Optimize the HR Department to Support the Organizational People Strategy Enhance your HR departmental structure, process, technology, and capability to successfully execute high-value strategic initiatives. McLean & Company is a research and advisory firm providing practical solutions to human resources challenges via executable research, tools and advice that have a clear and measurable impact on your business. © 1997-2016 McLean & Company. McLean & Company is a division of Info-Tech Research Group. SAMPLE Learn about becoming a member

Our understanding of the problem CHRO/VP of HR Assess and engage your HR department in an optimization project to ensure you are prepared to support the organizational people strategy and can deliver effectively on people initiatives. Manage HR departmental change. HR Function Leaders HR Team Members Drive efficiency of both transactional and strategic activities within their function in the aim of supporting people initiatives. Optimize their structure, processes, technology, and capabilities to improve efficiency. Successfully adjust to departmental change. SAMPLE

Executive summary SAMPLE A people strategy guides department optimization efforts, allowing you to assess the effort required to complete your people initiatives and prioritize accordingly. While the push is for HR to be more strategic, HR also needs to ensure transactional activities are being done efficiently. Increased transactional efficiency gives HR the ability to focus on the most impactful and highest value strategic activities. Regular, open, and honest communication ensures your departmental activities are aligned with people strategy, thereby driving organizational results. HR departments become trapped in administrative activities, forcing them to abandon strategic ones. Below average effectiveness scores for almost all HR strategic areas (strategic planning, organizational design, change management, and metrics and analytics) suggests substantial room for improvement (McLean & Company Trends and Priorities 2016, N=555). An aligned and optimized HR department supports the people strategy to achieve organizational goals. Once strategic priority areas are identified in the people strategy, HR then has to identify how the department can best support the execution of the people strategy. While the push is for HR to be more strategic, HR must first ensure transactional activities are being done efficiently. Through efficiencies, HR will free up resources to focus on high-impact and high-value strategic initiatives. Increasingly, HR must become more efficient and effective in order to meet growing demands. An effective HR department supports organizational goals by evaluating and matching the HR structure to that of the organizations, optimizing transactional HR activities, and building appropriate HR capabilities. SAMPLE

Guided Implementation McLean & Company offers various levels of support to best suit your needs Guided Implementation “Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track.” DIY Toolkit “Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful.” Workshop “We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place.” Consulting “Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project.” Diagnostics and consistent frameworks used throughout all four options SAMPLE

Use McLean & Company’s process to optimize the HR department and support the organizational people strategy People Strategy People Action Plan Identify Departmental Strengths and Opportunities 1 Implement and Manage HR Change 5 2 Design the Appropriate HR Structure 3 Refine HR Processes and Examine HR Technology  4 Assess Required Departmental Capabilities  SAMPLE

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Before assessing and revamping your HR department, ensure you have a well-defined people strategy What is a people strategy? It’s the process of linking HR management and practices directly to your organization’s strategic plan. People strategy is integrated with the organizational strategy to equip the organization with a competitive human capital advantage and drive the HR function. People strategy ensures HR focuses on high-priority and impactful initiatives that drive organizational goals. To develop a people strategy see McLean & Company’s blueprint, Develop an Integrated People Strategy. In this blueprint we will gain an understanding of how your department can best support the people strategy by optimizing structure, capability, process, and technology, and optimize your department to deliver on people strategy goals. This blueprint will walk you through how to align and optimize your HR department to support the people strategy and achieve organizational goals. With strategic priority areas identified in the people strategy, HR then has to identify how the department best supports the execution of the people strategy. McLean & Co. Insight HR departments are expected to be well integrated within a organization rather than operating as a disconnected and isolated set of HR practices. Therefore, it must have a strategy that determines where it is headed, a set of objectives that focus on strategic people priorities, and a structure that allows it to accomplish its goals. SAMPLE

HR Strategy Area Effectiveness HR departments often become trapped in administrative activities, forcing them to abandon strategic ones There is a disconnect between HR and its stakeholders on HR’s strategic impact. Organizational leaders are more satisfied with HR’s performance of administrative duties than strategic initiatives. HR stakeholders are twice as likely to be dissatisfied with the quality and value their HR department provided in programming & planning compared to administrative duties. Furthermore, according to McLean & Company’s 2016 Trend and Priorities Survey: Non-HR respondents are 1.8 times more likely than HR to see their HR department as tactical. In contrast, strategic HR departments are rated as effective 2.4 times more often than tactical HR departments. (McLean & Company HRSM Survey, 2016, N=1,471) HR Strategy Area Effectiveness Average of all HR areas: 34%. Effectiveness ranking of all 30 HR areas. Due to ties, rankings range 1 to 28. (McLean & Company Trends and Priorities 2016, N=555) 11th 20th 21st 23rd 28th Below average scores for almost all HR strategy areas suggest substantial room for improvement. SAMPLE

A high-performing HR department drives strategic priorities while being operationally efficient to provide maximum value An integrated people strategy provides the HR department with a strategic focus: maximizing human capital’s contribution to the bottom line. While the push is for HR to be more strategic, HR must first ensure transactional activities are being done efficiently. Through efficiencies, HR will free up resources to focus on high impact and high value strategic initiatives. While most respondents predict an increase in organizational revenue, profitability, and overall headcount, 70% of respondents expect no change in HR headcount. (McLean & Company Trends and Priorities Survey, 2016) Exceptional HR organizations spend 37% less, up to $17 million, and use 31% fewer FTEs than the typical company (Bression et al., 2015). HR departments that deliver constant value must continually evolve to match changing business conditions (Ulrich). “Redefining what it means to be a strategic HR department” is the top emerging trend within the HR strategy function (McLean Trends and Priorities Survey 2016, N=476). Therefore, HR must become more efficient and effective in order to meet growing demands. Evaluating and matching the HR structure to that of the organization. Optimizing transactional HR activities. Building and developing appropriate HR capabilities. Ensure the HR department supports organizational goals by being closely aligned with the people strategy. An effective HR department supports organizational goals by… SAMPLE

McLean & Company Helps HR Professionals to: Empower management to apply HR best practices Develop effective talent acquisition & retention strategies Build a high performance culture Maintain a progressive set of HR policies & procedures Demonstrate the business impact of HR Stay abreast of HR trends & technologies  Sign up to have access to our extensive selection of practical solutions for your HR challenges Learn About Becoming a Member “Now, more than ever, HR leaders need to help their organizations maximize the value of their people. McLean & Company offers the tools, diagnostics, and programs to drive measurable results.” – Jennifer Rozon, Vice President, McLean & Company Toll Free: 1-877-281-0480 hr.mcleanco.com SAMPLE