HR’s role in driving business performance
We are living in an era of unprecedented change and uncertainty. Global political upheaval, technology-driven disruption, shifting demographics and climate change present risks, challenges and opportunities, but organisations often struggle to keep up. In this complex, uncertain business landscape, organisational survival depends upon an excellent understanding of the external environment, complete clarity of organisational purpose, strategy, and values, strong commercial acumen, continual and rapid innovation, and delivery of superb customer experiences – all delivered cost-effectively by creative, capable talent working for resilient, agile, and risk-savvy organisations. To stay relevant in today’s demanding environment, HR must build and sustain a professional function that’s commercial, close to the business, and has clear alignment between business strategy and HR plans and activities. Here, we present the findings of our sister organisations’, CRF and PARC, articulating how the HR function can contribute meaningfully to business outcomes, by presenting a set of core models to help HR professionals diagnose, plan and evaluate their activities.
1. Aligning HR with Business Strategy
We disagree with commentators who argue that there will be no role for HR ten years from now. We argue that HR should be guided by a core set of principles that provide the foundation for what HR does and how it does it. The essential elements for an effective operating model include: Analysis before action, Definition of terms, A robust underpinning theory, A sound business case, Delivery against a clear HR plan, Evidence and Evaluation. All these principles are brought together in the CRF Strategic HR Framework.
2. Rethinking Talent Management
Demographic change means organisations face a global talent crunch that will not be resolved by automation or AI. HR’s mission to get the most suitable people into key roles, to keep and motivate them, and to help them to perform to the optimum, can be a strategic differentiator. The CRF Integrated Talent Management Model sets out a systematic approach for organisations seeking to evolve their talent management practices.
3. Resourcing: A Strategic Business Enabler
Finding and attracting the talent that will enable a business to thrive in today’s competitive, global, and technology-driven landscape is a key business priority. HR’s contribution to the business will only be realised if the function takes a strategic approach to resourcing. The key elements are summarised in the CRF Strategic Resourcing Model.
4. Learning: The Foundation for Agility and Sustained Performance
The core objective of a strategic HR function should be to deliver improved organisational and individual performance. And one of the key mechanisms for delivering this improved performance is learning. The CRF Learning Matrix shows how individual, organisational, productive and generative learning interact to drive improved performance.
5. Performance Management: Creating the Context for Individual and Organisational Performance
Performance exists at both individual and organisational levels. And HR has to improve performance at both levels. PARC’s research finds that a holistic, systems-based approach to performance management is required to manage people and other resources for optimum performance, and in the process enhancing HR’s contribution to the business. The PARC Performance Management Framework provides an overview of the components of this systematic approach.
6. Strategic Workforce Analysis
Workforce analytics offers the potential for HR to become much more business-focused and data- and evidence-driven than has historically been the case in many organisations. CRF’s research report Strategic Workforce Analytics explores how organisations are using workforce analytics and how emerging tools and techniques can be successfully deployed to address workforce-related business issues, ultimately improving organisational performance.
The full interactive version of this toolkit is available here.
CRF and PARC are membership organisations, and sister businesses to Strategic Dimensions. To discuss membership please get in touch.