The Strategic Value of HR

179509445HR directors across the globe will be disappointed to hear that, commenting on the latest DDI Global Leadership Forecast, the organization’s general manager, Simon Mitchell, noted a high proportion of CEOs see HR as adding less strategic value than any other major business function. Surprising news considering talent is the currency of competitive advantage for businesses around the world, and many organizations prioritize tailored talent management solutions which feed in directly into their business strategy.

A great example of this is how the HR department is reacting to the breakdown of the traditional employment structure, caused by the increase of flexible working practices and the rise of the contingent workforce.

It was no surprise that the uncertain economic climate caused companies to re-examine their usual commitment to hiring permanent staff, while more recently, American employees have placed an increased importance on job roles with greater flexibility – 38 percent, according our Innovation Imperative research. That, combined with the fact employees are no longer being defined by the nature of their contract but by their ability to have business impact, has contributed to the gradual disintegration of the standard permanent working contract that has for so long been the core of the employer-employee relationship.

PREMIUM CONTENT: Webinar replay – Preparing for Impact – The Effects of the Affordable Care Act on Contingent Workforce Management

The HR department is integral to facilitating this shift, able to assess employees, whether permanent or contract, through their entire employment journey in order to attract and retain vital talent, align the workforce view and strengthen overall business strategy.

How, then, is HR meeting this shift head-on? Some examples of how HR is adapting to this change include:

  • Standardizing contract management across the business, and encouraging a common understanding of how and why contractors should be utilized. This will create more effective integration of contractors, who are increasingly making up a significant proportion of the workforce – by 2020, more than 40 percent of the American workforce, or 60 million people, will be freelancers, contractors and temporary workers – and promote a working culture which is indiscriminate towards the contingent workforce
  • Implementing real-time visibility of contractor costs. When managing higher volumes, transparency and careful monitoring is the only way to ensure that temporary workers are always adding value to business strategy
  • Communicating clear and measurable performance objectives to contractors and KPIs to vendors. This will help to set expectations for employer and employee alike, and if handled effectively can boost employee engagement and business performance

An effective workforce planning strategy takes time and a certain level of expertise to implement, but remains the only way to future proof businesses against an increasingly dynamic and fast-paced labor market. Failure to do so will have a detrimental impact on future business plans across the board, because after all, a company is only as good as its best people. Employees are at risk of becoming less engaged with their role, potentially seeking out more innovative companies, whilst the HR department struggles to plan the best way to use a company’s resources. In order to survive in an increasingly competitive environment, talent acquisition and management must remain a priority for the good of the wider business.

The HR department must stay proactive and continue to make decisions based upon well-informed strategy to obtain the recognition it deserves from the C-suite, whilst shaping a truly engaged and capable workforce.

MORE: Engaging the right type of contingent

 

Mitzi Jordan

Mitzi Jordan
Mitzi Jordan is the global lead for talent acquisition solutions advisory with Futurestep, a Korn/Ferry company.

Mitzi Jordan

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