Despite the doom and gloom of the Brexit headlines, there are actually some encouraging trends in the wider economy. There has been sustained growth in the total business population, with increases of 2.2m (+64%) since 2000, for example¹, and the Institute of Economic Affairs has reported that the UK’s latest GDP figures suggest the economy is on course to expand by 0.6% in Q3 (July to September)². However marginal this gain may sound, it is interesting to note that this would be the fastest rate of growth since the final quarter of 2016.
When it comes to individual organisations, it is perhaps therefore unsurprising that so many are focused on their own – often rapid – development. This presents a number of challenges for HR teams, not least due to the ‘war on talent’ that has been widely reported within the employment landscape.
But on the flipside, this also represents a huge opportunity for the profession because, anyone within the world of Human Resources knows how crucial HR is to strategic success. The predicament is how to ensure that efforts have a demonstrable – and recognised – commercial impact on firms, as they look to their longer-term future.
Here are five key pieces of advice to therefore consider:
- Focus on the long game
As is the danger with many management discussions/scenarios, it is easy to become distracted with the operational fire fighting of the ‘here and now’, especially given the pace of change in the wider business environment.
Clarity surrounding the long-term vision of the organisation – as well as a conversation and mutual understanding of how HR fits in – is therefore imperative. Without this more forward-reaching sense of direction, it is impossible for HR to develop a strategic approach to things such as recruitment, L&D, and employee engagement and retention.
- Understand the reward landscape
In the world of customer service, it is widely understood that satisfied, retained customers are pivotal to the growth of a company. In the employment landscape the same can be said for staff. Yes, the injection of new talent is often beneficial, especially during periods of growth, but the ‘stickiness’ of existing colleagues – with all of their knowledge and intellectual property – is just as important.
As point 1 eluded to, employee engagement and retention is therefore key, and a wider understanding of reward lies at the heart of this. Truly effective reward strategies don’t need to be extremely convoluted – much relies on common sense, and for world-class businesses this type of thinking comes naturally. Yes pay has a part to play but so too does a sense of empowerment, the creation of shared values, opportunities to increase responsibility, and even the simple expression of thanks.
This needs to be understood throughout the entire management team, but HR has the chance to shape and own this agenda.
- Stop ignoring metrics
This is a sweeping statement and, thankfully, many HR teams have long focused on how to uncover meaningful metrics about their workforce. But a worrying revelation from the CIPD this summer highlighted that people-centric data is still missing from a number of corporate reports, even among FTSE 100 firms.
HR professionals need to grab this mantle, and quickly. AI is a huge topic at the moment but for many organisations there is no need to overcomplicate things – certainly not yet! The extraction of data from existing systems needs to be the priority.
An obvious starting point is to think about what data the business needs to drive decision making, then find a way to unearth it. Some example stats worth considering, including labour turnover rates, average length of service, the ‘CVs seen’ vs ‘jobs offered’ ratio, absences by department and so on.
The only word of advice is not to become so bogged down with data that it strangles decision making. It is crucial to work out what information is needed, for the specific business concerned, then go from there.
- Ensure the right team ‘make-up
An effective HR team must be agile and dynamic. Decisions need to be made quickly, with a view to monitor, measure, iterate and continuously improve as time passes. This is the only way to keep up with change and press forward. Much comes down to mindset, but the make-up of a modern HR team also matters.
Analysts, project managers, strategists and more, all have a role to play. However, if resourcing budgets are limited and prevent the hire of new people, the benefits of knowledge sharing between departments should not be overlooked.
Twenty-five years ago, I made an – admittedly obscure – suggestion that HR and marketing should merge. Many people immediately dismissed the seemingly odd idea, but the thinking was simple – the external customer climate is the barometer of success for a strategic marketing unit, and the internal customer (employee) climate reflects the progress of a strategic HR team. The combining of knowledge and ideas, especially from people with a commercial – yet differing – focus, can therefore be powerful.
- Don’t ignore the ‘outside’
Even the most reasoned and evidenced HR plan, executed by the savviest HR team, risks falling flat if extraneous factors are ignored. External opportunities and threats must therefore be factored into any strategic thinking, to ensure a robust, risk-managed approach that also leverages any potential to steal a march on growth.
I am the Founder of ESP Group, a very different employment law firm and HR consultancy business, with our own in-house legal and HR experts. The vision for our business was to deliver an exceptionally personal, yet cost-effective service that truly meets the evolving needs of modern and forward thinking HR teams and their organisations. We’ve recruited some of the very best employment lawyers to make this vision a reality.
I have over 30 years' experience in designing and building specialist service-based businesses and products for the corporate market. At the same time as developing our own fast-growing consultancy business, one of my key roles is to ensure we help busy Human Resources professionals make a real commercial difference to their organisations.
Ours is a notoriously fragmented industry, renowned for being somewhat archaic in its approach to providing customer-focussed, innovative, straight-talking and affordable services. But the legal services market landscape is changing and we truly believe that our integrated ABS law firm and HR consultancy business is at the forefront of this movement.