Becoming a More Effective H R Business Partner

Becoming a more effective H R BUSINESS Partner can be accomplished by selecting the best H R project that will facilitate the best business value for the company and/or division.

Before proceeding, it is important to clarify two major terms.  First, real business value is achieved primarily when an H R project is directly-related to the achievement of one of the company or division’s specific business objectives regarding financial, operating or strategic matters.  Typically, it is achieved to a far less degree by improving an existing H R program or service which is usually only indirectly-related to the business in general.  Secondly, being directly-related means that the H R project is in support of a specific business objective which has a direct impact on increasing sales, improving cash flow, reducing costs, improving productivity, enhancing customer care, fostering new product development and market introduction, and so on.  In other words, the business.

Now, there are four steps to becoming a more effective H R Business Partner.

Step One – Spend most of your time and effort understanding the company and/or division’s business-related matters, and how H R might facilitate them, rather than achieving incremental improvements in existing H R programs and services.

When industry experts in the field of H R business partnership ask various H R Business Partner practitioners regarding what H R projects they are implementing within their company and/or division, here are some of the typical responses.

• instituted an improved recruiting and interviewing process in an effort to hire the best possible people.
• installed an upgraded talent management software package to better monitor the compensation equity and development plans of all key management employees.
• implemented a benefit enhancement that is designed to better attract and retain key technical and management employees.
• conducted a management training program designed to improve some critical soft skills.

While these and similar projects are likely viable ones, they are only indirectly-related to the business in general and can be successfully designed and implemented by the appropriate H R department staff with only minimal involvement of the H R Business Partner.  H R Business Partners should avoid spending a lot of time on such H R projects until a detailed examination of company and/or division’s business objectives and needs is completed.

Step Two – Enhance your practical knowledge or acumen in the financial, operating and strategic aspects of the company and/or division’s business.

First, the following data on the above aspects of the business should be compiled every fiscal year and placed into a reusable template, preferably at the end of the last fiscal year and just before the start of the new fiscal year. When collecting this data, the H R Business Partner must temporarily take off your HR hat and put on your business person’s hat. Such data gives the H R Business Partner the added advantage of being able to interact with the CEO and line executives solely on the business aspects of these items, as one business person to another, in addition to any interactions on the H R related aspects of any appropriate implementation.

Financial

• Net Sales or Revenue
• Operating Profit – both dollar and percent of net sales or revenue
• Net income – both dollar and percent of sales or revenue
• Net earnings (income) per share
• Cash Flow – dollar amount
• Major capital expenditures

Sales/Revenue

• Top ten customers by dollar sales volume
• Top ten products by gross profit margin percentage
• Major sales contracts up for renewal
• Customer Service improvement metrics

R&D and Product Development

• Major product development programs to be launched in the next few years
• New year product introduction and launch with the expected sales volume increase
• New year existing product enhancements with the expected sales volume increase
• Expected quality, reliability and performance specification improvements

Manufacturing

• Key quality improvement metric(s)
• Production efficiency improvement metric(s)
• Production scheduling improvement metric(s)
• Cost control improvement effort(s)
• Key Purchasing improvement metric(s)
• Key Inventory Control improvement metric(s)

Strategic Planning

• Anticipated acquisitions and their expected financial and market results
• Expected new product and/or market introductions
• Expected amounts of net income and earnings per share improvement

Secondly, the H R Business Partner should have a meeting with the CFO to understand the key numbers in: (a) the company’s current Income and Cash Flow Statements, and Balance Sheet and (b) the company’s upcoming fiscal year financial priorities. Then, he/she should meet with the COO to understand the key financial and operating business objectives of the company and/or division. Lastly, meet with the CEO to clarify the strategic business objectives for the company and/or your division.