HR as a Business Driver: Best-in-Class and Best-for-the-World Practices
Human Resources (HR) is no longer just a support function—it’s a critical driver of both business success and social impact. In today’s fast-evolving landscape, HR leaders are uniquely positioned to deliver outcomes that are best-in-class, supporting organizational goals, and best-for-the-world, prioritizing global responsibility.
Best-in-Class: HR as a Strategic Business Partner
To achieve best-in-class performance, HR must align people strategies directly with business objectives. This means leveraging data-driven insights to inform recruitment, retention, and engagement strategies. For example, predictive analytics can help identify high-potential talent or anticipate turnover risks, enabling proactive decision-making. A McKinsey & Company study (2023) found that organizations with strong HR analytics capabilities saw a 25% increase in employee retention and a 15% boost in productivity.
Agile HR systems and tailored programs ensure that business outcomes remain at the forefront. HR leaders should implement performance management frameworks that tie individual goals to organizational success. Additionally, fostering a culture of innovation through continuous learning and upskilling initiatives ensures employees remain adaptable in an evolving business environment.
Best-for-the-World: HR as a Driver of Social Responsibility
However, organizations today face demands that go beyond profit. Employees, customers, and investors increasingly expect businesses to address environmental, social, and governance (ESG) issues. A 2022 Edelman Trust Barometer report showed that 60% of employees consider an organization's commitment to social issues when deciding where to work. Here, HR plays a vital role in driving best-for-the-world practices by creating inclusive workplaces, championing mental health initiatives, and reducing the organization’s environmental footprint.
A great example of HR driving ESG efforts is Unilever’s global sustainability and diversity initiatives. The company has integrated ESG metrics into executive performance reviews, ensuring that social responsibility remains a top priority. HR leaders must advocate for similar policies that align employee well-being with corporate citizenship.
Leveraging Culture to Foster Growth
An organization’s culture—shaped by its values, behaviours, and mindsets—is a key enabler of both business success and social impact. HR leaders must actively cultivate a culture that encourages adaptability, purpose-driven work, and continuous development. When employees feel connected to the company’s mission and values, they are more engaged, productive, and innovative.
Values-driven organizations prioritize transparency, inclusivity, and ethical decision-making. HR should integrate these principles into all aspects of the employee experience, from hiring to leadership development. For example, companies that emphasize psychological safety and collaboration see higher levels of performance and retention. A Google study on high-performing teams found that psychological safety was the most critical factor in fostering team success.
Practical Steps for High-Impact HR Leaders
For HR leaders to successfully balance best-in-class and best-for-the-world objectives, they must adopt a holistic approach. Here are six key strategies:
1. Align HR Metrics with Business Goals
HR should move beyond traditional people metrics and measure the direct impact of HR initiatives on business outcomes. For example, tracking employee engagement alongside revenue growth can demonstrate HR's tangible contribution to company success.
2. Leverage AI and People Analytics
AI-driven insights can help HR leaders anticipate workforce trends, personalize learning and development, and improve talent acquisition. Organizations that use AI in HR processes see a 30% improvement in hiring efficiency (Deloitte, 2023).
3. Build an Inclusive and Diverse Workforce
Research from McKinsey (2021) found that diverse teams outperform their peers by 35% in terms of financial returns. HR leaders must implement structured IDEA (Inclusion, Diversity, Equity, and Accessibility) programs, ensuring representation across all levels of the organization.
4. Prioritize Employee Well-Being and Mental Health
Companies with strong well-being programs experience 23% lower turnover rates (Gallup, 2022). HR should implement holistic well-being strategies that include mental health support, flexible work arrangements, and employee resource groups.
5. Drive Leadership Development and Continuous Learning
Upskilling and leadership training should be embedded in company culture. Studies show that organizations that invest in leadership development are 2.4 times more likely to outperform competitors (Brandon Hall Group, 2023).
6. Embed Purpose and ESG Principles into HR Practices
HR should ensure that organizational values are reflected in everything from recruitment to performance management. For example, sustainability training can be included in onboarding programs, and employee recognition programs should highlight contributions that align with company values. Recognition should reinforce not only what employees achieve but also how they achieve it, ensuring alignment with ethical standards and cultural principles.
The Future of HR: Defining Sustainable Success
The intersection of best-in-class business performance and best-for-the-world impact is where HR’s true power lies. Take employee engagement as an example: while it boosts productivity (a business metric), it also fosters a culture where people feel valued and supported (a social priority). Similarly, fostering IDEA (Inclusion, Diversity, Equity, and Accessibility) initiatives not only enhances decision-making and innovation but also aligns with broader societal goals.
In the end, great HR doesn’t just contribute to the bottom line—it helps define what it means to be a responsible organization. By integrating best-in-class practices with best-for-the-world actions and leveraging a strong culture built on values, behaviours, and mindsets, HR can drive sustainable success that benefits employees, businesses, and society at large.