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Is Strategic HR Practiced? Not So Much, Survey Says

Human resource professionals recognize the importance of practicing strategic HR—applying HR practices and principles to their organization’s overall business strategy—but not many practice it, according to a recent survey.

Sixty percent of 1,030 HR and non-HR U.S. business leaders surveyed in October 2015 for software management company BambooHR said that HR spends more time performing administrative and maintenance tasks than strategic tasks. Lack of resources—especially financial and software resources—and administrative demands stopped them from practicing strategic HR, they reported.

Another hindrance: Executives who are slow to buy into the concept of strategic HR. While 85 percent of HR professionals think that practicing strategic HR is important or very important, a lower percentage of non-HR management—67 percent—share this belief. The report also found that when asked to rank ways in which HR contributes the most to strategic business activities, HR leaders and non-HR leaders saw things differently in some key areas:

  • Helping to plan the implementation of strategic business decisions. HR leaders ranked this as the most important strategic activity they could do; non-HR leaders ranked this as the fourth most important.
  • Identifying strategic business options, such as the cost and types of benefits. HR leaders ranked this as the second most-strategic thing they could do. Non-HR leaders did not identify this as a strategic HR activity.
  • Assessing the organization’s readiness to implement strategic options. HR leaders and non-HR leaders both ranked this as the third most-strategic thing HR could do.
  • Designing strategic options, such as a benefits package plan. HR leaders ranked this as the fourth most-strategic thing they could do. Significantly, non-HR leaders ranked this the most important thing HR could do.
  • Obtaining buy-in from executives. HR leaders ranked this as the fifth most-strategic thing they could do. Non-HR leaders ranked this as the second most important.
  • Analyzing and overseeing the financial and business impact of strategic business decisions. Non-HR leaders ranked this as the fifth most important strategic thing HR could do. HR leaders did not identify this as a strategic HR activity.

A Strategic Partner

Despite these findings, Laura Mazzullo, owner of East Side Staffing, a New York City-based recruitment firm focused on the placement of HR professionals, said she sees organizations desiring more-strategic HR managers who “are really an integral part of the business and a trusted advisor to senior leaders,” SHRM Online reported Jan. 28. HR managers “have made a huge shift from what may have been considered years ago as a support function, and [are] now a crucial part of the leadership team in many organizations.”

However, Edward E. Lawler III, co-author of Effective Human Resource Management: A Global Analysis (Stanford Business Books, 2012), wrote in a 2014 article in Forbes magazine that HR spends less than 15 percent of its time in strategic business practices. Yet his research “clearly shows that spending more time as a strategic business partner leads to better company performance. It is clearly the right place for organizations to position their HR function.”

An organization’s perception of HR’s value as strategic vs. operational often is affected by the organization’s size, according to Rusty Lindquist, product marketing executive at BambooHR. The BambooHR survey found that 60 percent of HR professionals spend their time on administrative and maintenance tasks, and the rest of their time on HR practices and policies.

It’s not until an organization grows that strategic activities come into play, Lindquist noted.

“When a company is in its earliest stages, its activities are entirely operational,” he said during a SHRM webcast, Why Strategic HR Is Crucial. “The bottom line is, until you can reliably pay employees, you can’t really think of much else, and in the smallest of companies, payroll is really the first true HR problem they have to solve,” he pointed out.

“Smaller organizations don’t perceive HR as a strategic investment—mostly because they don’t yet behave like one. And that’s not entirely their fault; they’re still trying to get their operational foundation set. ... As long as HR is only behaving operationally, they’ll only be seen as operational. And as long as HR is perceived as only operational, their ability to move up that value chain will end up being constrained ... and it becomes this self-fulfilling prophecy.”

The BambooHR report suggested that HR professionals can take steps to better position themselves as strategic partners by:

  • Better communicating to executives how the tasks they perform contribute to the organization’s overall business strategy.
  • Aligning their tasks with those that management views as most helpful in reaching the business goals and initiatives.
  • Using data management and automated processes to free up their time from administrative tasks, giving HR professionals time to focus on business strategy.

“Given where business is now, and where it’s headed, HR has no option except to lead,” said Henry G. “Hank” Jackson, SHRM president and CEO, during SHRM Live, SHRM’s first-ever interactive virtual event, held in December 2015. “Our job is the most critical aspect of business. Finding, developing and keeping talent—that’s our job. The stage is set for us to play a leading role in our organizations.” HR, he added, must “focus on outcomes, not activities.”

Kathy Gurchiek is the associate editor at HR News. Follow her