Agile organizations know that the strategic management of human resources is rapidly changing and critical for long-term success. Unfortunately, in many organizations, HR departments still function in a silo. Senior leaders often rely on the department only when things go wrong.
For example, in the #MeToo era, it often falls on the HR department to deal with workplace harassment. Instead, HR has a strategic role to play with shaping the entire organizational culture. When HR is given a seat at the table at the onset, an organization develops leaders and managers who walk the walk, who enforce policy regardless of the rank of the harasser, and who are committed to changing things not just for risk management but also to create an organization that attracts top talent.
Many of the current key responsibilities for HR staff focus on helping employees do the most they can and increasing engagement and satisfaction. They serve not just as recruiters and rule enforcers, but also as coaches and mentors. Most importantly, great HR leaders possess a great deal of knowledge that can make or break strategic decisions at the highest level. In a rapidly changing environment where core jobs may soon be taken over by AI, HR has a critical role to play in hiring, retention, and up-skilling strategies for the company its long-term success.
Recruitment
Social media has changed how people consider employment opportunities. If your organization isn’t handling an issue well, or if the actions of leadership don’t line up with your stated policies, not only will employees talk to friends and family, their voices are amplified by social media.
Consider the recent headlines about furniture regarding Wayfair. When employees learned the company had sold roughly $200,000 USD worth of beds and furniture for use in concentration camps or ‘migrant facilities’, over five hundred employees signed a letter requesting the company no longer do business with the Department of Health and Human Services. In the letter they also requested Wayfair establish a code of ethics to help prevent such a situation in the future. Management refused.
In response, employees staged a walkout along with a major PR campaign that spread rapidly across the internet. Within a day the Twitter account @wayfairwalkout had over 21 thousand followers, and their tweets concerning the walkout had garnered a great deal of attention. One tweet had over 38 thousand retweets and 99 thousand likes within the day. Their donation to the American Red Cross was also widely seen as an out of touch move that neglected to address the developing situation in American concentration camps that could be better supported by other organizations. Unfortunately, they did not ask their employees for input or suggestions before announcing the donation.
CNBC recently reported that since the Cambridge Analytica scandal, Facebook has struggled to recruit top talent. Graduates from top schools have begun to turn down positions with the social media giant with acceptance rates for full-time positions falling from 85% to between 35-55% as of December 2018. Similarly, software engineer acceptance rates have fallen from close to 90% in Q4 2019 to roughly 50% in G1 2019.
That kind of press is obviously bad for business, but it’s also bad for recruitment. A company with a record of bad press and poor corporate social responsibility is likely to have a tough time attracting top performers. It doesn’t matter if the recruitment culture page on their site boasts casual dress; these very public signals of culture and of leadership style will lose Wayfair sales, staff, and reputation.
In contrast, Telus, the Canadian telecom giant, makes a point of corporate social responsibility. In 2018 Telus donated $150,000,000 CAD to local charities, - “more than any other company” - according to their website. That includes donations to a campaign to end bullying, musical therapy for palliative care patients, ocean cleanups, and the launch of their TELUS Friendly Future Foundation.
Their recruitment pages rightfully boast about their charitable social innovation projects: “Since 2000, we have given over $650 million and over 1.21 million days of service to local charities. We focus on health, sustainability and education, because we know these are the foundations of thriving, vibrant communities.”
That’s the kind of pitch that could make the difference to a star player deciding between an offer at TELUS and an offer from one of their competitors.
Succession Planning
One of the most discouraging signs for an employee is to see their organization focus on hiring externally rather than promoting from within. When your employees see a marked preference for outside hires, they spend time and energy positioning themselves for jobs elsewhere. It can cause unrest, disrupt the culture and will burden peers who must help new hires learn the ropes. Of course, hiring an external star player is sometimes the right move.
However, continued investment in the development and success of internal talent is critical and overlooking internal talent for promotions can be devastating mistake. Deloitte argues that “an inability to identify and promote the best employees to higher-level positions can lead to low morale, high turnover, and, ultimately, a weak brand in the job market.” They make the case for internal mobility in order to make employees feel appreciated and reduce turnover.
You may also find that someone who rises through the ranks of your organization is more familiar with challenges at every level, and therefore better positioned to address them. Issues that may plague front-facing employees but never reach the ears of leadership can be solved quickly, improving outcomes and increasing employee satisfaction in more high-turnover positions. There’s a cascade effect of job satisfaction and retention that cannot be ignored.
And of course, the learning curve of an internal hire is significantly shorter than that of an external hire. Matthew Bidwell found outside hires take three years to perform as well as internal hires in the same job. After all, they already know a great deal about how you work, what your key challenges are, and where there’s room for growth.
The Society for Human Resource Management has surveyed several HR leaders across industry who agree that upward mobility inside an organization increases retention, engagement and overall job satisfaction.
Top Tier Strategy
HR leaders possess vast reservoirs of employee data both from quantitative sources such as quarterly reviews, employee surveys and 360⁰ assessments, as well as qualitative sources such as one-on-one conversations with employees and exit interviews. When HR is allowed a voice to translate that data into actionable plans for senior managers, HR can solidify its position as an invaluable partner for business growth and success.
With your expertise as an HR leader and your insights into the daily workings of your organization, you can make large, valuable contributions to developing and implementing business strategies, planning effective succession, and aligning people, performance and culture to mitigate risk and help your business succeed.
Rotman brings senior HR leaders from across the public and private sectors together every January for the Strategic Human Resource Leadership program. Here, you can network, enhance your capabilities, and learn how to best influence senior leadership, including by supporting culture change initiatives, succession planning, and talent management.