Importance of Human Resources Leader in Your Business

One can make the argument that the performance of every business is derived from the talent of the people inside the organization. That talent edge is even more pronounced in, say, a professional services firm, whose value comprises nothing but people. No matter what business you’re in, your talent is the key factor in helping you drive toward your strategic objectives.

That’s especially relevant these days as companies have begun to wage a so-called War for Talent. We’re already seeing this play out in terms of increased wages and difficulties firms are having in filling key positions.

And yet, when you talk to most CEOS about their HR function, they don’t make the connection between talent and strategic objectives. HR is simply an administrative function. This boggles the mind since the importance of human resources lies in recruiting and retaining talent which is now so critical to every company’s success. That’s why it’s time to give HR a seat at the strategic table inside your business.

1. More than an administrative job

Most people still think of HR as a collection of functions that keep the train running on time. This involves administering tasks like payroll, benefits, the 401(k) plan, vacation policy, and updating employee handbooks.

While CEOs understand the importance of those functions, they often miss the connection to how they also inform the performance of the organization. This is where the strategic impact of HR comes into play–especially if you’re trying to rapidly grow your business.

If the performance of your company hinges on the kind of talent you have inside the business, it’s high time to give your HR function a voice in the strategic direction of the business. Having someone on your executive team capable of discussing how you can attract and retain talent will only grow in importance in the coming years as the War for Talent continues to heat up.

2. Get the right person on the bus

To give your HR function more of a strategic role, you also need to ensure you have the right person ready to step up into that role. This means someone who can transcend the HR function and become a business partner, especially in a talent-driven business, which most of us own. The term “business partner” is popular in the HR field, so you must be careful when hiring to ensure the candidate has solid business knowledge as well as functional HR knowledge.

I remember a time when I had a very capable HR exec reporting to me as CEO. He was great at administrative tasks and making sure everything was functional with our buildings and grounds functions. But as the business began to evolve, as we moved into new areas like software and advanced technology, I found that my HR exec wouldn’t keep up with us. He didn’t know how to acquire and retain the kinds of talent and skills we needed to grow the business in the direction we wanted. That meant, to pursue our strategic objectives as a company, we needed a different kind of person in that role.

3. Talent drives strategy

I’ve previously written about how when a company is ready to enter new markets, you can pursue one or more of these three strategies: build, buy, and partner.

It turns out that that same approach applies to talent as well. Most of us focus on building our talent from the inside, giving people opportunities. Other times, we need to buy talent by bringing new people into the organization to fill gaps. This might even include acquiring a company in pursuit of its talent. Finally, bringing temporary talent in as a partner can make sense, for example, when a consultant can help solve a particular problem.

But if you want to make that happen, you need to have the right kind of strategic HR leadership talent in place to pull it off and help think through the options. And when you have the right person, it’s time to give them a voice on your management team to ensure you maximize your talent.