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What HR Needs to Succeed (But Most Don't Have Yet)

What HR Needs to Succeed (But Most Don't Have Yet)

by Faith Gaines and Jake Herway

Story Highlights

  • Your people are more of a competitive advantage than your tangible assets
  • Leaders often blame HR for problems, but need to focus on lending better support
  • Free up HR to focus on the employee experience, then hold them accountable

Think about what these businesses have achieved:

  • Uber >> the new taxi
  • Airbnb >> the new hotel
  • Google >> replacing encyclopedias, maps and more
  • Amazon >> replacing brick-and-mortar stores

What do they have in common?

They've succeeded without the traditional business assets of their industry.

Their use of technology and AI tore down historical barriers to entry -- showing that tangible business assets are becoming less and less of a competitive advantage. In fact, tangible assets have dropped in S&P market value from 68% in 1985 to an average of 13% today.

What does this mean for businesses? It means that focusing on your intangible assets is your best chance for achieving organic growth and higher market value today. And HR leads the one intangible asset that's under-utilized more than any other: your people.

Gallup's recent research on the employee experience reveals that organizations rarely meet people's basic needs at any stage of the employee life cycle. Leaving only 15% of employees worldwide and 33% in the U.S. engaged at work.

It might be hard to believe those numbers if you feel like your organization has plenty of human resources systems in place, but organizations are still missing the mark.

Many leaders turn their gaze to HR when they notice that their people aren't productive or when good employees quit -- but a strong company culture -- the type that keeps top employees -- starts with leaders.

In other words, your HR department might not be set up for success -- and they can't be -- without your leadership support.

Here are the four things leaders can do to help HR get the best out of your people:

1. Raise the expectations for results (so you can justify the investment).

If people are your company's biggest asset and you plan to invest in them, your organizational strategy and people strategy can't be considered as two separate things.

HR should bring their voice to your company's decision-making process -- and be accountable for helping your organization get results.

Often leaders budget HR as an expense, rather than an asset to invest in. But instead of cutting costs, you can invest in your people strategies and then ask HR for a clear connection on the return by tracking the right metrics.

HR should bring their voice to your company's decision-making process -- and be accountable for helping your organization get results.

When held accountable, HR is liberated to find the right solutions to get business outcomes.

2. Empower them to make data-driven decisions in a realistic way.

Technology that helps HR collect employee feedback and performance data is finally becoming more readily available. But it's creating a new problem.

HR has quickly gotten bogged down with too much data (often surface-level data at that) and without enough, or the right, guidance.

It's hard to make data-driven decisions based on numbers if you're not sure what the numbers mean. It's a mistake to invest in data collection technology if leaders aren't devising a strategy to go with it and empowering HR to use the data correctly.

It's hard to make data-driven decisions based on numbers if you're not sure what the numbers mean.

This is why Gallup developed a new workplace platform. Gallup Access helps HR collect insights about employees -- and it also highlights and teaches managers what to do next, after the survey, to improve their team engagement and performance -- based on decades of research.

Gallup paired research and surveys that help you measure your culture with learning insights that allow you to understand the implications of the results and make decisions that achieve business outcomes.

3. Free them from primarily focusing on tactical, compliance and compensation issues.

If you work in a matrixed organization, you know that cultivating the right employee experience across cross-functional teams will take time and talent.

You must work proactively.

Instead, what do a lot of HR teams say they spend their time on? Reacting to problems that would diminish if they could only get ahead on their initiatives.

They spend time helping others resolve interpersonal problems and navigating office politics, and many ethical, legal, compliance, benefit and compensation issues, too.

While HR should support or lead these issues on some level, figuring out which issues could be delegated to your legal and financial teams -- or even your team managers -- and investing in technology that expedites tactical work (background checks, getting a corporate ID card, issuing computers, etc.) -- will free them up to focus on the big picture.

4. Develop and invest in your people managers (because HR initiatives are limited without them).

Your managers, from the very top to the first-level manager, can create success or disaster for an HR team working to optimize a company's most valuable assets.

From Gallup's recent research on managers:

"Nearly every problem and achievement in your organization can be tied back to the quality of your managers.

Why? Gallup has found that the role of the manager is a dominant factor in the employee experience -- from onboarding and performance to development and retention. Managers account for an astounding 70% of the variance in team engagement, and their efforts substantially impact the bottom line of entire organizations.

How your managers feel about your organization greatly influences how everyone else feels about it. In other words, your manager experience largely defines your employee experience."

HR can provide all sorts of education, communication, data and analytics -- but they can't achieve anything without developing and investing in the managers who are responsible for the daily engagement of every employee.

HR's success is the organization's success. But they can't do it alone.

Getting the best of your people and your business has always been a team sport. Perhaps the responsibilities have not been clear, though.

Organizations who set clear expectations and remove roadblocks for HR are the ones who achieve the kind of culture great employees want to be a part of.

In doing so, leaders are able to successfully manage the intangible assets of their business, directly influencing the majority of their market value.

Learn more about how HR and leaders can work together to get business results:


Faith Gaines is Director of Consulting at Gallup.

Jessica Buono contributed to this article.

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