Aligning Hr Strategy With Business Strategy Ppt – Apply a global mindset to your HR priorities. McLean & Company is a research and consulting firm that provides real solutions to human resources challenges through actionable research, tools and advice that have a clear and measurable impact on your business. © McLean & Company. McLean & Company is a division of Info-Tech Research Group
2 Introduction Global HR functions must be fully aligned with the company’s HR strategy to be successful. This means introducing new global HR functions as well as determining the right global vs. local balance for all HR activities. This study is designed for: This study will help you: Organizations that are about to expand their business globally. Organizations that are already global but operating globally have an opportunity to improve the effectiveness of their HR function. HR leaders who want to optimize and align their HR functions in the context of globalization. Review the organization’s global business strategy. Align HR policies with global business strategy. Decide on three key global HR themes. Monitor your HR skills in a global context. Determine your global HR transition priorities.
Aligning Hr Strategy With Business Strategy Ppt
3 Executive Summary Align the global HR function with the global business strategy to ensure ongoing HR relevance. Businesses are globalizing to expand into new markets, reduce labor and operational costs, and increase efficiencies scarce in their traditional locations. An increasingly geographically dispersed workforce is affecting how HR addresses its own roles and where those HR roles are located. HR is no longer in the same place as employees, impacting interactions, policies and processes. Ideally, HR leaders are involved in developing the overall business strategy, but this is not always the case. Understanding your company’s strategy is the first step in developing an effective, aligned and strategic HR function. Effective global HR sets standards that support important decisions in three key areas: the extent to which HR activities need to be controlled globally to ensure consistency, or tailored for local relevance. The extent to which HR should continue all traditional HR activities or outsource certain activities to supervisors or outsourcers to maximize effectiveness. The extent to which HR activities must be performed by HR staff who are physically co-located with managers and employees and which can be performed remotely. A globalized HR function must have three key HR capabilities to be successful: Integrate a global mindset by accepting the concept that there are differences between the global and local levels and recognizing those differences and leveraging them as a strategic business advantage should. . Delivering analytical insights on a global and local scale to inform business solutions and decisions, thereby increasing the strategic value of HR. Communicating with the intention of overcoming the complexity of the global environment.
Organizational Strategy: Definition, Types & Importance
If you are a global HR organization, global issues should be informed and influenced by your broader strategic planning process. It pays to discuss global HR issues and implications to view strategic HR planning through a highly focused lens. If you already have an existing HR roadmap, use it as a basis for a more focused global HR discussion. After making key global HR decisions, review your strategic plan to update it in light of new global insights and plans. If you don’t have an HR strategic plan, start developing one and use this set as input to the strategic planning process. Global Analysis Strategic Planning Strategic Execution To help create a more comprehensive HR strategic plan, download McLean & Company’s solution pack: Create an HR Strategic Plan.
Align HR policies with global business strategy. Decide on three key global HR issues. Monitor your HR skills in a global context. Determine your global HR transformation priorities. Learn more about globalization trends. Understand why globalization is affecting the HR function. Learn the benefits and challenges of aligning your HR function with global business strategy. Find out how McLean & Company’s processes and tools can help you align your HR function with global business strategy.
6 Companies are going global to expand into new markets, reduce costs and access larger talent pools. Globalization focuses on organizational design and affects organizational structure, strategy, culture, roles, processes and people. Historically, companies have globalized, expanding from their home country to one or more countries to find new markets for their products or to take advantage of lower labor and operating costs. Today’s companies are choosing to go global for a different reason: to take advantage of capabilities that may be scarce in their traditional locations. This will only continue due to the lack of manpower and skills in key sectors. “Virtualization” trend: As companies look for ways to reduce costs specifically for brick-and-mortar operations, technology is paving the way for employees to work virtually from home or other flexible workspaces. Similarly, technology allows people in different countries and locations to communicate with each other and even form virtual teams. Global vs. Local Trends: Historically, organizations have strived for global consistency and control Now, in some sectors such as financial services, companies are prioritizing local relevance Organizations will struggle to strike the right balance between centralized control and local flexibility for their geographically dispersed operations and find employees. + None of these trends are new, but they are increasing. Their interaction will further complicate population management. Consequently, globalization will have a significant impact on human resource performance. Increasingly, HR leaders are being promoted with global responsibilities. 45 percent of respondents have assumed a global role within the last two to three years, while 40 percent have assumed such a responsibility within the last 12 months. – Source: Mercer, “HR’s Expanding Frontiers: Local to Global Strategic Partners.”
An increasingly geographically dispersed workforce is having a significant impact on the HR function. A 2012 study by KPMG found that the workforce has experienced significant geographic shifts over the past three years. Globalization factor as % factor today Working across borders (e.g. collaborating across geographic teams) 71% Developing HR policies to accommodate the global nature of the workforce 59% Transferring key talent between cross-border operations 57% Sourcing is key to our talent Out of Home Markets 55% Cross-border reporting lines 54% Adding new cross-border offices 52% Where and how employees work is changing at an alarming rate. Employees work in global teams and move between countries. As a result, both the HR department’s approach to its own role and where that HR role resides must change. HR is no longer in the same place as employees, impacting interactions, policies and processes. …Many strategic business commitments for HR are becoming global, including governance and compliance, risk management, performance orchestration, talent management, and global mobility. – Source: Mercer, “HR’s Expanding Frontiers: Local to Global Strategic Partners.”
Change Strategy And Alignment
The business, the HR function and the people all benefit from a strategically aligned global HR operation. HR will work more cost-effectively because they: Have better, data-driven visibility into global and local spending patterns. Work more efficiently by reducing redundancies, aligning conflicting agendas and eliminating waste. Attract and develop local talent more effectively. Globalization offers HR an opportunity to change. How? If you haven’t already, globalization presents the perfect opportunity for HR to separate the strategic and administrative aspects of their business so both can work better. For more information, see the McLean & Company Solution Pack Align HR’s role with organization by transforming HR from functional to strategic. HR will remain relevant to companies and employees because it: Will create a shared corporate identity and culture that does not devalue their role or perspective on local operations. Understand the impact of global decisions on local actions and people. Understand the impact of local operational realities on an organization’s ability to execute a long-term global strategy. Offer development and other programs designed to meet the needs of a wide variety of employees. Identify knowledge and innovations generated locally and make sure you share them with others worldwide. … HR effectiveness results not only from the collective talent of the company’s workforce, but also from the coordinated use of that talent throughout the company’s global network of relationships. The effectiveness of such relational coordination is a function of the cultural context of the global organization. – Source: Timothy Kiessling and Michael Harvey, International Journal of Human Resource Management
HR leaders must prioritize alignment with global business strategy or risk negatively impacting globalization efforts. However, only 40% of HR professionals said that aligning HR and business is a top or medium priority for their organization. This number is very low and poses a risk to global HR operations. (Source: McLean & Company, 2013; N=94). Global/local imbalance: Globally dominant business models may be too diversified for local managers to manage effectively, posing risks for globalization efforts. Even when global controls are imposed, having a vision can be challenging for leaders
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