Moving from Transactional to Strategic Human Resources

By Matthew W. Burr, SHRM-SCP July 16, 2023

​One thing I have learned over the past 17 years in the HR profession is to think like a business professional. Knocking down the silo of HR and expanding your expertise in all areas of business is necessary to learn and grow throughout your career. How do we align the HR function with the mission, vision and strategic plan of the organization? Which questions should continuously be asked, and which are the answers that evolve with the needs and direction of the organization? Here are some key points to absorb as you progress in your own business acumen journey. 

  • Financial Subject Matter Expertise: Know the numbers. Every strong HR professional should have a sound understanding of the key financial statements in any organization they support. Asking the right questions and doing the right research will guide you through financial education. Budgeting is a critical component of any strong HR leader; we should know the numbers as well as any financial or accounting professional.
  • Industry Knowledge: Using tools such as SWOT analysis (strength, weaknesses, opportunities and threats), PESTLE analysis (political, economic, social, technological, legal and environmental trends), the BCG Growth Share Matrix from Boston Consulting Group and more will provide the insight necessary to provide strategic HR support to any organization. In addition, conducting a SWOT on your HR department will provide opportunities for the department to grow through goal setting. 
  • Key Performance Indicator (KPI) Alignment: We cannot improve if we are not measuring. Metrics and KPIs are great mechanisms to set strategy and communicate wins as we strive toward the goal. Ensure that any KPIs or metrics designed for the HR department align with the strategic plan in the organization. What's important for the organization? Do we align? Are we holding ourselves accountable to reach our goals and objectives?
  • Strategic Forethought: Growth only comes through pain. For any department to evolve, the status quo must change. Every HR department needs to be aligned with business strategy and provide the knowledge, skills, abilities and resources to move the organization forward. Moving from transactional to strategic will take growing pains, additional training and accountability. Hold yourself and your department to a higher standard and watch the successes happen. 

Business Acumen is one of the most important applied skills in the SHRM Body of Applied Skills and Knowledge (SHRM BASK). Without a sound understanding of the organization, we cannot embrace strategic HR solutions. Spend the time learning the mission, vision, values and strategic direction of the organization. Embrace the finances, measure your successes and drive strategic evolution in any HR department. Detail, quality and accountability will provide the strategic evolution every HR professional needs to embrace business forethought. 

Matthew W. Burr, SHRM-SCP, is owner of Burr Consulting LLC in Elmira, N.Y., and McKinney, Texas; a co-owner of Labor Love LLC; an HR consultant; an adjunct professor; and an on-call mediator and fact finder for the New York State Public Employment Relations Board.



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