Human Resources: Transactional or Strategic?

Wages, payroll taxes, 401k, Section 125, 529 Plans, health insurance and other administrative roles need to be reliable and secured transactions, which have always been the core responsibility of the "Personnel Department." However, in the 21st century, Human Resources (HR) has also acquired a strategic role.

HR is no longer simply a service provider but a strategic partner with Principals and line managers. Performing HR activities in a strategic manner may involve helping the organization prepare for change, forecasting human capital needs that will be required to achieve strategic goals, leading talent management, restructuring the organization, and developing performance management systems that support strategic objectives.

If you are an owner of a firm and want a strong HR Professional to be your ally or, if you are an HR Professional who wants to have a career path that leads to the Strategic Board Room, here is a list of essential HR experience and personality traits:

• Strategic planning process

• Business management functions of planning, organizing, directing, and controlling, then using those functions in a strategic way

• Managing change in a diplomatic way

• Risk management, including thorough knowledge of labor laws

• Employee relations and career path development

• Understanding of compensation and benefits coordination

• Understanding of budgeting, accounting, and financial concepts

• Ability to influence and motivate people

• Ability to change gears fast and often

• Credentialed by the Human Resources Certification Institute as a Senior Professional in Human Resources (SPHR)

Keeping your workforce knowledgeable, skilled, productive and engaged, saves companies a great deal of money. With the cost of turnover estimated at 1.0 to 1.5 times that position's annual salary, it pays to invest in a strategically focused Human Resources Director.