Organisations with a strong talent recruiting strategy grow their revenue 3.5 times faster than those without. As HR leaders, it is crucial for us to effectively demonstrate these facts, showcasing our crucial role in the boardroom.
There is no doubt that human resources add value to organisations, but defining and quantifying that value can be difficult. When HR aren't in the boardroom to influence the direction of major initiatives, HR leaders miss a huge opportunity to improve the value they add, not only to their department but to the business as a whole.
There isn't a company in the world that doesn't say something along the lines of "people are our most valuable asset." And, in general, the person with the most responsibility for people are HR leaders. So, of course, HR can add value by assisting organisations in finding, hiring, motivating, and retaining the right people in the right place and at the right time.
The HR function's greatest responsibility, now, is to articulate how talent attraction, conversion and retention strategies drive their organisation forward. Even at the highest levels, this is a challenge. Currently, only 5% of boards have a CHRO.
Here are some recommendations to ensure that your worth, as an HR representative, is recognised and appreciated by upper management:
Begin with Business Acumen
If you work in human resources, you've probably heard some variation of management consultant and author Peter Drucker's famous quote, "Culture eats strategy for breakfast." While this is often true, it should be followed by the phrase "But strategy is still important."
The value of culture can be effectively communicated through business outcomes, but it becomes challenging without a thorough understanding of those outcomes. You must understand how your company generates income and how your decisions affect these revenue streams. This necessitates leveraging the right technology.
Business outcomes, such as revenue growth, profitability, customer satisfaction, employee engagement, and innovation, are tangible and quantifiable indicators of an HR team’s performance. To effectively communicate your value, you must use technology to gain access to data in order to demonstrate and articulate the direct link between HR initiatives and business outcomes.
This requires a comprehensive understanding of your organisation's key performance indicators. By analysing data, leveraging technology, and gathering feedback, board members can see the correlation between HR activities and business outcomes. This information can then be used to highlight the impact of your department on the organisation's success.
In addition to understanding the impact of HR activities, it is essential to have a clear grasp of the financial aspect. Knowing your cost per hire per channel provides critical insights for budgeting, forecasting, and understanding expenditure. By effectively tracking recruitment costs across different channels, you gain the ability to allocate resources strategically and identify the most cost-effective channels for talent acquisition.
This information enables you to make informed decisions, optimise budget allocations, and maximise recruitment initiatives' return on investment (ROI). You can plan for expenses and effectively manage your budget by estimating the financial implications of hiring decisions. You gain the ability to make informed projections, align HR initiatives with business goals, and save money through initiatives such as retention and internal mobility by leveraging technology and data.
Talent attraction metrics
Executives rely heavily on analytics to inform their decision-making process in today's data-driven business environment. As a result, it is critical that you demonstrate that all major decisions will be based on thorough data analysis. Data-driven recruitment initiatives employ metrics to showcase the comprehensive monitoring and measurement of all critical factors.
This approach will provide you with a thorough understanding of your organisation's current situation, allowing you to comprehend and communicate any HR challenges. If you present data that illustrate the current state of affairs, along with a clear plan for how HR can address business challenges, your executives will understand why you need to be a strategic member of the executive team.
Return on investment (ROI) is one of the most calculated ratios in business. It is valuable because it allows for the comparison of various programmes across various functions by weighing their costs against their outcomes. To align talent strategies with business goals and demonstrate the value of human capital investments, the ability to calculate the ROI of recruitment initiatives is critical.
A critical component of maximising ROI in recruitment is having a clear understanding of your expenditure: what you are spending, where you are spending it, and why. This necessitates a thorough examination of channel costs, allowing you to compare and evaluate the effectiveness of various recruitment channels.
You can optimise your return on investment for both spend and hires by determining the costs associated with each channel and understanding the corresponding outcomes. When you present data on the estimated impact of a proposed initiative on revenue, cost savings, or other key performance indicators, executives can see the value of investing in HR.
By presenting a comprehensive set of metrics that cover various aspects of your proposed initiative, you provide executives with a comprehensive view of its potential impact on the organisation.
How to get your voice heard
As an HR leader, possessing the ability to articulate the firm's business objectives and having a deep understanding of the technology landscape relevant to the industry are crucial attributes that elevate your value within the organisation.
By aligning your HR strategies and initiatives with the overall business goals, you demonstrate a holistic perspective that resonates with your higher-ups and positions you as a strategic partner to the chief executives.
Ready to take your HR leadership to the next level? If you enjoyed this blog, you should definitely check out our detailed report on "How to Get Executive Buy-In by Creating a Compelling Business Case." Discover powerful strategies and insights that will help you secure the support and resources you need to drive meaningful change in your organisation.