Aligning HR And Business Goals
What according to you is the most important skill of an HR leader? Apart from having knowledge of industrial relations, acting as the cultural ambassador, and possessing conflict resolution skills, the latest research has indicated that the most significant skill of an HR professional is to be able to connect the strategic business goals of an organisation with its HR initiatives. So how can you achieve this alignment? Let’s take a look at a five-step process which you can use to align HR goals with Business goals.
Step 1: Comprehend the Strategic Business Goals
In order to gain a voice at the decision-making table, HR must, first of all, comprehend clearly the strategic business goals of the organisation. If these goals are not clear to all the parties that are involved in decision making, it would act as a hindrance not only for the business but it will be equally difficult for the HR to align and support those strategic goals. HR needs to ask a couple of key questions to the business stakeholders such as the CEO or the CFO and other members of the C-suite. For instance, HR should ask questions pertaining to the organisations key business KPIs, the role of HR in driving those KPIs, and the best ways to support the C-suite. The responses that you receive from the business would help you to align the HR goals such as: reducing costs, increasing productivity, and organisational level activities such as Go Green.
Step 2: Align and Formulate the HR Goals
Once you gain a proper understanding of the business goals of your organisation, you can now align and set the HR goals. If you would be doing it for the first time, you may need to make certain assumptions about what actions taken will be successful and test those assumptions in order to find out if they are correct. For instance, if the business objective is to reduce costs, the HR hypothesis can be to either decrease turnover or to increase retention. You can either reduce vendor costs or labour costs in order to align with this business objective. Similarly, if the business objective is to increase productivity, a couple of HR hypotheses can be evaluating the efficiency of the onboarding process and automate the admin work by taking help of certain software tools. Another example would be, if the organisational goal is to Go Green, the HR hypotheses would be to organise volunteer opportunities and to adopt paper conservation by opting to go paperless.
Step 3: Formulate the Action Plan
When you form a hypothesis such as you are planning to increase retention, it is a statement and not a plan of action. So, if you do not have any kind of strategy or the means to measure it, you won’t be able to truly align your HR goals with the business goals. You will also not be able to gauge if what you are doing is working for you or not. Hence you need to create specific, targeted actions which will actualize the objectives which you had set. For instance, if your HR objective is to decrease turnover or increase retention, the action plan for this would be to create and distribute employee satisfaction surveys and then utilise the data from these surveys to implement specific tactics to increase retention. Let’s say that one of your survey observations is that a lot of people are unhappy with their compensation. In such a scenario, you can have a discussion with the C-suite level executives about this pain point. On the other hand, if many people are saying that the culture needs to be improved, you can take the initiative to start a culture club to address the issue.
Similarly, in order to evaluate the efficiency of your onboarding process, you can take the following actions: You can digitalize the onboarding process by getting all the paperwork for the new hires done online and complete it before their first day at work. You can also inform the new hires of that there will be certain milestones which are structured for the first few months to track and ensure that the onboarding process is moving efficiently and quickly.
Step 4: Sell your HR Game Plan
In order to align your HR goals with the business goals, you need to sell your HR game plan that you have created with specific actions to the business leaders. Get all the C-suite executives involved and make sure that they buy your plan and feel that it truly aligns with their business goals.
Step 5: Measure Your Progress
Irrespective of the number of time you have aligned your HR goals with that of the business, it is highly significant that you measure your progress. In order to demonstrate the ways in which HR has been supporting the business goals, you need to have data to back up your claims. Let’s take a look at some examples in which you can measure your progress.
- If you had conducted employee satisfaction surveys, you can measure your progress by comparing the surveys conducted at regular intervals, in order to see if any progress has been made since the last time the employees took your survey.
- If you had digitalized the onboarding process, you can compare the time and cost of onboarding previously with the time and cost post digitalization of the process and make a note of the areas where you have been able to save.
It is not at all an overwhelming task to align business goals with HR goals if you are able to break it down into proper steps, set clear goals, and keep measuring them along the way. If this is so easy, then why are a lot of HR departments still not adopting these steps? The primary reason is that almost half of the organisations still feel that HR is neck deep with administrative tasks most of their time. So it is obvious that they never find the time to perform the crucial tasks which are necessary for carrying out this alignment. If you opt for a tool that takes care or decreases all of this paperwork in an efficient and smart manner, you will be free to take up more strategic tasks. Without HR representatives at the decision-making table, your organisation is certainly missing out on important perspectives and strategies which are significant for an organisation’s overall success.