HR performance-related meeting between people and HR leaders

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JUNE 2024

Leveling Up the HR Function: 6 Keys to Elevating Business and HR Performance

Tracy Cote

Contributing writer Tracy Cote is a C-suite HR executive, board member, advisor, HR thought leader and bestselling author (more below).

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As an experienced Chief Human Resources Officer (CHRO), one of the most critical aspects of my role has been guiding and empowering HR to support and drive value within the organizations we serve.

Here are a few steps business and HR leaders can take to elevate the strategic impact of their HR team on business and their HR performance by encouraging a more analytical, engaged, and technologically savvy approach.

Key 1: Be Data-Driven

The first step in leveling up HR as a leader is by cultivating a data-driven mindset. Traditionally, HR may have relied more on intuition and experience, but the modern business landscape demands a metrics-focused approach. For instance, HR can provide actionable insights that drive business decisions by creating and leveraging dashboards that showcase vital metrics of HR performance such as regular and regrettable turnover, turnover by tenure, time to fill, and candidate acceptance rate; then connecting the dots to see where there might be areas of concern to focus on. These metrics can also uncover potential issues such as demographic disparities in pay and turnover, allowing us to pinpoint where specific interventions are needed, perhaps revealing hidden biases or systemic problems within the company culture or legacy management practices.

Going outside of the HR box and comparing people metrics to business KPIs, such as customer service and sales metrics, can uncover correlations that will guide us on where to concentrate development, onboarding, and performance management efforts.

And remember, seeing or sharing the data isn’t enough—the people team must consider the context to uncover the story the data tells.

Key 2: Drive Engagement Initiatives

Engagement is another critical area where HR executives can significantly influence productivity and HR performance. Instead of relying on cumbersome surveys, adopting a model like the one developed by Gallup, which uses just 12 validated questions, can transform how a company measures and addresses engagement results. This model provides actionable insights and a framework to help managers significantly enhance their effectiveness. The results can guide targeted training and development programs that boost employee satisfaction and, ultimately, business performance.

Key 3: Leverage Technology and Automation

In today’s tech-driven world, automating routine HR tasks frees the people team to focus on more strategic initiatives. Automation can streamline training, recruiting, compensation, and engagement processes, improving business performance by making operations more efficient and responsive. Today, AI-driven tools are revolutionizing how we approach everything from talent acquisition — enhancing the speed and accuracy of resume screening — to personalized learning and development platforms that adapt to individual employee needs.

Key 4: Prioritize Curiosity and Innovation

HR leaders must remain curious and open to innovation. The willingness to abandon the “we’ve always done it this way” mindset and explore new strategies and technologies that can improve business and HR performance is essential. For example, experimenting with AI in HR, for instance leveraging AI for predictive analytics, can help us better understand workforce trends and prepare proactive solutions to potential challenges.

By fostering a culture that values curiosity and continuous improvement, HR can lead by example in the broader organization, encouraging all departments to innovate and adapt. This cultural shift is vital in maintaining a competitive edge in today’s dynamic business environment.

Key 5: Collaborate with IT

Building a solid relationship with the IT department is more crucial than ever. As HR increasingly relies on sophisticated tech solutions, from automated onboarding systems to advanced analytics platforms, having IT as a strategic partner ensures smoother implementation and management of these tools. IT’s insights into emerging technologies can help HR stay ahead of the proverbial curve, obtaining a first-mover advantage in adopting game-changing innovations. Making friends with the IT department is crucial here; they are often the early adopters of new technologies and will be HR’s strongest allies in integrating these advanced tools into the HR workflow.

Key 6: Think Like a Business Owner

To truly elevate HR’s role within an organization, HR leaders must think like business owners. This perspective is crucial for driving cost efficiency and HR performance across all people-related programs. Scrutinize each initiative through the same lens an investor would use to ask:

Is this adding value?
Is it helping our customers?
Is it supporting the bottom line?

This business-oriented approach requires a strong partnership with the CFO and the finance team. Understanding the organization’s financial nuances and constraints is imperative. This allows HR to align its strategies with both people’s goals and the company’s financial goals. This alignment is especially critical in rapid growth stages or when navigating a path to profitability. Gone are the days when HR fought with finance over budget dollars; HR must lock arms with their finance partners to make sure all people-related decisions are also good business decisions. For example:

Before rolling out a new employee benefit or development program, consider its ROI regarding employee productivity, retention, and satisfaction. Are you rolling it out because you think it’s beneficial or essential to your employee base? Is the benefit relevant?
Remember, once you giveth, it is hard to taketh away. HR leaders should prepare to present data-driven cases for their initiatives, demonstrating clear links to engagement, productivity, financial outcomes, and strategic objectives.

By collaborating closely with finance and adopting a more fiscally driven and business outcome-oriented mindset:

HR can prioritize initiatives that make sense for the employees and the organization’s financial health. This strategic partnership ensures that HR not only advocates for employee well-being and development but also champions the sustainability and growth of the business itself.
This dual focus helps secure critical stakeholders’ support, including that of your CEO and board.
It also aligns HR more closely with business outcomes, reinforcing its role as the driver of people – which should be a core component of organizational strategy.

The true magic happens when HR leaders harness data, technology, and financial savvy to measure HR performance and ultimately support and steer the business ship, without losing sight of the importance of creating an engaged and productive culture.

Imagine HR not as a department but as a state of mind that permeates the entire organization, nurturing a high-performing environment where every employee thinks and acts like a stakeholder. This shift is where the ‘aha!’ moment lies, when HR reshapes its identity to become an indispensable compass in the strategic voyage of the business, influencing every decision and every outcome because people are a business’s most important asset. Such a pivotal reimagining of HR’s role doesn’t just add value; it multiplies it, becoming the heartbeat of organizational success.