How HR can Earn a Seat at the Table: A Data-Driven Perspective
We truly believe that a top-notch human resources department is the secret sauce behind any thriving organization. Just take a closer look at the most successful companies and best places to work - they all have one thing in common: happy employees.
Gone are the days of treating HR as a mere back-office function. CEOs have finally come to their senses and realized that investing in their people is the key to maximizing their bottom line.
Sarlaksha Ganesh, Lead Mentor - People Success, SquadStack says that “Maintaining a delicate balance is crucial in HR, both internally and externally, where people are involved. This involves ensuring that the organization is an attractive place to work, projecting a positive image to potential employees and external stakeholders, and cultivating a strong employer brand. HR should be given a seat at the table because it plays a vital role in organizational success by contributing to talent acquisition, retention, and development.”
HR is usually side-lined
Let's be real, HR is like the forgotten middle child of many companies. But we don't have to be the awkward kid at the family reunion forever. With the support of the CEO, we can step up and become a major player in driving the organisation's success.
“The HR function is critical in both startups and large organizations. When I joined this X organization, I was initially unsure of its importance, but the founders were keen on it. I was only HR, the first HR, and ended up having my hands full with People Ops and engagement, setting up projects from scratch, and even fixing small things like incorrectly rolled-out offer letters. HR plays a crucial role in ensuring smooth operations and employee satisfaction.”, says Sarlaksha Ganesh
She further mentions that “Larger companies often have a daunting ratio of one HRBP person for every 1000 employees, whereas the recommended ratio is one HR professional for every 50-80 employees. With such a disparity, it's hard to maintain a personal touch.”
HR getting a seat at the Table
HR folks deserve a seat at the table, and not just any seat - a coveted one with a great view of the action.
From a practical standpoint, HR professionals are responsible for recruiting, retaining, and developing the most valuable resource of any organization - its people. They ensure compliance with employment laws and regulations, manage benefits, and navigate employee relations issues. In short, they play a critical role in shaping the culture, productivity, and overall success of a company.
However, some may argue that HR is not a revenue-generating function and therefore, should not have a seat at the table. To that, I say - think again! A company's people are its greatest asset, and effective HR practices can contribute to the bottom line by reducing turnover, improving employee engagement, and driving innovation
Sarlaksha says - “HR deserves a seat at the table and it's crucial for HR professionals to earn it by being data-driven and thinking like business folks. Companies like Unilever have shown the importance of HR by appointing a CHRO who emphasizes the need to earn it. Being data-driven is essential, as seen in Google's People Operations, where dashboards show the ROI of investing in employee learning and development. HR professionals must present their ideas like a business case, thinking logically and showing high ROI. By doing so, they can't be refused and earn their place at the table.”
On the other hand, some HR professionals may not want a seat at the table, preferring to remain behind the scenes. But it's time to change that mindset and step up to the plate. HR leaders have the unique opportunity to influence business strategy, build partnerships across functions, and drive transformational change.
Who should you think HR should report to?
It's a question that's been debated more than pineapple on pizza. But fear not, dear reader, for I have delved deep into the world of corporate hierarchy and come up with some intriguing perspectives that will make you laugh, scratch your head, and possibly even change your mind. So sit back, grab your favourite beverage, and let's explore the wacky world of HR reporting structures!
CEO: HR can report to the CEO because they are responsible for the overall strategy and direction of the organization. This ensures that HR is aligned with the company's goals and vision, and the CEO has access to important updates and insights from HR.
CFO: HR can report to the CFO because many HR functions, such as payroll, benefits, and compensation, are closely tied to finance. Reporting to the CFO ensures that HR decisions are financially responsible and aligned with the organization's budget and financial goals.
COO: HR can report to the COO because they are responsible for the operational aspects of the organization, including human resources. Reporting to the COO ensures that HR is integrated into the company's day-to-day operations and can provide valuable insights into workforce planning, employee engagement, and productivity.
