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Why It's Time To Give HR A Strategic Seat At The Leadership Table

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Talent is scarce and it’s going to get scarcer in the future. The value of companies will soon be tied to the value of their people. The ones with the best talent strategies will dominate their markets in the coming decade.

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What role does human resources play in your company? Depending on how big the business is, you might not even have a human resources person, let alone an entire department. Either way, the tasks typically associated with HR—like hiring and firing, compliance regulations, and compensation—need to be tackled by someone in the organization. Doing these tasks well is critical to the success of any company, especially during challenging times like a pandemic or a recession. 

But that’s usually where it stops. Even those organizations who have taken the step to create C-Suite positions like Chief Human Resource Officer or Chief People Officer all too often look to these HR professionals to help execute plans—not provide their voice in setting strategic direction.

It’s time for that to change. It’s time to shift HR from the role of risk mitigation and box checking into one of strategic thinking. It’s time to give HR a strategic seat at the leadership table. We need our HR people to think and act like businesspeople. We need to get our HR teams working on the operations of the business, not just in them. And we need to make these changes now if we want to create a desirable future for the next generation of workers.

Why? Because the talent in our organizations will be the single most critical factor that either fuels or constrains the future growth of the organizations. We all face a looming crisis that will require everyone to fix it as soon as possible.

 

How Can You Grow Without Enough People?

The first steps of transforming the role of HR inside our organization began in 2014. It was during one of our twice-annual strategic planning sessions (what we call “High-Involvement Planning™”) where associates from our ten divisions present their annual and five-year sales and financial plans to their peers and our board of directors. It’s hard not to get inspired during these meetings as our associates present their vision of future growth based on their analysis of hard economic data, market trends, and competitive insights gained from their customers.

As an organization, we pride ourselves on the accuracy of our forecasts (historically 97%) because we work hard at gathering the right data to understand what the opportunities and threats are. As we like to say, there’s no such thing as fairy tales when it comes to planning. We need everything to be rooted in reality.

During that High-involvement Planning meeting in 2014, Keith, one of HR associates, was watching each of the presentations that day. And whenever an organization put up a slide containing its five-year growth plan, Keith would start scribbling like mad on a pad of paper. He was doing quick calculations to determine the average sales-per-employee for each organization. When the presentations concluded, and the collective five-year growth plan was flashed on the screen, Keith checked his pad and then raised his hand to ask a question. “It’s really awesome to see all the growth everyone is planning over the next five years,” Keith said. “But, based on my calculations, that means you’ll collectively need to hire a lot of new people to do all that work. What’s your plan to accomplish that?”

 

Rethinking the People Strategy

It was like Keith punched me in the gut. I couldn’t breathe. He was absolutely right. If we wanted to take advantage of all the opportunities in front of us, we needed to completely rethink how we approached the recruitment, development, and retention of our people not just now—but also well into the future. He had put his finger on the biggest constraint to our future growth. How could we grow without enough people?

When I looked at the rest of the group, not one other person caught Keith’s point. In fact, they hadn’t even seen the swing coming. It was clear they had never engaged the HR people like Keith in creating their strategy. They just assumed HR would somehow cover the people gap.

That’s when I knew that we were truly taking HR for granted—and that we needed to rethink the role of HR inside our organization to help us get where we wanted to be. Big time.

 

Planning For The Future

We talk a lot about the future inside our company. We’re always looking ahead to try and anticipate what kinds of problems or opportunities might be headed our way so we can take actions now to address them. We believe there’s a big storm coming in 2030 caused by the changing demographics in the workforce. The first signs of its impact are already here since we have 11.5 million open jobs. By 2030, the last of the Boomers will retire, which will lead to an even greater shortfall of available workers that forecasts say could bloom to 85 million open jobs. There simply won’t be enough people to do all the work that needs to get done. It’s simple math. According to our friends at ITR Economics, it’s going to create an economic tsunami like we haven’t seen since the Great Depression. The forecast is dim.

That’s why we need our HR teams to help us find solutions.

 

Read the complete article on LinkedIn!

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Need help with your business plan? Learn more about business planning and creating a people strategy at our High-Involvement Planning Workshop.

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Topics: Employee Recruitment and Retention, business planning, business strategy, Human Resources, people strategy

Authors of our latest book, Change the Game: Saving the American Dream By Closing the Gap Between the Haves and the Have-Nots. Jack Stack is president and CEO of SRC Holdings Corporation. Stack, a graduate of Elmhurst College, came to SRC in 1979 as the plant manager of International Harvester (IH). In 1983, Stack and the SRC employees bought the company from IH and have turned it into what Inc. magazine has proclaimed “one of America’s most competitive small companies.” He is the author of the books, The Great Game of Business, A Stake in the Outcome, and Change the Game. Jack has been called the “smartest strategist in America” by Inc. Magazine and one of the “top 10 minds in small business” by Fortune Magazine. Darren Dahl is an experienced ghostwriter and business journalist, having written for publications like the New York Times, Inc., and Forbes, Darren has also ghostwritten multiple books, several of which have landed on multiple bestseller lists.

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About The Great Game of Business

Our approach to running a company was developed to help close one of the biggest gaps in business: the gap between managers and employees. We call our open-book approach The Great Game of Business. What lies at the heart of The Game is a very simple proposition: The best, most efficient, most profitable way to operate a business is to give everybody in the company a voice in saying how the company is run and a stake in the outcome. Let us teach you how to develop a culture of ownership, where employees think, act and feel like owners.