What if C-suite executives encouraged HR managers to become strategic leaders rather than expecting them only to handle day-to-day administrative tasks? What if they recognized that HR drives value, especially when budgets are tight? 

The results would be game-changing, said Emily Diaz, the VP of Transform at 15Five. Diaz led a thought leadership spotlight session titled, “The Case for Strategic HR: How to Translate HR Programs Into Business Outcomes for Executive Buy-In” during From Day One’s August virtual conference. 

“We know strategic HR has a massive impact, particularly around engagement,” Diaz said. “Engaged teams, it has been discovered, are 23% more profitable and 18% more productive.” 

However, HR managers often have trouble selling the idea of strategic HR to company leadership. Diaz, who serves as an advisor for HR leaders, said they want to focus on things that are most important to the entire business. To do this, they need to establish trust with their leadership team, but they tell Diaz that CEOs and other executives won’t give them the time of day. Sometimes, those leaders are even considering cuts to the HR team. 

Only 51% of HR leaders surveyed this year said they felt valued by their leadership team, according to HR Dive. And they aren’t just imagining things. Research shows 46% of business leaders see their HR function as being strategic, according to 15Five. However, functions like finance operations and supply chains scored far higher in those perception tests despite how important HR is to companies.

“It’s no wonder that 98% of HR leaders are feeling burnout at a time when they’re being asked to deliver more value than ever before to their organization,” Diaz said.

Proving the Strategic Value of HR

One way HR managers can show they have a role that goes beyond administration is to consider how other company operations that are deemed strategic do this. For example, a CFO can use a P&L or even a cash flow statement to explain exactly how the business is performing to the leadership team.

“If you are able to use data and frame your work through the lens of business outcomes, that’s when you're going to get the buy-in from your leadership team,” Diaz said. 

Valuable data helps answer crucial questions such as where to invest to increase team performance, which managers are the most effective, and how the team can amplify their efforts. “The right data helps you to take actions that support your business outcomes. It’s data that informs future-facing decisions,” Diaz said. 

Rocks, Pebbles, and Sand

Diaz presented a metaphor from Stephen Covey to help HR managers frame their work in a strategic context. The idea is to imagine HR as a jar containing rocks, pebbles, and sand. The sand represents small items on an HR team’s constant to-do list, such as resolving issues with benefits. The pebbles are administrative tasks, smaller chunks of work associated with larger programs. The rocks are outcomes.

Many managers put the sand in first because there is so much of it. But that doesn’t leave any room for the rocks and pebbles. This is a crucial mistake because executive leadership teams care about the rocks (the outcomes). Instead, teams should put the rocks in the jar first and let the pebbles and sand settle around them, Diaz said. 

15Five's research shows that the outcomes HR drives for a company are maximizing employee performance, improving employee engagement, and reducing turnover. Suppose an HR team wants to show the C-suite how their department can reduce turnover. In that case, they can point out which of their programs and initiatives, such as training, development, benefits, perks, recruitment, selection, and performance management, help achieve that goal.

This is where data comes into discussions with company leadership. For instance, replacing an employee can cost a business anywhere from 50% to 400% of that worker’s annual salary, according to Diaz. 

Empowering Managers to Help

Company managers have an essential role in assisting HR with achieving outcomes. For instance, managers solely determine 70% of the variance and engagement at a company.

“Many HR leaders that we speak to now are starting to empower their managers to do some of the things that were normally the domain of HR,” Diaz said. This includes encouraging managers to have more autonomy with team cadence or performance review conversations.

“I can't tell you the number of times I've heard, ‘I really wish my managers would be more proactive with taking care of these little things, because they’re the ones who really are in the power seat,’” Diaz said. “So, we're seeing that managers are able to take some of it.”

Of course, the managers don’t have the expertise for some tasks, which remain the responsibility of HR compliance and administrative teams. “But, if you have the framing of your outcomes first, you’ll start to see that the things that were normally considered just tactical are going to fall into place,” Diaz said. “You might even find that there is a natural way to execute them with the prioritization of the outcomes in mind.”

Editor’s note: From Day One thanks our partner, 15Five, for sponsoring this thought leadership spotlight. 

Mary Pieper is a freelance reporter based in Mason City, Iowa.