Posted: 17 Oct. 2024 8 min. read

Strategies for unlocking value through the HR function

Authored by Chetan Jain, Jessica Britton, and Carrie Fox

As HR becomes increasingly boundaryless, organizations expect to get more value out of the HR function. However, only 15% of executives believe that their organization values the work performed by HR, according to our 2024 Global Human Capital Trends research. By shifting HR's mindset, optimizing technology and AI, and enhancing vendor partnerships, leaders can unlock the true potential of the HR function, driving sustainable value creation for both the business and the workforce.

In the previous article of this series, Disrupting the status quo: Unlocking HR's value across the enterprise, we explored three key areas where HR leaders can drive value within the organization. Now, in the third installment, we narrow the lens to focus on how leaders can create value through the HR function. Before diving into the specific areas of value creation, it's crucial to address a fundamental shift in mindset that HR leaders need to embrace.

Shifting HR’s mindset: From efficiency to outcomes

Historically, HR has been laser-focused on driving efficiency and improving workforce experience. While these are important, the true measure of HR’s success should be its ability to achieve meaningful outcomes for both the business and the workforce.

This shift in mindset requires HR leaders to anchor their strategies in broader business objectives. It’s not enough to simply align HR’s goals with the enterprise strategy on paper. The real challenge lies in bridging the "knowing-doing" gap—translating strategic intent into actionable, day-to-day practices that drive tangible results.

Three key strategies for unlocking HR value

  1. Optimize HR technology capabilities to adapt with evolving services
    Managing the HR technology landscape is far more than selecting the right tools. With a focus on business and workforce outcomes, a robust HR technology infrastructure should not only meet current needs but also adapt quickly to changing business requirements.

    Some of the key operational changes HR organizations can make to prevent technology from getting “stale” post implementation include:
    • Developing capabilities for HR technology owners to consult fluently on business outcomes
    • Defining an investment strategy that accounts for ongoing resource capacity for enhancements
    • Refreshing the governance model and partnership with IT
       
  2. Elevate HR capabilities through AI to address critical needs

    Chief Human Resources Officers (CHROs) are increasingly expected to elevate HR’s role beyond traditional responsibilities. But what does this elevation look like in practice? Defining the right HR capabilities to address the organization’s most critical needs is not a static exercise. It evolves alongside changing business and workforce outcomes.

    One relevant example is the impact of GenAI on work and the workforce. With 75% of organizations expecting GenAI to affect their talent strategies within the next two years, HR leaders must rapidly develop AI capabilities to stay ahead of the curve and position themselves as an early adopter. This proactive approach can reshape HR’s work, freeing up capacity and generating savings that can be reinvested into driving innovation.

  3. Optimize vendor partnerships to enhance worker experience

    HR leaders are accountable for delivering services that enable business and workforce outcomes, regardless of who provides them. While foundational vendor management routines—such as monitoring service-level agreements (SLAs) and establishing escalation paths—are essential in improving vendor relationships, they are only a first step. To truly optimize these partnerships, HR leaders must challenge traditional views of which services are outsourced and redefine who they consider "partners" in the HR vendor ecosystem.

What’s next?

For each of these three areas, HR leaders must implement sustainable practices to maintain value. To discover what actions you can take to sustain that value over time, along with case studies demonstrating how other organizations have tackled similar goals, download Disrupting the status quo: Unlocking value through the HR function.

Through this series, we’ve explored six initiatives that can help leaders realize the full value of their strategic HR investments. While we touched on evolving technology, our upcoming articles will delve deeper into the impact of AI on the future of HR and the HR operating model. Stay tuned as we continue to explore how HR can maximize its value and drive meaningful outcomes for the business and the workforce.

Authors

Contributors

  • Dan Brown
  • Danielle Boutwell
  • Eoin Drumm
  • Rob Straub

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