How To

How to ensure HR strategy aligns to corporate strategy


Words by Sophie Parrott | Design by Matt Bonnar

Words by Sophie Parrott


Design by Matt Bonnar

A business' HR strategy, in essence, likely works to manage an organisation’s people so they can power productive activities. In operational terms, this usually translates into owning the acquiring, developing and engaging of staff to drive success by the terms the executive demand. With such an uncertain economic outlook, this apparent alignment will be, at least to some HR leaders, even more important. As Emily Rose McRae, Director in The HR Practice at Gartner, is on the record as saying: “Given the tectonic shifts of 2020, HR leaders will have to face decisions they must be ready to make in order to set their organisations up for success.”

People teams shouldn’t operate in silo – to stop this from happening, their objectives should be embedded within corporate targets.

For HR firms that manage to deliver against what the business has set out, stats show a clear upswing in output. For example, HR functions that offer training that gives the workforce the skills it needs in order to drive commercial activities in the right way, they have 218% higher income per staff member than organisations without formalised training, according to the Association for Talent Development (ATD). Elsewhere, a report from the Recruitment & Employment Confederation (REC) found that HR teams that got the hiring right – driving better productivity – could save over £100,000 in lost business output at mid-management level. Clearly, getting the hiring right is an important facet of getting HR strategy right which can have measurable business outcomes.

As the business magnate Steve Wynn, who has created some of Las Vegas’ most notable casinos, previously said in a famous quote: “Human resources isn’t a thing we do. It’s the thing that runs our business.” While that may be true – given that HR helps drives the business through its people agenda – it is crucial that HR’s strategy goes hand-in-hand with the overarching corporate strategy to ensure that everyone is working to the same set of goals. If it doesn’t, and if people teams operate in silos, then it could have huge implications for the business. So, how can HR make sure that these two strategies are aligned? myGrapevine magazine spoke to several HR experts to find out.

The people function needs to know the ins and outs of the business...

Understand the business.

Wilson Wong, Head of Insight and Futures at the CIPD, explained that the HR function must have an acute understanding of the business to ensure alignment between the two strategies. This, he said, includes the organisation’s strengths, weaknesses and challenges, both internally and externally. “In short, the people function needs to know the ins and outs of the business. While the situation has improved in recent years, HR has often been accused of being more operational than strategic and being too distant from corporate issues. Having a detailed understanding of the business and demonstrating how HR can help a company to achieve its business goals, is one of the best ways for people functions to demonstrate its value – particularly with senior leaders,” the CIPD’s insight and futures lead told myGrapevine magazine.

Ensure HR doesn’t operate in silos

Rachel Credidio, Group People and Transformation Director at housing association Aster Group, explains that the people function plays a central role in organisational planning the overall business strategy. “People teams shouldn’t operate in silo – to stop this from happening, their objectives should be embedded within corporate targets. The people function – supported by the leadership team – also has a part to play in making sure HR’s role is perceived as a proactive one, as opposed to purely supporting with reactive issues,” Credidio adds. Drawing on her own experience at Aster Group, the people lead explains that their people team is heavily involved in the firm’s transformation journey – a concept which she said is called ‘Programme Experience’. “It aims to improve and modernise our colleague and our customer experience in tandem and underpins everything we do at a strategic level,” Credidio explains.

Symbiosis

Wong explains that an HR strategy should lay out how to manage and motivate staff members and can also be deployed to help organisation’s reach corporate goals. The CIPD expert adds: “It should also consider longer-term issues, such as the availability of skills and knowledge to match future needs. But the HR strategy should also be used to shape the business strategy – the two should be informing each other. It’s important that the two are aligned because rarely do individual HR practices drive better business performance,” he concludes.