Creating People Advantage 2014-2015

Creating People Advantage 2014-2015

          
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Creating People Advantage 2014-2015: How to Set Up Great HR Functions

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  • What Sets Great HR Functions Apart

    Based on BCG’s experience, and supported by the survey data, we see that great HR functions are critical differentiators that separate high-performing companies from the rest. Collectively, the three ideas below describe best-in-class HR functions.

    • Connect. An HR department needs to connect with internal clients to ensure that its HR and people strategies are clearly linked to the overall business strategy. A fundamental component of this is getting the basics right. That is, if HR is to have credibility as a true strategic partner with the business, it must first establish strong processes and develop core capabilities, particularly in the areas of recruiting and communication.

    • Prioritize. HR also needs to identify the most important and most urgent priorities for its organization and then target investments accordingly. As the survey findings show, talent management, leadership, and employee engagement are the topics that virtually all HR departments will need to focus on. Strong HR departments have precise and trackable leadership-development initiatives in place, along with enterprisewide training measures and firm control over internal mobility. These departments shape engagement and leadership behaviors to foster a more vibrant and productive corporate culture.

    • Impact. Robust HR departments generate and report people-based KPIs, which provide the data for formulating strategic actions and ultimately impact the business. This is particularly true for strategic workforce planning, which is increasingly important for most companies. People analytics—defined as the increased use of data to generate insights on people management processes—is now taking off in terms of use and importance. Just as other functions of a company increasingly rely on sophisticated algorithms in areas such as pricing and supply-chain management, HR analytics are becoming an indispensable tool to help HR functions impact the business.