Benefits October 17, 2006

Strategic Plan Boosts HR Contribution

October 17, 2006 (PLANSPONSOR.com) - A new survey from the Society for Human Resource Management (SHRM) found that HR departments with a strategic plan say they are more involved with and have a greater impact on various areas within their organizations.
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According to the survey report, HR professionals from departments with a strategic plan in place were more likely than those without a strategic plan to rate their function as being involved to a larger extent in all 12 corporate areas addressed by the survey. The areas rated highest by HR professionals from departments with and without a strategic plan included:

  • HR works closely with senior management in implementing organizational strategies (68% for HR departments with a strategic plan and 38% for HR departments without a strategic plan);
  • HR works closely with senior management in creating organizational strategies (56% and 27%);
  • HR has achieved a level of respect that is comparable with other departments (49% and 26%);
  • Senior management realizes that investments in HR make financial sense (47% and 27%); and
  • HR implements strategies and processes to drive business results (46% and 19%).

Three-quarters of HR professionals surveyed indicated their organization had a strategic business plan and more than half their HR departments had a strategic plan, according to the report. Among respondents that reported that both their HR department and their organization had strategic business plans, the majority indicated that HR’s strategic plan was aligned with the organization’s strategic plan.

Almost half of HR professionals reported their organization had an established method to measure the effectiveness of HR strategy through metrics and analytics. According to survey respondents, the functions HR departments used most frequently with metrics or analytics were recruitment and selection processes, performance management, compensation management/reward programs, benefits management and employee relations. HR departments with a strategic plan in place were more likely than those without a strategic plan to have established methods of measurements.

The barriers most frequently cited by respondents for making the HR function more strategic were their HR department’s strong focus on administration and the inability to directly measure HR’s impact on the organization’s bottom line.

The 2006 Strategic HR Management Survey report is available to SHRM members online for free at www.shrm.org/surveys . Non-members may purchase a survey by calling the SHRM Store at 800-444-5006.

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