The function of Human Resources continues to evolve as the global business climate becomes ever more competitive and thereby immediate in terms of the urgency to deliver a firm’s goods and services to its customers – before they find someone else who will. It is widely acknowledged that the most important asset an organization has is its people – the talented professionals that provide the competitive advantage for the company. So doesn’t it follow that HR, the keepers of the most important corporate asset, should be by definition a driver of strategy for the enterprise?
“Many HR organizations are challenged by the need to strike a comfortable balance between achieving greater HR service-delivery efficiencies and maintaining the “personal touch” culture. Experts believe that HR professionals’ continuous struggle to evolve into strategic partners within their organizations often causes them to dismiss the service delivery component of HR as something tactical. The irony, of course, is that effective service delivery is considered the very criterion through which HR can become a strategic partner.” ‘Transforming HR: Becoming a Strategic Partner,’ Aon Hewitt, Human capital consultants.
“Barriers to excellent HR service delivery include HR’s penchant for building greater complexity into program design rather than convincing business leaders that they’re better served with a simpler, well-executed approach. Another obstacle to successful delivery efforts has been HR’s ineffective use of technology, that is to say, not fully understanding the benefits of existing technology or inappropriately using technology to do the wrong things faster.”
In ‘Why Is It Important for HR Management to Be a Strategic Business Partner?,‘ Ruth Mayhew of Demand Media writes, “When executive leadership recognizes the importance of human capital there’s encouragement to vote for inclusion of human resources in the C-level suite. Including human resources means full participation of the company’s essential departments in organization-wide decisions. Participation from departments throughout the organization ensures that leadership makes business decisions based on the impact those decisions will have on the organization and its workforce.”
She lists five reasons why HR should have a seat at the C-level table:
- Profitability – since human resources management gains support for enhancing employee skills and training employees to meet business demands
- Funding – for training, employee development, competitive salaries and benefits packages strengthens the company’s position and competitiveness in attracting and retaining valuable talent and expertise
- Perception – to continue to carve out its rightful position as an integral component of the business. Inclusion of HR management in strategic business planning improves employees’ and leadership’s perception of human resources.
- Balance – as developing strategy based solely on the organization’s capabilities related to production and revenue fails to take into consideration the company’s resources that make it possible to succeed
- Value – Implementing strategic plans is nearly impossible without the input of human resources, employee involvement, forward-thinking principles and business acumen – to put those plans into action
For optimal HR service delivery, many organizations have implemented shared services systems in which there are centers of expertise to do program design and an administrative service center to handle service delivery across all areas of HR. Consolidating all the components of service delivery allows the organization to make better design and technology decisions.
According to Hewitt consultant John Sanders, HR service delivery will become all the more critical over the next decade due to factors such as increasing cost pressures, global workforce and processes, demand for 24/7 information and answers, flexible and fuzzy organizational boundaries, and rising customer expectations. The potential negative effects of these external forces underscore the importance of executing HR service delivery extremely well. HR’s transformation into a strategic partner for the organization absolutely depends on it.