In my last blog article, I explained how you can cut and paste your way to a compensation philosophy. If you find yourself in a lonely HR office of one or you are building a foundation for documented, disciplined practices, my recent recommendations can set you up quickly. You'll have accomplished something important by writing a candid definition of your current practices and philosophy. But don't imagine you'll be praised for your strategic insights when you've finished the project.
A better label for this work is that "you're getting your house in order." A fruitful, but not typically strategic, exercise. In comparison, strategic insights occur when you put your compensation practices and philosophy in a new light, where the illumination falls on the challenges your company will face tomorrow. If you don't get to that level of analysis, you will not yet be acting as a strategic thinker.
Don't know where to start? How about kicking off with a definition of "strategic partner" coming straight to you from Compensation Cafe. Be sure to read the article and note that the heart of the matter is: "Being strategic means going out on a limb to educate your executives about how your company can set its sights higher." Let's look at some ideas of how you would go about it.
One strategic role is translator. You might be hearing, "I'm not finding the talent I need" from your executives, but odds are a more precise look would indicate they are starting to identify skill gaps. Skill gaps are becoming a problem across industries and they are predicted to grow in the coming years. 43% of companies report current skill gaps, with another 44% expecting them in up to five years. Odds are your executives are talking about them now. If you can get them thinking about skill gaps, you can help them move on to identifying where they are experiencing them and where they are likely to come from in the future -- technology shifts or business revamping.
Another strategic area for HR is analytics. For example, identifying talent needs for the next two to three years (which you can then translate into recruiting and compensation practices). How do you discover them? HR should lead this research. Interview key line managers and read business planning documents that you borrow from executives. Outline what the business goals are now, and what they will be three years from now. What talent and skills do you need to help you make that three-year transition? Do you have it now? Can you grow it, or will you need to recruit it? Answer those questions and then turn them into recommendations for recruiting, compensation, training and career development--for example, highlighting key skills when setting performance goals and rewarding when they are used effectively.
The optimal role to work towards is trusted advisor, which involves deep relationships with the executive team. Of course, the best time to start is now, to build toward that role. If you find yourself in a situation where, let's face it, executives won't give you the time of day to brief you on business issues, try to turn the tables. Distribute one of these articles ("Are we long--or short--on talent?" and "Beyond hiring: How companies are reskilling to address talent gaps" which includes the statistics shown above) and schedule a discussion with the most welcoming executive. If you have a good discussion, ask if she or he would help you host a similar discussion with the larger executive group.
Or consider this other alternative if you are more comfortable with your executives. Use the analytic exercise described above as a "learning experience." Invite the group to join you in discussions for each milestone draft of your work: 1) outline of future business challenges, 2) analysis of staffing impact in key aspects of business, 3) skill gaps and talent needs, 4) immediate and medium-term compensation and other Human Resource initiatives. At the end of this process you will not only have facilitated a strategic look at compensation, but also built closer relationships with the executive team.
Margaret O'Hanlon, CCP brings deep expertise to discussions on employee pay, performance management, career development and communications at the Café. Her firm, re:Think Consulting, provides market pay information and designs base salary structures, incentive plans, career paths and their implementation plans. Earlier, she was a Principal at Willis Towers Watson. A former Board member for the Bay Area Compensation Association (BACA), Margaret coauthored the popular eBook, Everything You Do (in Compensation) Is Communications, a toolkit that all practitioners can find at https://gumroad.com/l/everythingiscommunication.
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