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 businesses employment obligations, such as payroll, recruitment and exits.  With sophisticated employment laws and guidance constantly emerging, developing employee policies and practices were intrinsic to the role.


David Ulrich’s theory of the ‘three-box’ in the 1990’s changed HR forever and gone were the Personnel Departments, and 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 their name, many leaders and business owners paid lip service to HR’s new role, while secretly valuing the transactional role as the main function for 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 global economic crisisRedundancies, reorganisations and mergers have meant that the role HR has in many instances, been focussed 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 strategy, 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 ticks and they are committed to helping the business become a success because they share the vision and values of the organisation. They are able to 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 make-up 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 organisations greatest resource, and so they create opportunities to engage, motivate and inspire them.

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