HR’s impact gap: how to prove strategic value to the business

Seals-Coffield’s believes that HR’s evolving mandate speaks directly to the strategic influence problem. “How our people are experiencing the transformation is so critical to our success on this journey — and that sits pretty squarely on the people team,” she says. “There’s a very consistent theme among my peers around how closely we work with our Chief Technology Officers to think about not just how we build incredible technology, but how we deliver it to our people from an experience perspective.”

Jonathan Tabah, Director in Gartner’s human resources practice in Sydney, adds a further dimension: the measurement problem runs not just at the HR function level, but through how HR evaluates its own managers — and the signal this sends to the C-suite about the function’s strategic seriousness.

“Rather than simply measuring managers just on things like the engagement and retention of their staff, we should also be measuring them based on things like their contribution to the organization’s performance outcomes,” says Tabah. “Yes, we should still measure talent outcomes — engagement, retention — but we should also be evaluating whether they’re impacting business goals too.”

Tabah is direct about what HR leaders are hearing from the top: “When I engage with heads of HR — direct reports to the CEO — almost all to a ‘T’ have got aggressive high performance targets and objectives,” he says. “When we really break it down, the word that keeps bubbling to the top is productivity… our job in HR is to provide a workforce that can help the business achieve its goals — if we aren’t helping the workforce adapt to those new objectives, we will fail in that goal.”

What CHROs need to stop doing — and start

Nelsen is clear about what needs to change at the leadership level. “CHROs must stop thinking of themselves solely as policy enforcers,” she says. “Too often HR is still seen as a gatekeeper of rules and regulations, which can truly be a barrier to truly strategic conversations.”