Potential Roles of the Human Resource Management Professional in the Strategic Planning Process
Rowden, Robert W., SAM Advanced Management Journal
Organizations must consider many critical factors as they face the future. Technology is advancing at a frenetic pace, especially in relation to the transfer and accessibility of information and the increasing ease of establishing communication-networking facilities. The continuing removal of trade barriers and tarrifs, the consequent globalization of markets, the volatility of consumer demands within existing markets, currency fluctuations, and political upheaval are by now familiar characteristics of an environment in flux. The capability of people to cope and manage within such an environment is a vital element in the success of any business. The new business context is prompting managements to take a greater interest in the utilization of their organizations' human resources.
Because of this, the human resource function is playing a far more significant role in corporate strategic planning than ever before. Today's top company executives are increasingly looking to HR to improve the bottomline. The traditional HR functions of staffing, recruiting, compensation, and benefits are losing ground to a new generation of value-added core HR functions that include career planning, executive development, training, succession planning, and organization development. Insurance claims administration, outplacement services, employee assistance programs, 401(k) plan administration, dependent care assistance, and other nonvalue-added functions are being outsourced by many companies in an effort to become more competitive (Caudron, 1994).
Moving From Administrative Support To Strategic Business Partner
Tomorrow's competitive business environment will include HR as a strategic business partner and a bottomline decision-maker. In contrast to its traditional emphasis on personnel administration, HR's future role will be supporting a company's competitive advantage by providing high quality people and by helping business manager strategically plan the functions of those people within the organization. HR must shift from being an administrative support function to becoming partner in charting business strategy. This requires transforming the HR function into a strategic business partner that will positively affect a company's earnings.
HR must begin this transformation by understanding the company's business direction. This understanding includes what the company's product is capable of doing, the typical consumer of the product, and the company's competitive position in the marketplace. Also, the HR function must change from a staff function that delivers prepackaged HR services to a service that helps managers create customized strategic plans to influence the effectiveness of company performance.
A key factor in the process of integrating strategic planning with HR is ensuring that the HR staff recognize their roles as change agents and strategic business partners. This may be particularly difficult in a rapidly changing organization where the lack of stability tends to leave people with the feeling that they are victims of change rather than champions of it. However, one key to creating a successful HR function is to organize the chaos caused by change. This can be accomplished by forging ahead with innovative strategic plans that add value to the company instead of retreating into comfortable, traditional roles that will not effectively improve a company's bottom line (Cipolla, 1996).
Effective strategic planning involves analyzing current data and identifying trends that may affect a company's future performance. Next, it involves mapping out a strategy that will most likely result in a company's success over the long term. A study by Eichinger and Ulrich (1995) indicates that in the next five to seven years at least 10 profound changes will alter the course of businesses and the function of HR. They identify these changes as (1) global economic and financial, (2) technological, (3) political, (4) structural (to the business organization), (5) educational, (6) labor-related, (7) social, (8) conflicts due to globalization, (9) environmental, and (10) crime-related. …