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Getting to Know the Business of HR

Today’s top people leaders must understand the real-world impact of their work, study functional success metrics, and drive key organizational objectives to rise through the HR ranks.

By Darcy Mackay

People leaders exert enormous impact on their organizations. They act as talent experts, risk managers, brand evangelists, and cultural architects, all at once. But while they may rise through the ranks, the best HR leaders rarely gain those strategic skills in departmental meetings—they acquire them by exploring and learning their businesses. The people leaders who best understand how employees impact the customer experience become the most outstanding at defining roles and goals, recruiting, training and advancing the right people, and distilling and preserving company culture. And with the right technology in place, today’s HR professionals are uniquely positioned to not only execute their roles, but also to unlock a new superpower—a real-time understanding of performance in context.  

Understanding Real-World Impact 

It might sound obvious, but people leaders must start with a foundational knowledge of the core business. This includes knowing the ins and outs of the product or service and the value the organization is delivering to customers. To empower the right people in their organizations, HR leaders should fully explore the pain and problems the end customer wants to solve, the products and services that drive the most customer value, and how employees affect outcomes and satisfaction.  

Some examples: A recruiter for a short haul trucking company can take a ride with a driver on their delivery route for the day. The HR team at an AED software company can visit a newly constructed building designed with their application. A people leader at a company selling HVAC systems can take its team to the hospital NICU where their chiller is keeping premature infants safe. HR organizations simply become better at hiring and developing the best talent when they fully appreciate why their company’s work matters and when they can also bring a more nuanced understanding of the skills employees need to solve on-the-ground problems. 

Power in Performance Management 

Though the HR team can’t possibly be there to see every impact each employee makes, performance management is being remade by access to real-time data. Once characterized by tedious and stressful review cycles requiring HR pros to chase managers for evaluations with questionable ties to organizational success, performance management is no longer about delivering one-off reviews that remain in the abyss. Key performance indicators (KPIs) in every department are increasingly well-defined, trackable, and correlative with business outcomes. Success metrics improve performance within the HR function and cue the conversations and insights that improve each department’s performance.  

 Peeking Behind the Curtain 

In every department, KPIs set clear, measurable objectives for each role and individual. In many cases, these KPIs can be tracked directly by the software suites that each department and role use most often. HR leaders should maintain high visibility into KPIs and progress against objectives in their own department, like employee turnover rates, time to hire and fill roles, training completion rates, absenteeism rates, and employee satisfaction scores. Being as up-to-date with other departments’ progress in meeting KPI objectives is just as important to achieving a holistic approach to managing the workforce.  

Functional leaders are tasked with aligning these metrics with the company’s strategic goals, but people leaders can review them to learn why they are chosen and leverage this understanding to identify better internal and external candidates. These dialogues can also reveal gaps in team performance that can be addressed through training and development programs, helping people leaders ensure that their workforce is continually improving and adapting to meet the business’s needs. 

Overcoming Hurdles 

But there’s more to it than dialogue. In many organizations, because each department’s systems are often separate and siloed, getting continual access to performance data can be difficult. While some platforms offer reliable integration points, many require manual intervention and data re-entry that can bog down managers and HR leaders. 

A new trend is emerging—and in the fastest growing companies, HR is leading the way in ushering in this change. Once left to the IT department, people leaders are now playing a role in driving enterprise software decision-making that goes beyond the HR department. They are advocating for platforms that enable their organizations to seamlessly ingest metrics from each functional system to inform individual performance assessment and better manage organizational performance. They’re moving away from siloed enterprise systems that are blind to one another and investing in systems that can deliver automatically populated, real-time dashboards displaying performance against KPIs in every department, function, and role.  

With timely, reliable, and role-specific metrics, HR leaders are not only improving the efficiency and effectiveness of recruitment and development, but they’re also enhancing manager effectiveness as well as employee satisfaction by agreeing clear expectations, opportunities for advancement, and targeted training programs.  

The best people leaders are now using technology to unlock their superpower—the ability to understand individual and departmental performance across the entire organization and to become a superior source of organizational and strategic context. 

Darcy Mackay is senior vice president of HR and client services at Rippling.  

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