What does the term 'strategic HR' actually mean to HR professionals? A study released today, explored how talent management and alternative service delivery models, such as outsourcing, can enable strategic HR.

Sourcing advisory firm EquaTerra and Human Resource Executive magazine have just announced the results of a comprehensive joint study surveying approximately 450 HR leaders, in both Europe and North America:

• 29%: vice presidents of HR
• 53%: HR directors or managers 

Overall:

• 72% of respondents said that becoming a leader in total talent management, (recruiting, performance, learning, succession planning), was deemed the most critical thing HR organisations could do to become more strategic. 

• 79% of study participants also said that total talent management was the activity that contributed the most to making HR strategic.

Stan Lepeak, EquaTerra’s managing director of research explains:

“Improving total talent management will be key for organisations and their HR groups over the next five years, as competitive differentiation and success typically hinges on talent capabilities. One process that shows potential in helping HR groups improve their talent management capability is the use of alternative service delivery models.”

• 58% of respondents felt their organisation’s executive management viewed HR as a strategic asset.
• 18% indicated it was viewed as a cost centre.

Although these are relatively positive numbers, the levels have changed little from those found in responses to the 2005 study, and depict that 40% of HR groups believe they are not viewed as strategic. 

Lepeak continues:

"Because the answer to what makes HR strategic depends on whose opinion is being asked, EquaTerra encourages HR leaders to define what strategic means, not only in the context of their department’s current situation, but also in the eyes of key stakeholders and decision makers within the overall corporation.’’

The study also found that the use of alternative HR service delivery models was not viewed as especially important in enabling HR transformation. The deployment of shared services scored a 3.1 on a 1- 5 scale (where 1 was not at all important and 5 was very important to making HR more strategic). 

Outsourcing supporting HR information technology applications and systems received a 2.8, and HR business process outsourcing scored a 2.3.  

It's important to note, however, that the use of alternative service delivery models, such as, shared services and outsourcing was more common and more highly regarded among respondents from larger organisations, and those in the commercial sector than those in the public sector.

Download EquaTerra's podcast on Outsourcing’s Role in Making HR More Strategic