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How to Align HR and Business Objectives

human capital management trendsBy Diamond Richardson

If you are in any form of HR position, you have probably heard numerous times about how important it is to align business and HR objectives. The Aberdeen Group’s 2013 study on human capital management trends found firms with HR departments that are aligned with business goals are able to better plan for future talent needs and integrate workforce and talent initiatives.

However, aligning HR and business objectives can prove to be quite a challenge. As most of you know, HR professionals wear many hats. They have to be expert relationship builders, bridging gaps between employers and employees. They have to balance this role as relationship builders with the ability to prove the return on investment of HR activities. It is a lot to juggle. When you add strategic business alignment, the task can seem insurmountable. Luckily, it is easy to break the task down into parts:

1) Find metrics that please both HR executives and the C-suite.

HR professionals are likely to obsess over metrics like cost-per-hire and turnover rate. Most CEOs are looking at stock prices, return on assets, and other financial data. The key to aligning these metrics is to find how they impact each other. HR professionals should be able to explain in detail how hiring quality employees positively affects the company’s bottom line. HR Daily Advisor provides an excellent article on HR metrics for C-suite impact.

2) Share human capital management data with all stakeholders.

HR will never be at the forefront of company decisions until HR makes the necessary information available. The Aberdeen Group reports that only 25 percent of organizations make relevant human capital management data available to stakeholders. This information needs to be communicated to company stakeholders, just like financial reports. It also needs to be presented in a way that is clear to understand and easy to use. Providing the return on investment of HR activities is a great way to get stakeholder’s attention. HR and organizational policy professional Tia Benjamin provides a guide for calculating human resources ROI here.

3) Realize that you are all working toward the same objectives.

C-suite executives must create a culture of inclusion for everyone in the organization. If HR feels like they are constantly fighting for funding or respect, they may begin to gain a short-sighted focus on metrics that only matter to HR, specifically to “prove” they are good at HR functions. But if a company is not profitable, HR efforts will not matter. Meetings that include leaders from all departments in an organization are critical to make sure that the company-wide mission and objectives are clearly communicated. This puts each department head in the right mindset to take actions that are best for the company as a whole, not just for their individual departments.

There is one shared factor in all three of these tips: finding a common link. HR professionals must assess every action in terms of links to business objectives. They should be honest with themselves about whether an activity is worth implementing if they cannot find a way the activity adds value. This honesty is the best way to make sure that HR objectives and business objectives are strategically aligned.

How do you align HR goals with business goals in your company?

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