It’s a good thing that technology has automated processes in the field of human resources. Now more than ever, companies have much to gain by shifting their HR mindset away from administrative duties and toward people-focused strategies.
Of course, clerical HR functions are necessary for the success of an organization. But now that software is taking on the heavy lifting of admin work, HR teams are freed up to put on their strategic caps. Many strategy-minded HR professionals are shifting their focus on how to cultivate outstanding employee experience and company culture. This visionary mindset has transformed HR from a reactionary business function into one that advances long-term business goals.
How exactly do transactional and strategic HR differ? In broad terms, one is more reactive and focused on the day-to-day operational needs, while the other tends to be proactive and forward-thinking. Let’s take a closer look:
Transactional HR refers to administrative and routine human resources tasks. These are the job functions that ensure a functioning workplace and revolve around short-term equilibrium rather than long-term gain.
Some transactional HR responsibilities include:
Transactional HR roles are usually more entry- or mid-level, such as:
Strategic human resources is focused on developing HR processes and initiatives that achieve larger business goals. HR teams that harness a strategic approach work closely with company leadership to define organizational objectives and chart out corresponding HR tactics.
Some strategic HR responsibilities include:
While smaller companies may just have one strategic HR leader, some larger companies are building out full strategic HR teams. These professionals typically have transactional HR knowledge under their belt and have moved up to spearhead strategic initiatives. Some strategic job titles include:
The shift from transactional toward strategic HR is a momentous one, and it begs understanding as to why such a dramatic shift has occurred. There are several reasons why:
There is much greater awareness nowadays that people are truly the biggest asset to an organization. A company’s performance is closely tied to its workforce and the decisions that have gone into cultivating it — everything from which roles are created to how employees are treated on the job.
The quantitative and qualitative results of a thriving workforce are tremendous. And when a workforce thrives, it’s better poised to achieve organizational goals — a win-win for everyone.
In addition to company leadership’s growing acknowledgment of the employee experience, employees themselves are increasingly seeking out employers who prioritize people and culture. Today’s workers expect to find employers that align with their values, recognize their talents, and encourage camaraderie. These employees are insightful enough to realize that when they’re appreciated on the job not only are they happier but they perform that much better.
Another impetus for change is that employees have begun to feel disillusioned by disconnects between company leadership and the workforce. When HR practices fail to align with the mindset and goals of the company, employees sense inauthenticity and start to disengage. Examples of misalignment include an educational organization that doesn’t offer any professional development programs or a productivity software company with a rigid, one-size-fits-all work model.
While the above social factors have spurred the move toward strategic HR, this shift wouldn’t be possible without automation. HRIS solutions have proliferated and become more advanced thanks to artificial intelligence and analytics. There is now a wide range of solutions that increase efficiency in many areas of HR — such as payroll, recruiting, employee recognition, and more. Not only does HR software carve out more time for human resources professionals, but it also offers a treasure trove of insightful data metrics that can inform strategic decision-making.
We’ve briefly touched upon the benefits of a strategic HR mindset, but let’s dive in a bit deeper. Some of the tangible outcomes of implementing strategic human resources include:
Human resources strategies help companies perform at their peak — and outperform competitors. These strategies (which we’ll soon discuss) prime companies to attract the best talent, perform at maximum capacity, and achieve business goals.
Strategic HR prioritizes efforts to improve the employee experience, such as employee recognition and professional development. These initiatives help employees be more engaged, which in turn boosts productivity.
Employee turnover is a massive pitfall for organizations, as it increases costs and unravels accumulated knowledge. Fortunately, people-first HR strategies are highly beneficial for retention.
Strategic HR leverages technology to automate processes and glean access to valuable data. This empowers employees to get more done in less time while prioritizing data-driven, impactful decision-making.
Recruiting and hiring are costly initiatives. Strategy-minded HR professionals can decrease spending on these efforts by taking steps to attract the right talent, prevent resignations, and avoid overstaffing or understaffing.
Is your business ready to start reaping the benefits of strategic human resources? Here are some practical ways you can layer strategic HR onto your existing transactional HR operations.
The first step to embracing strategic HR is onboarding strategic HR talent. Consider hiring professionals who specialize in areas like people operations, organizational development, and data analytics. Individuals in these fields can optimize workforce management and successfully transform company initiatives into practical HR strategies.
Deep knowledge of the organization — its business model, service or product offerings, and competitive landscape — is a springboard for successful HR initiatives. Your HR team should work closely with company executives to conduct a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis, and from there, collaborate on an ongoing basis to keep all efforts aligned.
Strategic HR takes an empathetic and intentional approach to every step of the employee lifecycle. Whether it’s creating tailored onboarding experiences, recognizing unique employee talents and accomplishments, or offering professional development, strategic people ops initiatives are the heart of a strategy-led company.
By pinpointing shared values, beliefs, and behaviors, companies are better poised to attract and retain the right talent. A healthy and distinct company culture keeps employees satisfied and even makes lofty business objectives that much more attainable. Once your company culture has been solidified, your HR team and company leadership play an important role in serving as culture ambassadors who demonstrate these core values.
Your tech stack lays the groundwork for strategic HR by freeing up time spent on transactional duties. Assess your existing software programs and explore new options that will help you automate processes, track key metrics, and manage employee engagement programs with ease.
Transactional HR is what keeps your business afloat — and strategic HR is what catapults it to new heights. If you’ve got a solid foundation of transactional HR processes, now’s the time to layer on strategy and company culture efforts.
Finding the right combination of HR talent and software is key to your success. You’ll want to look for human resources leaders with proficiencies in workforce management and big-picture thinking. At the same, the latest generation of HRIS technology will help you achieve your goals with greater ease and efficiency.
As you consider HR software options for your business, be sure to put recognition and rewards software at the top of your list. User-friendly solutions like WorkProud equip your entire workforce with advanced — and fun! — tools for praising coworkers, issuing meaningful rewards, and celebrating achievements. With WorkProud, you can seamlessly foster a culture of appreciation that keeps employees happy, productive, and unified around common goals. Click here for a free demo!
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