are all about.

Another cause for pause…

About the Author

Joseph Paris

Paris is an international expert in the field of Operational Excellence, organizational design, strategy design and deployment, and helping companies become high-performance organizations.  His vehicles for change include being the Founder of; the XONITEK Group of Companies; the Operational Excellence Society; and the Readiness Institute.

He is a sought-after speaker and lecturer and his book, “State of Readiness” has been endorsed by senior leaders at some of the most respected companies in the world.

Click here to learn more about Joseph Paris or connect with him on LinkedIn.

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