3 Reasons HR Needs to Be Involved in Planning a Business's Strategy In a job market defined by competition for skilled talent, HR leaders can, and do, make an impact on an organization's bottom line.
Opinions expressed by Entrepreneur contributors are their own.
In a job market defined by competition for skilled talent, HR leaders can, and do, make an impact on an organization's bottom line. From recruiting to employee development to retention strategies, HR teams are expected to bring data-driven solutions to the table that contribute to and lead the company toward its overall business goals.
For CEOs, that means bringing HR leaders into the strategic fold.
In a July survey of 88 leaders at companies with at least $50 million in revenue, CareerBuilder found 65 percent of CEOs agree that the opinions of HR leaders carry greater weight with senior management than ever before. Even more telling, 73 percent of CEOs have already incorporated data from HR leaders into their business strategies, suggesting this is not just a theoretical trend, but one that's being put into action.
The big question is why? Why are CEOs just now realizing the importance of HR leaders in this competitive-talent landscape? What makes this post-recession economy the bridge for HR leaders to cross over to the strategic business-planning world?
Simply put, it's insight.
HR leaders have the insight and data that can help companies streamline recruiting processes and optimize their human capital. They understand the company culture and are already involved in building a workforce that will help organizations meet business goals. Now, it's just a matter of officially involving them in the process.
Still not convinced? Here are three key reasons CEOs should include HR in strategic business decisions from now on:
1. They understand where the skills gaps are in organizations.
The skills gap is a real concern for many companies. So real, in fact, that 48 percent of respondents in Spherion Staffing Service's 2015 Emerging Workforce Study cited it as the biggest issue facing their organizations. This struggle to find qualified talent to fill skilled positions is keeping companies from meeting their full-earning potential.
HR leaders struggle with this problem every day. They are on the front lines of the battle for talent, so they know where, and at what levels (entry level, mid level, executive level), the skills gap is affecting their company the most. Because of this, they are valuable assets when it comes to long- and short-term strategic planning.
By bringing HR leaders into strategic-business discussions, CEOs are rewarded with insightful recommendations about their organization's skills shortages and how to fix them through talent-management programs and succession planning.
Whether it's developing in-house talent-development strategies, building multi-generational teams to help strengthen organizational learning or other customized solutions, HR leaders are in the best position to help CEOs and other strategic planners realign key business goals and success metrics to address the skills gap issue in their organizations.
2. They can help increase human-capital efficiency company-wide.
At a time when, according to Gallup's daily tracking poll, only one third of Americans are engaged at work, how an organization manages its people is more important than ever.
Good HR leaders have their fingers on the pulse of the organization and know why and where turnover is most prevalent. They understand that -- like 57 percent of more than 5,500 business leaders surveyed as a part of Payscale's 2015 Best Practices Report -- turnover is one of the biggest issues facing companies today. Because turnover is so costly for organizations, this knowledge can be critical in distributing talent and planning for the future.
When CEOs invite HR leaders into the discussion and tap into their knowledge of the workforce, they are better able to take advantage of unique insights that can cut costs, reduce turnover and realign human capital to increase efficiency.
3. They can provide actionable data to streamline recruiting.
Forty-eight percent of CEOs admit to losing money because of inefficient recruiting strategies, according to the aforementioned July CareerBuilder survey. HR leaders can help solve the problem.
Today, more HR leaders are focusing on developing and analyzing company-specific metrics that measure the efficiency of the hiring process in real time. Aided by talent-alignment platforms and data-analytics software, HR teams are now more equipped than ever to provide competitive fact-based solutions to quickly reduce inefficiencies in the recruiting process.
These data-driven HR leaders can be instrumental in strategic-business planning by working proactively with CEOs and other executives to solve staffing issues, allocate recruiting resources and build programs that align the candidate experience with business goals.
The benefits are clear. With data-driven insights and unique organizational knowledge, HR leaders are poised to make a huge impact in the boardroom. CEOs who take advantage of these insights in strategic-business planning can strengthen their businesses with creative, data-backed solutions to the issues facing their organizations.