Maximize your organization’s HR value

Authored by Chetan Jain, Jessica Britton, and Carrie Fox

Over the last five years, HR leadership strategies have defined success as reaching “the destination”—the ultimate operating model, new technology, or enhanced worker experience. While these efforts were necessary to build an operational foundation, many leaders feel they haven’t fully capitalized on these investments. This sense of unrealized HR value is compounded by constant, rapid changes, amplified voice of the workforce, and global talent shortages.

Now the expectation for HR is not just to keep up, but to predict and guide the business through these changes, evolving from a siloed function to a boundaryless discipline integrating with people, business and the community. Where does HR go from here?

How can leaders unlock the full value of HR?

HR needs to draw on a new strategy to shape the path forward. If leaders do not act, the status quo is that HR spend grows and the disconnect widens between the services delivered and those the enterprise needs.

Simply making investments to improve near-term efficiencies isn’t enough to demonstrate HR’s value. Unless these new investments are paired with sustainable practices, they quickly lose their edge or become obsolete. By focusing on value realization, HR will continually improve and adapt with the swiftness today’s world requires.

Six initiatives to help HR leaders deliver greater value

As HR leaders shape their strategic priorities, it’s essential to balance projects focused on near-term efficiency gains with practices that enable HR to adapt to the changing needs of the workforce and enterprise in real time.

1. Optimize technology capabilities to adapt with evolving HR services
   Organizations may make sizeable investments in new technology products only to find that months or years later, shadow processes or workarounds have cropped up and the tool is underutilized. To evaluate how your tech landscape can be optimized to support your HR services, governance routines, including release management practices for cloud technologies, should be defined proactively.
2. Elevate HR capability to address the organization’s most critical needs
   As HR leaders continue to modernize work, it’s crucial to complement those changes with a shift in overall mindset. HR should offer a dynamic structure that enables direct engagement with business leaders on recommended talent strategies and programs that tie to the goals of the organization.
3. Optimize vendor partnerships to enhance worker experience
   Once partnerships are established with third party providers, it’s important not to leave the quality or experience of workers solely in the hands of the vendor. Developing vendor management capabilities in-house can prevent “clunky” hand offs, escalated customer complaints, and potential missed service-level agreements (SLAs).
4. Promote agile talent management
   While it’s important to engage with the business in regular, deliberate discussions on talent requirements, HR also needs to develop skill-based talent processes that allow leaders to make effective, efficient talent decisions. Without such processes, the organization won’t be able to swiftly deploy skills and capabilities where most impactful.
5. Optimize labor spend
   The average Fortune 500 company loses ~$30M in unplanned labor costs each year¹. HR is well positioned to identify hidden labor costs (e.g. unmanaged overtime, scheduling errors, etc.) and proactively automate labor forecasting, capacity, and fulfillment to improve operating margin.
6. Protect brand and promote workforce trust
   Workers in high-trust companies are 180% more likely to be motivated and 140% more likely to take on extra responsibilities. While many organizations are beginning to enhance their employee relations capabilities, they also need to activate the role of “people leader.” People leaders are on the front lines and in the best position to promote company values and create a culture of trust, which can have direct impact on brand reputation, employee engagement, and overall financial performance.

Where to begin?

Before starting your journey to unlock value for any of the six areas above, it is important to take a step back and reflect on your goals and your strategy to achieve them. Your organization’s target business outcomes and HR maturity will help determine your priorities. Asking the following questions can help focus your efforts on the areas that will deliver the maximum return on your investment:

1. Is this initiative advancing our business strategy or addressing a key business challenge? If not, should it be de-prioritized?
2. What sustainable practices would need to be introduced alongside this investment to sense changing needs and adapt in real time?
3. Does our list of initiatives leave capacity to flex if needs change?

What’s next?

In this series, we will explore how you can successfully integrate sustainable practices across common areas of value for the enterprise and for the HR function. We’ll also unpack specific ways to realize the full value of your strategic HR investments and maintain it overtime.

Want a deeper look at HR value realization? Download Disrupting the status quo: The path to unlocking HR’s value.

Authors

• Chetan Jain
• Jessica Britton
• Carrie Fox

Contributors

• Alexa Steinman
• Brad Lubeck
• David Clark
• Nicole Unis Senerth

Endnotes:

¹ Gallup, State of the global workplace: 2023 report, accessed December 1, 2023.