Make HR a True Business Partner

ORLANDO, FLA.--An “HR business partner” is a strategic contributor who understands and plays a role in achieving the vision, mission, goals and results of the organization, explained Louisville-based consultant Sandy Allgeier, SPHR, at the start of her seminar, “HR Business Partners: A Consulting Skills Model,” on June 21 at the 2014 Society for Human Resource Management Annual Conference & Exposition.

Allgeier, who has more than 25 years of experience as a corporate HR professional at KFC, Providian and Atria Assisted Living, compared HR business partners to internal consultants who work with line managers and executives, helping them to better manage their people and teams, thereby improving business performance.

This requires a shift in HR’s perspective of itself. Often, HR professionals become consumed by day-to-day tactical business, whereas business partners bring HR input into strategy decisions right from the beginning, Allgeier said.

She outlined an HR model with three separate but overlapping spheres:

• An HR service center to handle everyday tactical HR (such as payroll and leave management). This function can be tiered, with an automated self-service portal and, for employees who need greater assistance, a call center operation.
  
• HR centers of excellence, responsible for areas that require subject matter expertise, such as managing compensation and benefit plans.
  
  
• HR business partners, operating as internal consultants assigned to heads of divisions or otherwise embedded within business units. While this might be the smallest of the three spheres in terms of personnel, it can have the greatest influence on the organization’s strategic success.

By building relationships throughout the organization, HR can more effectively aid managers with talent acquisition and employee relations, mitigate litigation risks, and improve awareness of business goals among managers and throughout the workforce, Allgeier said.

Connect with Finance

Becoming an HR business partner, however, requires a deep understanding of the business and its core competencies—the building blocks of how an enterprise succeeds in being profitable and (especially for nonprofits) fulfilling its mission.

This will necessitate becoming connected with finance—“Make the CFO your new best friend,” as one seminar participant advised. Allgeier acknowledged what’s often seen as a natural tension between the finance department, charged with controlling spending, and HR’s role managing staffing and providing a rewards mix and organizational culture that will attract, retain and engage talent. Nevertheless, she advised building a relationship that recognizes HR and finance are on the same team.

“You should know what the top three issues are for your company and its business units,” she instructed. Be sure to understand your organization’s competitors, she said, along with their (and your own company’s) strengths, weaknesses, opportunities and threats.

This entails being conversant with factors driving costs and revenue, and tracking other metrics that managers value, such as cost per hire, turnover costs and the return on investment of training. And it requires that HR professionals learn how to produce written business cases.

“A top mistake internal consultants make is waiting to meet with key managers until they have a specific need. Or deciding what line management needs and putting activities in place—and then talking to the line managers,” Allgeier said.

Instead, “Look for indications that something is being considered and bring an HR perspective and information to the right people. Provide this information upfront so it can be included in the decision-making process. Involve line managers through HR information systems, so they can access relevant transactional data.”

In short, Allgeier advised, “Think in terms of the enterprise, with solutions that respond to business needs.”

Stephen Miller, CEBS, is online editor/manager for SHRM.