How People Leaders Align HR with Business Objectives
Co-Founder & CEO
How can people leaders best communicate the value of ethical, people-centric thinking to the rest of the business? It’s a tough question. It’s all too easy for both the recruiting and People Operations groups within HR to get bogged down in their day-to-day priorities, especially at a growing company. From urgent hiring demands to remote employee engagement, the list of tasks never ends. There’s also an assumption that the business and its people start out opposed to one another in a zero-sum game where helping one requires sacrifice from the other.
Part of the job of the People Leader is to correct that assumption and show the rest of the executive team how HR supports the business. Here are examples of how some of the people leaders in Searchlight’s community approach this.
When asked in a Searchlight panel discussion how to communicate HR’s business value, Tracy Williams, Chief People & Diversity Officer at New Relic, said, “I thought that was my job! I’m a business leader with a people specialty.” She understands her own role as directing the most important and impactful resource that the business has - its people.
Jevan Soo Lenox, Chief People Officer at insitro, thinks of his team’s purpose as “Driving business impact through the lens of people and culture.” In his mind, his team’s goals are the same as the rest of the business. They just have a different means to that end.
Erin Faverty, Operating Partner at PeopleTech Partners, suggested a specific tactic to help with this: start with the “why” when faced with a major decision and maintain that focus throughout the decision-making process and when communicating the decision to the rest of the organization. This leads to better decision-making both for people teams, and the organization overall.
Another specific tactic for HR and people leaders is to speak the language of business: metrics. And not just any metrics, metrics connected to output or dollars.
Metrics like Time to Productivity, Revenue Per Employee, Lifetime Employee Value and Quality of Hire quantify the impact HR has on the business in ways that are easy for other leaders to understand. As a side benefit, they also help the various groups within HR to clarify their own priorities and understand how their activities contribute to these larger outcomes. This not only lets them assess which programs and hiring processes are most successful, but it also makes it much easier to prove that value to the rest of the executive team. In turn, this improves organizational effectiveness and ultimately leads to better business results.
Here are some research that can help you connect HR initiatives to business impact:
- Highly engaged companies experience a 23% increase in profitability.
- Organizations with strong company cultures have 72% higher employee engagement ratings than those with weak cultures.
- Investment in sales training produces a 353% ROI.
- The average cost of a bad hire is up to 30% of that new hire’s salary according to the US Department of Labor.
Some HR tasks are harder to link to business goals than others. Most HR work falls into two buckets. The first bucket is work associated with a project, such as expanding into a new market, working towards being profitable, or developing a new product. In this situation, it’s pretty straightforward to align the work with business goals: HR must ensure the organization has the right people in the right roles to accomplish the current project. This usually involves mapping out the current skills of the organization and then augmenting through hiring or training.
The second bucket holds recurring or evergreen HR functions, like employee engagement, retention or L&D. These tasks are more likely to fall out of alignment with business goals as the people doing them get caught up in the daily grind and lose sight of the bigger picture. The more indirect the relationship is, the easier it is to overlook it entirely. In these areas, HR leaders must be extra vocal about alignment to business goals (or change processes as needed to ensure alignment). For example, other executives might struggle to see how a training on giving constructive feedback helps accomplish business goals - so it’s your job to show them.