#StratBlog: HR-a-a-B (HR-as-a-Business) it’s time for HR to Run like a business.

HR-a-a-B (HR-as-a-Business) it’s time for HR to Run like a business.

As organizations shift their business models to accommodate the ever changing economic, political, competitive, and digital landscapes, the expectation is that HR is also shifting how they work. HR needs to ensure the right people infrastructure is in place to drive business outcomes.

Organizations are expecting HR to not only manage the programs to attract, engage, and retain talent, but to clearly align and articulate how HR is providing tangible business value and impact on key business metrics. However, based on a SAP study, The Future HR, we know this is a challenge. “79% Organizations consider it important for business KPIs and HR KPIs to be tightly aligned; only 30% are able to do so.”

Having the opportunity to engage in value conversations with many key HR Executive customers, it is evident that in most cases HR is focused on measuring HR operational metrics, i.e. time to fill, # of successors, etc. which are meaningful to run the HR business, but based on business feedback, these are not the metrics that matter.

HR must shift its mindset to focus on measuring its relevancy (value to the business), competitive differentiation (programs/services to attract, engage, and retain talent), and how its ability to meet the changing business demands. To achieve these expectations, HR must increase its ability to align, manage, track, and articulate metrics that matter.

Creating Metrics that matter, is focused on changing the focus and the message and on elevating the traditional HR operational measures to be meaningful and impactful to the business. Look at the example below:

Business Priority	HR Priority	HR Metric for the Business (business focused)	HR Metric for HR (operational)
Quality Service Deliver on time and quality service to our customers	Talent Management Increase people capabilities to align with and deliver customer quality and service	·       Increase customer quality and interaction effectiveness	·       Invest and optimize in training programs

Which metric do you feel is more meaningful to the business? Increase customer quality and interaction effectiveness or Invest and optimize in training programs? It’s obvious, the business is going to focus on the metrics that directly correlate and impact their priorities.

How you track and manage your results are also equally important. The cadence is often aligned to a standard monthly or quarterly business review. However, what we have found as the most impactful is to communicate the quick wins you achieve along the way. Not only do quick wins allow you to highlight your successes, but also demonstrate how you are continuously progressing toward your goals. 

To summarize, as you begin to design your future HRaaB, focus on  

• metrics that matter,  
• metrics, that are achievable,  
• always articulating your quick wins.