What is strategic HR and how can HR be a strategic business partner for management?

What does strategic HR actually mean and how can HR be organized so that it is a positive driving force for a company’s results? HR’s role and deliverables must be identified based on four questions: Why, what, how and who.

Strategic HR means that HR as a department is entirely focused on the company’s goals and strategies. It must ensure that the organization acquires, develops and uses human resources in an optimal manner in order for the company to attain its goals.

In practice, it is about bringing out the potential in people, developing skills, ensuring effective organization, implementing restructuring, facilitating cooperation through effective processes and adopting new technology, to mention but a few examples.

When an HR department determines its own deliverables.

Traditionally, many HR departments have had a distinct internal focus, where the department sets its own goals, draws up its own strategies, defines its own reports and develops the HR department with a focus on what makes sense in an HR context, ideally in line with any superior HR department. The distance between HR and the commercial part of the company quickly becomes considerable and HR becomes a ‘back office’ service department responsible for administering wages and insurance policies, employment contracts, company cars, organization charts and personnel handbooks.

Such tasks are defined in HR as administrative tasks, or what we prefer to call transactional HR. However, we must not underestimate the importance of these! They are important health factors, and frustration and dissatisfaction quickly follow if these functions fail.

Automated administrative tasks.

HR must utilize the potential offered by new technology and digitalization to address these important administrative personnel tasks. Electronic systems facilitate efficient and automated processes with a high degree of self-service for both employees and managers.

For example: If an employee’s bank details or marital status changes, the change must be made by the employee themselves using a self-service HR portal, not via an email to HR, which then must update the information.

Systems and solutions that automate administrative tasks and enable managers and employees to carry out HR-related duties themselves to a greater extent result in a far more efficient HR department that delivers quality and skills, rather than merely providing a service. Such systems are therefore an important key in a more strategic company HR department.

HR as a strategic business partner.

If HR is to take a step up and become a strategic business partner in the company, HR must have a skill that offers added value for the management. However, it is not just the skills profile that has to be changed.

There must also be a switch in focus from internal to external, i.e. from ‘inside out’ to ‘outside in’. Instead of HR defining and providing what it believes an organization needs, HR must be developed based on an ‘outside in’ perspective.

It is the organization and core business that defines what HR must deliver, and it is not merely a question of what must be delivered; why, how and by whom must also be clearly defined.