Knowing how HR adds value is essential

You may be an HR Professional leader, or a manager relying on HR to help move your business forward.  Whichever role you play. You have likely been at some point a party to a discussion about whether HR adds value.   When discussing the value HR can bring, there is often a range of views. HR can have problems in being seen to deliver value and earn credibility.  This can be because the HR Role is often misunderstood.

For years, of course, HR was the Personnel Office. This was where they used transactional processes to underpin the business’s employment obligations, such as payroll, recruitment and exits.  With sophisticated employment laws and guidance constantly emerging, developing employee policies and practices was intrinsic to the role.


David Ulrich’s theory of the ‘three-box’ in the 1990s changed HR forever and gone were the Personnel Departments, In came Human Resources, and their role in developing strategy was established; in theory, if not in practice.  The name change held great promise of a more involved and strategic HR Department.

But old habits die hard and just because HR had changed its name, many leaders and business owners paid lip service to HR’s new role, while secretly valuing the transactional role as the main function of HR. With the change came the big question about whether HR adds value to the organisation.

Global economic crisis

One of the biggest catalysts to shape the perception of HR has been the recent years of the global economic crisis.  Redundancies, reorganisations and mergers have meant that the role of HR has in many instances, been focused on, supporting and protecting an organisation through organisational change.

But with a faint glimmer of light at the end of the proverbial financial black tunnel, how will HR be perceived in an improved economic climate? Because variations of the shared services agenda have been embraced by businesses as a way to cut costs during the black times, will this be enough to finally remove the “transactional” label as the priority of HR for good?

Well, I believe yes it is.  Now, more than ever, HR has a real opportunity to be on the top table and bring real value, albeit in a slightly different way to that which it has secured the seat in the past, if at all.   If HR is going to seize the opportunity and make sure HR adds value, it needs to grasp and be good at the following:

Knowing how to deliver all elements of an HR service

They are great at all levels of the HR offer.  They understand how to develop people strategies, as well as pay people on time.  The policies they develop reflect the desired outcomes and culture as well as mirror the values of the company.

Understanding the organisation

They understand the dynamics of their organisation; how people relate to each other, and the dominant dynamic or culture which is in place.  If their organisation is a caring sharing one, for example, they know what the big no-nos are which might shatter the brand it has consciously or unconsciously developed.

Understanding the business goals and objectives inside out

They know how their CEO and the Board tick and they are committed to helping the business become a success because they share the vision and values of the organisation. They can link their metrics to the overall business objectives so that the difference they make is clear.

Talking the company’s language

They make sure that the products they develop and the frameworks they set out include the right information and are in a format which is understood by everyone.  Most importantly, they know how to get them to people in the right way so they absorb them.

Understanding individuals and teams

If an HR professional does not understand the basic psychological makeup of individuals and teams then they will struggle.  Why?  HR will struggle because it is no longer tenable.  If you want to be ahead of the game, you must understand people.   It is no longer tenable to introduce one-size-fits-all processes and policies to manage, engage and enthuse people.  You need to understand the profile of your teams and individuals. This is so you can better understand how to communicate and engage them.  Great HR professionals know how people tick.  They understand how to motivate people. They get the dynamic of why some people will never be motivated unless you pivot them in a certain way.

Caring about people

They know that people are the organisation’s greatest resource, and so they create opportunities to engage, motivate and inspire them.

Delivering Services Across The Employee Lifecycle

HR experts add a myriad of value throughout the employee life-cycle and what follows is a comprehensive, but not exhaustive list.

1. Talent Acquisition and Retention Strategies

To add significant value, HR must excel in recruiting the right talent and crafting strategies that keep top performers on board. This ensures the company’s human capital aligns with its strategic goals. For instance, Google’s approach to hiring emphasizes the candidate’s ability to learn and solve problems, which has been pivotal in their success.

2. Elevating Training and Development

HR can bridge skill gaps by organizing targeted training programs. This boosts workforce capabilities, leading to heightened productivity and fostering innovation. A LinkedIn report highlighted that companies investing in employee development see 24% higher profit margins.

3. Refining Performance Management Systems

HR enhances organizational value by creating robust performance management systems. These systems clarify employee contributions and their alignment with company objectives. Adobe’s “Check-In” model exemplifies a shift towards continuous feedback, which has improved employee satisfaction.

4. Boosting Employee Engagement

HR initiatives that drive employee engagement correlate with superior job performance, reduced turnover, and heightened morale. Gallup research shows that highly engaged teams show 21% greater profitability.

