So, Just What is "Strategic HR"?

Depends on who you talk to, I think. While most everyone in business can name a few "tactical/administrative" HR tasks that don't make a company any money (benefits administration, payroll processing, worker's comp claims, COBRA administration, and other yawn-inducers), there is little consensus on what "strategic HR' means. Which is a little strange, since "strategy" is often what determines how a company differentiates itself in the marketplace and maximizes profits from that.

Making the bridge from HR Strategy to real business results can be fuzzy for business owners & executives because they're dealing with a big variable that is not always predictable: people. Fear not. I'm here to help clarify the issue, by excerpting the following article by Rob Blunt of PEO Consulting Group, Inc. (peoconsulting.com)...January 22, 2007 newsletter.

"Business definition of Strategic: Nearly every business function uses the term strategic to describe its plans, programs and initiatives...Examples of strategic business objectives include improving customer service, reducing costs, increasing market share or employee productivity.

HR definition of Strategic: A strategic approach means taking a "longer" term, "big picture" approach to HR. Being strategic means operating HR programs or initiatives with the goal of making a direct contribution toward meeting major corporate long- term objectives. Rather than focusing on internal HR “issues”, a strategic focus means addressing and solving “business” problems through the effective use of people management programs.

The primary goal of strategic HR is to increase employee productivity, corporate revenue, and profitability."

My two cents. Rob's right. Think about it. HR Tasks like talent acquistion & retention are strategic . Happy cows produce more (and better) milk, I've heard. That would also include things like your benefits strategy (offering high-quality benefits usually equals attracting better talent), performance management strategy (maximizing employee productivity), and HR compliance training strategy (not the sexiest strategy, but one that could signficiantly impact profitability....we hear of companies more frequently getting hit with employee lawsuit for wrongful termination - and the employees win because the company enforced it's HR policies inconsistently - or worse - had none at all.) These are just three of many HR strategies that a HR consulting professional or outsourcer can suggest to benefit your organization.

Unless an HR program or initiative, including outsourcing, can show how it would positively impact profitability, employee productivity and revenue, then your company could be spinning it's wheels. Not the best way to sustained growth, is it?

New Year, Old Issues

As 2007 ramps up, so are many strategic plans for executives & business owners at small-medium sized companies. These strategic plans are often visionary, designed to further the missions of their organizations. These plans also address the many issues that impact profitability, employee productivity, talent acquisition & business efficiencies.

In our world of HR, the questions often asked during strategic planning are:

• How do we find talent to increase the financial stability of the company?
• As an executive, am I, or a key person in the company, doing administrative work on a regular basis? Is there a better, more productive way?
• How does our company handle significant increases in benefits costs every year? How do we cost contain one of our largest expenses?
• How compliant are we with labor laws? We sometimes think about being sued by employees? What's our game plan in case that happens?
  

Those issues are real, and don't go away. They can be addressed, though, by engaging the expertise of consultants or HR outsourcing firms. These professionals can be retained in a multitude of areas to determine compliance, provide employee benefits, training, worker's compensation, safety & payroll services. They can even help with the liability your company has as an employer.

It's not too late to add this critical piece to your 2007 Strategic Plan.

Here's To Your Success in 2007!