What is Strategic HR?

"You can continue to work in HR, but you may find yourself working for a third party provider. Or you can break the boundaries and question the ways that people can create value in the organization."

Alex Wilson
Group HR Director, BT

Executive Summary

1.   How HR's increasing value to the business and its growing relevance to delivering corporate strategy is reflected in the recent experience of Kelly Services, Orange UK and Allied Irish Bank, where HR has been successfully positioned as a driver of strategic success.

2.   An analysis of the legacy of HR as a passive provider of transactional HR services and the re-evaluation of its role during the 1980s and 1990s as a strategic partner in the business. The development of tools such as scenario planning, critical success factors, the human resource approach, the learning needs approach and the strategic competence assessment to support this expanded role.

3.   The practical difficulties in translating this strategic role into practice illustrated by the mixed success of the Hong Kong Government's Serving the Community initiative in the mid 1990s.

4.   The limitations and problems with scenario planning and other HR and business alignment methods proposed in the 1990s. The subsequent adoption of other methods, such as the Balanced Scorecard, to help companies integrate HR with business strategy.

5.   How the growing use of shared services and outsourcing, as well as the reintroduction of e-HR for web-based self-service, opened up fresh opportunities for the organization of HR. How technology helped Marks & Spencer to improve HR services.

6.   An outline of the new capabilities and skills that are demanded by strategic HR for the HR director and other staff within the function.

7.   Business Intelligence's research among 200 HR directors and senior managers, summarized to draw out the main conclusions. The findings show that HR departments most likely to take on a strategic role in the organization have the following three characteristics :

-  A conviction at board level that HR has a key role to play in supporting the achievement of business goals

-  The capability within HR to understand and contribute to the shaping and delivery of business strategy

-  The ability to demonstrate that HR is making a measurable contribution to business success.

8.   The research also identifies the CSFs that enable HR to contribute to the strategic success of the organization:

-  Ensure efficient service delivery

-  Speak the language of business

-  Demonstrate the business benefits of HR

-  Create processes and practices for partnership

-  Develop business skills within HR

-  Build HR's credibility as a business partner

9.   Finally, there is a profile of the strategic HR director, based on the analysis of findings from Business Intelligence's research.

Case studies: Kelly Services, Orange UK, Allied Irish Bank, Marks & Spencer, the Hong Kong Government and Shell Oil

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