Strategic Alignment: HR and Company Business Goals working as one
When the employees of an organisation clearly understand the direction their company is taking and are excited about it, the profit margin of that company is twice as likely to exceed the median, according to research.
The onus lies with the HR department to steer a company to a new high, as it is the custodian of the organisational mission and vision. Right from creating an environment that drives employees to collectively work towards the company’s vision to develop the talent pipeline, HR has a significant impact on key business metrics.
Nowadays, around 51 per cent of companies are linking business impact to HR programs, according to a recently conducted survey. Apart from this, about 60 per cent of organisations believe in holding the HR accountable for business outcomes and not just talent acquisition. The HR department is expected to do much more than merely putting up policies in place or the right processes or systems.
Listed below is a simple process using which you can align your HR and business goals:
1. Clearly Comprehend the Organization’s Strategic Goals and Direction
It is of great importance that HR clearly understands the organisation’s strategic goals and direction so that they have a say at the decision-making table. If the HR lacks clarity on the broader organisational goals and objectives, it becomes an obstacle not just for the business, but it becomes challenging for the HR to align and support those objectives.
To gain clarity, ask the key business stakeholders such as the CEO or CFO and some other members of your C-suite the following questions:
- What is the key business KPI of the company?
- How can the HR contribute towards helping to drive those KPIs?
- What is the best manner in which the HR can support the C-suite?
Based on the responses that you receive, you will have a clear direction to increase productivity, reduce costs, and opt for go-green initiatives.
2. Articulate the HR Goals
Once you have clearly defined what success means for your organisation, it is time for you as the HR to clearly articulate the goals of your department. In case this is the first time that you are attempting to do this, you may need to make some educated guesswork about what may work for you. You would also need to test that hypothesis to figure out if you are correct. Let’s consider a few examples:
|Business Objective||HR Hypotheses/Objective|
While the above-outlined hypotheses may be a great way to align HR and business goals of your C-suite, but they are quite abstract. Thus this is the time that you need to test out some specific actions towards the same.
3. Formulate your Action Plan
When you say that you are going to increase employee retention, it is actually a statement and not your action plan towards achieving the same. If you don’t have a strategy to measure, you won’t be able to truly align your goals. Thus you should create specific targeted actions that can help you achieve your objectives. Here’s how to do this:
|Increase employee retention/decrease employee turnover||
|Evaluate the effectiveness of the employee onboarding process of your company||
4. Involve your Business Leaders in Your HR Game Plan
To truly align your HR goals with the business goals of the organisation, you have to get everyone at the same table. After creating your HR game plan by identifying specific actions to take, involve your business leaders and ensure that they are in agreement with your project and feel that your strategy aligns with the business goals.
5. Measure your Progress
After you align your HR goals with the business goals, you must ensure to measure your progress. To demonstrate to your leadership how HR is supporting the business, you must have data to back up your claims. As of now only 25 percent of the organisations have relevant HR data to furnish to necessary stakeholders in the business.
Let’s take a look at some examples of the type of measurement that can be helpful to the business stakeholders:
|Conducting employee satisfaction surveys||
|Digitize onboarding paperwork||
If you properly align your HR goals with your business goals, it won’t be an overwhelming task for you. All you need to do is to break down the process into the steps outlined above, set clear goals, and continue measuring the progress made along the way. So, what’s the reason that the majority of HR departments aren’t adopting these measures?
The reason is that half of the organisations feel that the HR department is bogged down with administrative tasks. They never have the time to perform the crucial tasks necessary to bring about this alignment of HR and business goals. If you have a single tool that cuts down this repetitive work efficiently and smartly, the HR department will be free to focus on more strategic tasks at hand. Companies need to understand that without the HR fully at the decision-making table; the organisation is missing out on strategies and perspectives that are crucial for the overall success of the business.