HR awakened - The benefits to businesses when HR moves from back office to boardroom

The role of the People function is changing. No longer can HR be stuck in the back office performing administrative tasks, and is increasingly required to contribute towards strategic decision-making. It’s essential that businesses looking to succeed and grow are aligned with these changes. But this cannot be done without freeing up as much time historically spent on manual, admin-heavy tasks as possible. Indeed, nearly two thirds of HR managers* say that admin tasks prevent them from investing time in strategic HR, so something needs to give.

If this can be negotiated successfully, the advantages of having HR at the boardroom table are numerous. All metrics and research point to the fact that people-first organisations grow faster, are more profitable, and boast happier, healthier employees. And the only way to get people-first is for HR to have a seat at the decision-making top table. So let’s take a look at what’s considered the historical norm, how we get to an alternative approach, and the benefits of doing so.

The reactive HR status quo

HR has traditionally been seen as an administrative business function, rather than one that makes strategic decisions. On and offboarding employees, administering payroll, managing leaves and absences, dealing with staff disputes…these are just some of the predominantly reactive tasks that HR has typically been responsible for. Decisions are made as required, or based on prior experience, and usually following pre-set patterns and procedures. 

But many HR leaders - indeed, business leaders too - are asking themselves how HR can be more strategic. Over half of C-suite respondents to a *Personio survey conducted in 2023 said that they don’t get enough input and advice from HR. Coupled with our earlier assertion that around two thirds of HR managers feel they don’t have the time to invest in strategic HR, and it’s easy to see how something needs to change.

Of course, the tasks mentioned above are often essential for making businesses function, so it’s perfectly normal to be doing this stuff. HR leaders and teams need to get to a place where there is more time and headspace for strategic HR planning and work, so it’s about redressing the balance. 

Let’s delve into the question of ‘how’.

What’s the alternative, and how do we get there?

The natural opposite of reactive is proactive, and the only way to get to this alternative approach is by freeing up some of the time normally taken up with those status quo tasks. And how do HR teams do that without sacrificing some of the essential things that keep businesses ticking along? By streamlining and improving the processes, of course.

When considering how HR can be more strategic, and getting those feet in the boardroom door, the key is to assess which repeat processes are taking up the most of your time, which are the least enjoyable, and which can be automated or streamlined. 

Take managing payroll, for instance.

One head of HR we work with used to spend a week every month working on payroll-related tasks. Another HR generalist complained of feeling like they were ‘running payroll constantly’. Using payroll software that’s simple to operate, integrates with other HR workflows and offers a wealth of insightful data, these businesses have been able to save up to 80% of the time they previously spent on payroll, as well as getting closer to the C-suite.

“I can pull a lot more data much more easily now…I can put data up in front of the Exec and it’s made a real difference,” says Fiona Mason of RDT on using PayFit to get those strategic HR conversations going.

Imagine what strategic initiatives you could work on with those extra days back in your calendar each month. 

We’re talking about:

• Employee health & wellbeing - For example, developing a truly flexible working program, working with local gyms on discount packages, creating mental health support resources, and setting up fruit & veg box deliveries. 

• Learning & development - It’s nearly always more cost effective (and rewarding) to nurture and develop skills from within. Think lunch & learn knowledge sharing sessions, professional development courses and mentoring programs.

• Retention strategies - In tough economic times, it’s essential that you’re holding onto your best talent, and creating a happy environment for them to shine, without breaking the bank. Part of this is getting creative with your retention strategies - so this could be extra annual or parental leave, a one-off bonus for lower earners, and better market analysis to ensure you’re fairly rewarding your people. 

• Digital transformation - Technology can help HR leaders get more strategic, by providing accurate insights to help teams make those data-driven decisions alongside Leadership.

The benefits of doing more strategic HR work

Behind the growth and development of every business is a strategy that dictates how that business will get there. 

Research consistently shows that organisations employing a people-first strategy are more profitable, productive and happy. So it’s easy to see how the most successful businesses call upon HR leaders to lead the way from a strategic perspective. 

The benefits of an HR function that is able to work more strategically can be felt both at the individual / team level, as well as across the wider organisation. Here’s just a few examples:

Strengthened relationships

Working strategically demands brainstorming sessions, and for teams to be aligned on the goals. This helps build bonds and a new level of understanding within the HR team.

A reduced level of burnout

Reactive work is often repetitive, and repetitive work can be exhausting. Thinking strategically gives teams breathing space to step back and look at the bigger picture. Doing the same thing over and over again, sometimes with seemingly little long-term impact, can be frustrating. Conversely, knowing that your strategic initiatives can have a direct impact on the success of the business is immensely rewarding.

‘HR in the boardroom’ becomes a reality

Displaying strategic traits shows business leaders that HR can play a central role in work that will influence decision-making. This makes it more likely that you’ll be involved in those discussions in future.

Employees are happier and more engaged

Strategic HR work is exciting to both those doing it as well as those on the receiving end, and both the anticipation of genuine people progress as well as the (hopefully successful) outcome will generate happiness and engagement. Strategic work tends to revolve around shared goals. So when HR’s work is in harmony with the goals of the individuals within a business, it becomes easier to achieve those. Happier, more engaged employees will want to do their best work for you.

Company goals are realised faster

Not having the time to be strategic means it’s difficult to set mid to long-term goals. With less time spent on the reactive stuff, it’s possible to spend more time working towards those shared objectives.

Getting HR a seat at the boardroom table

When it comes to making the concept of HR in the boardroom a reality, it works both ways. The C-suite needs to be open to and help facilitate the process, whereas HR must create the processes and initiatives that will help win the buy-in and trust from the C-suite. 

This includes the Exec removing any barriers to HR’s seat at the boardroom table, as well as dedicating budget to the digital transformation required to free up HR’s time to take that seat. From HR’s side, you’ll need to align with the initiatives and thinking that the C-suite wants to see.

You can find more detailed guidance on how to help make the HR in the boardroom dream a reality by downloading Personio’s guide, Closing the HR-to-CEO Gap - How to Build Tomorrow’s Workplace Today, right here.