CHRO: HR can report to a Chief Human Resources Officer (CHRO) because this executive is solely focused on HR functions and has the expertise to make informed decisions related to employee development, retention, and satisfaction.
Board of Directors: HR can report to the Board of Directors because they have the oversight of the entire organization, including its workforce. This ensures that HR decisions are aligned with the organization's values and long-term vision and that the board has visibility into HR metrics and initiatives.
General Counsel: HR can report to the General Counsel because they can provide legal guidance and ensure compliance with labor laws and regulations. This is especially important in highly regulated industries or companies with a large and diverse workforce.
What's the difference between a CEO and a CFO? One thinks HR should report to them, and the other is wrong. Let's discuss
Sarlaksha - I believe that HR reporting should be to the CEO. This is because CFOs usually have a narrow view of working with numbers only, making it difficult for them to understand beyond that. While some CEOs may also struggle to understand HR functions, having a neutral reporting structure ensures that there is no bias towards the finance or people functions. It is crucial that the C-suite believes in the importance of the people function as this impacts the success of the company.
HR should report to the CEO for regular updates. If the founding team is closely knit, the reporting structure may not matter as much. HR reporting to the CFO is becoming more common due to the overlap of finance and people functions, but this can lead to contradictions. Forbes and HBR report that HR often reports to the CFO due to the importance of recruitment, payroll, and benefits to the business.
Goodbye Guesswork, Hello Data: How HR Can Use Metrics to Earn a Spot at the Table
HR professionals often dream of having a seat at the table, but let's face it, they're not always welcome with open arms. However, there's one way HR can get its foot in the door: by becoming data-driven. Yes, you heard it right! In this data-rich era, numbers can be the key to HR's success.
Sarlaksha- We analyze employee behaviour through pulse and engagement surveys, focus group discussions, and qualitative data. We track behaviour, not just quantitative data, as behaviour is the only visible aspect. Qualitative data adds value to quantitative research as it helps identify why data may prove a hypothesis wrong. For example, my research on increased leave allowances showed negative results, and in-depth discussions with people helped me understand why.
How to measure people- data better?
Speak the language of business: HR professionals should be well-versed in the language of business and familiar with financial reports, budgets, and key performance indicators. By speaking the language of business, they can demonstrate the value of HR initiatives in the context of the company's overall goals.
Align HR initiatives with business goals: HR initiatives should be aligned with the company's overall business goals. HR professionals should be able to demonstrate how their initiatives contribute to the success of the company.
Build relationships with key stakeholders: HR professionals should build strong relationships with key stakeholders in the company, including executives, managers, and employees. By building these relationships, they can gain the trust and respect of others in the company.
Use data to demonstrate impact: HR professionals should collect and analyze data to demonstrate the impact of HR initiatives on the company's bottom line. By using data, they can make a strong case for their initiatives and show their value to the company.
Be proactive and innovative: HR professionals should be proactive and innovative in their approach to HR. They should be constantly looking for new and better ways to support the company's goals and improve the employee experience.
Be confident and assertive: HR professionals should be confident and assertive when presenting their ideas to the C-suite. They should be willing to challenge assumptions and push for change when necessary.
Show leadership and strategic thinking: HR professionals should demonstrate strong leadership and strategic thinking skills. They should be able to anticipate future trends and develop plans to address them.
Create a culture of continuous learning: HR professionals should create a culture of continuous learning within the company. They should encourage employees to develop new skills and provide opportunities for professional development.
HR should become more data-driven and demonstrate how their actions in the people function impact the business. It's important to invest in initiatives with measurable returns, such as employee satisfaction surveys, and to use data to identify areas for improvement. HR professionals should be curious about the business, understand how it makes money, and identify the economic factors that generate revenue. Being excellent at employee engagement is not enough to earn a seat at the table; HR needs to use financial data and be aware of the company's profit and loss. - says Sarlaksha
Do you want to feature in one of the issues? Email janhavi.jain@springworks.in or DM @janwhyy on Twitter.
