According to the surveys published for Effective Human Resource Management: A Global Analysis, the results displays what HR is lacking and what action HR needs to partake to become a key strategic force in major corporations. HR will have to increase its real and perceived value, and now is the time for HR to step in and play a vital role in business strategy development and implementation.
The role of HR has evolved over time. The shift from “personnel” to “human resources” is an example of the movement to acknowledge the value of employees as an organization resource, and was an attempt to remove the stigma perpetrated with bureaucratic personnel departments. This shift was an opportunity for HR to become a strategic partner with the leaders of the business to contribute to important business decisions, advise on critical transitions and develop the value of employees.
The results of the survey show that HR is influential in terms of how staffing relates to strategy and how organizational structure relates to implementing a strategy. However, HR plays a less leading role when it comes to the development of the strategy, the consideration of strategic options and other strategy areas, including mergers and acquisitions.
In order for HR executives to reshape its development strategy, they must first understand the business strategy and how it relates to organizational capabilities and core competencies. Then, they must comprehend how it is pivotal for organization design decisions. Planning and executing the strategic direction of the organization requires developing and assessing the organization’s human capital and creating the organizational capabilities required to steer the business in that direction. HR Executives must use their knowledge to help the team set its strategic direction and develop its business plan in ways that are consistent with its talent.
There are multiple HR practices and programs that are associated with a stronger strategic role for HR, here are some to name a few:
- The use of information technology
- Focusing on HR talent development
- Having an HR strategy that is integrated with the business strategy
- Having an HR staff with technical, organizational dynamics, business partner, and metrics skills
- Using computer systems for training and development
To conclude, the role of HR is changing, and it is evident that in order for HR to engage in the business strategy, they must have high levels of business expertise and the skills in HR. It also requires the proper information technology to produce relevant analytics and metrics, a computer system implemented for training and development, and organization design that link HR managers to business units. Integrating an HR strategy into the business strategy will increase the real and perceived value of HR.