5. Succession Planning for Business Continuity

Through strategic succession planning, HR ensures the seamless transition of leadership roles, protecting the company from the unexpected departure of key figures. Companies like IBM have long-standing succession planning processes that support smooth leadership transitions.

6. Cultivating a Positive Workplace Culture

HR plays a crucial role in fostering a workplace culture that attracts and retains talent, promotes collaboration, and reflects the company’s core values and objectives. Netflix’s culture of freedom and responsibility is a testament to a strong, positive workplace culture.

7. Ensuring Compliance and Risk Management

HR professionals safeguard the company against legal issues and financial penalties by ensuring compliance with labour laws and regulations. The Volkswagen emissions scandal serves as a stark reminder of the costs of non-compliance.

8. Strategic Workforce Planning

HR adds strategic value by aligning the workforce with the company’s long-term goals, ensuring readiness for future challenges. This strategic alignment is evident in how Amazon anticipates and fills workforce needs in its fulfilment centres.

9. Competitive Benefits and Compensation

Designing attractive compensation and benefits packages helps HR attract and retain talent, while ensuring pay structures are fair and motivate desired behaviors. For example, Salesforce’s commitment to equal pay has been a key factor in their high retention rates.

10. Leading Diversity and Inclusion

HR’s leadership in diversity and inclusion initiatives fosters a dynamic, innovative workplace and expands the company’s market and talent pool. McKinsey’s research indicates that diverse companies are 35% more likely to outperform their peers.

11. Efficient Conflict Resolution

HR’s mediation services resolve workplace conflicts effectively, maintaining harmony and preventing escalation. The use of professional mediators in organizations like ACAS has proven effective in resolving disputes without litigation.

12. Developing Clear Company Policies

Clear company policies from HR set expectations and procedures, contributing to order and fairness in the workplace. Google’s clear policies on data privacy set industry standards for transparency and user control.

13. Promoting Health and Safety

HR’s commitment to a safe and healthy work environment is crucial for employee well-being, reducing absenteeism, and boosting productivity. The OSHA guidelines serve as a benchmark for HR policies in various industries.

14. Implementing Employee Assistance Programs

Confidential support through EAPs can significantly improve employee well-being and job performance. The effectiveness of EAPs is highlighted by the American Psychological Association as a key resource for employee support.

15. Leveraging HR Technology

Utilizing technology, HR can improve analytics and decision-making processes, enhancing recruitment, onboarding, and employee management. The use of AI in talent acquisition is revolutionizing how companies like Unilever approach recruitment.

16. Driving Organizational Development

HR leads change management initiatives, helping companies like Apple adapt to market shifts and restructure operations efficiently.

17. Advancing Corporate Social Responsibility

HR-driven CSR initiatives can enhance the company’s public image and employee loyalty. Patagonia’s commitment to environmental causes has significantly boosted its brand loyalty and employee pride.

18. Managing Global Talent

For global businesses, HR manages the complexities of a diverse workforce, including cultural diversity and international labour laws. IBM’s global talent management strategy has been crucial in its international success.

19. Employee Recognition Programs

Recognition programs from HR reinforce behaviours that align with company goals, boosting morale and productivity. Google’s peer recognition programs have been instrumental in maintaining a motivated workforce.

20. Encouraging Work-Life Balance

Flexible work arrangements from HR lead to a more satisfied and productive workforce. The rise of remote work options has been a game-changer for companies like Twitter, promoting better work-life balance.

21. Facilitating Internal Communication

Effective communication within the organization from HR ensures that employees are informed and engaged. The internal communication strategies at Southwest Airlines are renowned for keeping employees aligned with the company’s mission.

22. Providing Legal Expertise

HR’s expertise in employment law helps the company navigate complex legal challenges and avoid litigation. The legal challenges faced by Uber emphasize the importance of HR legal expertise.

23. Streamlining Cost Management

HR adds value by optimizing the workforce and reducing labour costs without sacrificing productivity. Lean workforce strategies at companies like Toyota have set industry standards for efficiency.

24. Safeguarding Data Security and Privacy

HR is responsible for the confidentiality of employee data, preventing breaches in an age where information security is paramount. The GDPR has raised the bar for data security, impacting HR policies worldwide.

25. Promoting Sustainability Initiatives

HR’s role in sustainability encourages practices that support long-term organizational health. Interface’s mission towards sustainability has made it a leader in the industry, reflecting the value of HR in driving these initiatives.

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