Does your HR policy contribute to your business strategy, or is your HR practice a bureaucratic cost centre? What is the added value of your HR and does your HR contribute to the company’s profit? Does your HR supply the services you want? What is strategic in your HRM? Do you want a strategic HRM, creating added value?
Is your HR effective and efficient: how well do you do the things you do and are you doing the right things?
The diagram for a ‘strategic’ HR policy is simple: always start from the business strategy.
Here are some critical questions you can ask yourself if you want to lift your HR policy to a strategic level. Your answers will offer insights that can make your HR more strategic and add value by contributing to your profit.
All processes must be aligned with the business strategy. This means that you have identified your HRM critical success factors (derived from your business strategy) and you have converted them in your HR processes. Let us go over the different questions per area of your HRM.
Recruitment and selection
Does the recruitment strategy match personnel planning and succession planning?
Is the recruitment strategy in line with career planning and internal job rotations?
We recommend including three selection criteria that make all the difference:
- Does the candidate have the right competencies for the vacant position?
- Does the candidate have the potential to help develop the company’s strategy?
- Does the candidate fit the organisational culture?
Usually only the first question is answered.
Pay (salary and fringe benefits)
Are the business objectives and strategy reflected in fixed and variable pay?
Do the staff understand how their personal objectives contribute to the achievement of the business objectives?
When setting up a pay strategy, we always advise you to strive towards a balance between the short and the long term and between individual and collective/team pay. This balance is determined by the business strategy and is part of employer branding.
Training and development
What are the core competencies we need today and tomorrow and how is our training strategy aligned to these?
Have the key positions been determined and have the core competencies been defined in line with the business strategy?
Training and development is a business investment and must be measured based on its ROI.
The above diagram applies perfectly to this section. The questions are therefore: what are the critical success factors, is the evaluation process aligned to this and what are the results of developing technical skills, non-technical skills and behavioural competencies?
We recommend starting from a reference person or ideal performance profile, which may be different depending on the position or department. Also define and evaluate the leadership profile for the business.
Does the internal communication contribute to your understanding of the business strategy and the aligned business organisation and culture?
Internal communication is a useful tool and if used adequately, it can help optimise the staff’s involvement. Therefore verify that internal communication is understandable, reliable, motivating in nature, etc.
Do not understand this the wrong way. Strategic HR can only work if your HR processes are in order and your administration is functioning optimally. You have to automate or outsource those processes and spend the available energy on areas offering high added value.
No matter how strategic your HRM is, it also must be people-centric: people must remain central to your HRM.