What Does “Strategic HR” Really Mean? (And Are You Doing It?)

Have you ever gone fishing? Some people love the relaxing rhythm of casting and reeling, while others are competitive about actually catching fish. People who fish to bring home dinner may become frustrated if the act of fishing doesn’t actually contribute to catching fish. HR can feel the same way. Some of us love maintaining the administrative HR tasks—making sure everyone’s getting what they need on a basic level—while others want to be involved in the executive meetings and contribute to the company’s business strategy.

We’ve heard a lot about “strategic HR” over the past several years. We all want to make a real difference in the direction our companies are headed, but many of us are overwhelmed by the concept of what it really takes to be strategic.

By definition, strategic HR is managing HR in a way that supports the company’s long-term business goals and outcomes. In essence, you go way beyond the administrative duties HR has been known for and apply HR principles and practices to overall business strategy.

The truth is, most of us are capable of operating much more strategically than we do; yet, less than 20 percent of HR pros are seen as strategic partners. Where are we spending our time? Do leaders trust us as a resource or sounding board when difficult situations arise? Is our voice heard when execs are assessing future plans? The personal strategic level we’re operating on depends on which activities we spend our time on.

Creating HR strategy begins with expanding our view from the day-to-day, or even month-to-month tasks that can so easily fill our time. It requires us to think long-term, to analyze our organization and the external environment, and to consider overall business strategy (based on the past and the present).

Typically, strategy in HR is a long-term plan. But that doesn’t mean it is set in stone. You should regularly evaluate and update your strategy to better fit the organization or other external factors.

A comprehensive strategy addresses all the key areas of HR: recruitment, compensation, learning and development, performance appraisal, and succession planning. Strategic HR provides the most value when it aligns HR activities with an organization’s goals. When HR strategy and the business are aligned, HR magic happens.

How to Create a Human Resource Strategy

Did you know that execs want HR leaders who can be better business partners?

Here are five tips for how HR professionals can earn respect in their companies’ strategic activities:

1. Get formal training on business competencies

Before you can start contributing to an HR strategy, you need to understand how strategic business works. When you have training in areas like leveraging networks, data judgment, business acumen and leadership, you can give thoughtful, helpful suggestions. 76 percent of business leaders depend on collaboration in developing their businesses’ strategies, and that’s where you can step in and show off what you know.

2. Know your company inside and out

Execs need team members who understand the business’ metrics, financial model and organizational risks. Depending on how long you’ve been at the company, you probably understand many of these things more than you realize. To dig even deeper, take some time experiencing work “on the front line” and ask questions about its history and really learn the products. A recent study (that spanned an impressive 15 years) revealed that HR professionals who understand business are uniquely capable of “linking business strategy with talent management.”