How to Become a Strategic HR Professional

Welcome to the third and final installment in our series about really pushing the limits of your HR scope. We began by establishing that for most HR Professionals, branding isn’t an issue…the problem is the lack of business focus. In last week’s post, we dispelled a few of the misconceptions surrounding HR strategy to prepare you for today’s topic: how to be strategic minded.

I know from personal experience that very few of my clients view their job as anything more than compliance and managing people. And while that’s certainly a large piece of your role as an HR Professional, it’s actually missing some substance – or at least, the substance that’s going to make an impact on your CEO and Executive Team.

You see, to truly become an individual whose decisions affect business strategy, you must first understand your business. This is where the waters get a little muddy. The reason being is that it takes motivation from a personal development standpoint. Not only that, but it also involves some risk; which, in my experience, isn’t something that is necessarily intuitive for HR, and that’s okay. The last type of personality you want managing the strict boundaries of your AAP is a risk-taker, right?

Unfortunately, if you aren’t willing to put yourself in a vulnerable position by branching out of your compliance comfort zone so that you can see the bigger vision of your company, you’re going to sacrifice huge opportunities for yourself in terms of personal and professional growth. So, before you read on I want you to ask yourself, are you really committed to self-improvement? Are you willing to do the work and put yourself out there? If not, then this next section is a moot point and reading it will be a waste of time.

There are three crucial steps to understanding Business Strategy:

Learn the Language of your Business

I asked you a few questions to think about last week, and hopefully they helped kick start your biz language exploration a little already. The key is to understand what metrics are the most valuable to your industry, and then within your organization specifically. Every key decision you make should reflect the goals of your company as a whole.

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Calculate Key Metrics

Here’s a short list of how to compute some important metrics:

  • Sales Revenue = Income – Cost of Product
  • Balance Sheet: Assets = Liabilities + Equity
  • Profit and Loss: Income (Revenue Gains) – Expenses = Net Profit

Convert Your Data into Business Data

Now that you have an idea of what your business’s bottom line is, you need to learn to compute HR’s numbers into language that makes sense to your Executives. For example: Time to Fill is a commonly thrown around HR metric, especially if you’re wanting to increase your recruiting budget. Well, as a CEO, I’m here to tell you that if one of my employees came to me requesting money for something and the only data they had to substantiate their request was that the extra budget would change the number of days it takes to accomplish the task from 55 to 28 days – that information means nothing to me. And, if your managers are anything like me, they’re constantly bouncing from one task to the next on their 1,888,336 item to-do list they have to get done in an average day. Chances are, they won’t have the time to break down how the difference in days impacts their overall revenue. You need to step up and do the math for them because it accomplishes two things: firstly, it shows initiative and secondly, it proves that you understand what’s most important to the company as whole and how to align your department’s goals with the company’s bottom line. Trust me, this is like quantum leaping for most HR folks. Taking the time to do something as simple as breaking down your wants into company needs reaps exponential rewards – both for hiring and for your professional development.

I realize that we covered some pretty complex ideas today so if you feel a little overwhelmed with how to implement a more strategic approach to HR, I have a great HRCI, free webinar that’s approved for strategic credit called Understanding Metrics. Sometimes, it helps to see these equations in detail visually. And we both have a mutual goal – to help HR analyze data from the perspective of business.

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