In many ways, the job of making a business decision is just the beginning of the process. Those affected by the change need to buy into it, otherwise it is likely to fail in the longer term.
This is partly why HR is becoming more involved in decisions that sit outside its department. A survey of 1,100 senior business leaders by Raconteur reveals that HR has significant influence over purchasing and is classed as one of the top five decision-making functions by half (49%) of executives. This puts HR ahead of marketing, tech, legal and procurement for decision-making.
Finance especially values the input from HR, with 68% describing it as one of the top five decision-making functions, while more than half (54%) of marketing executives think the same. Some 64% of finance executives say that they regularly (every week) work with HR, while 57% of sales and 49% of operations say the same.
HR professionals themselves say they have decision-making influence of some form (ranging from being involved in the decision to signing it off) across a range of business functions. This includes ERP, where 73% say they are involved, to sales technologies (81%), martech (81%), data storage and processing (97%), business intelligence (79%) and legal services (72%).
But why does human resources now play such a critical role in business decision-making? The data suggests that the people-first mindset can help companies to make important investment decisions about software and technology because they look beyond cost. They understand how decisions need to work for employees and this is how HR can help create employee buy-in for business decisions.
HR’s intrinsic role in decisions
A roundtable report from Ricoh, published at the end of 2021, argues that the pandemic has increased the voice and credibility of HR departments. A mixture of new working styles and managing different employee and business needs has increased the importance of the HR function and its responsibilities.
“HR’s remit has grown following the pandemic. HR teams across sectors and industries are responsible for much more, including employee productivity, health and happiness,” says Rebekah Wallis, director of people and corporate responsibility at Ricoh UK.
Not involving HR departments in purchasing decisions can lead to outcomes that fail to put people first
“The fact that HR teams are intrinsically linked to each individual and department across an organisation means other teams – from procurement to IT, and finance to operations – rely heavily on them before investing in tools and services.”
It’s for this reason that HR departments need to be looped into purchasing decisions that impact the roles and responsibilities of staff. Christian Kaberg agrees that “HR must be involved in the decision-making process if it directly, or indirectly, involves people”. Kaberg is the managing director of the St Pancras Hotels Group, which owns several boutique brands in London.
“HR departments will have a more people-based view on roll-out and communication processes,” Kaberg adds. If the right software or technology is purchased, “the positive impact of any decision tends to be more effective and buy-in positive”.
Creating buy-in among the business
There needs to be clear communication of the goals and objectives, from the top down, to create successful buy-in. Communication between the C-suite and employees at any company will generally be dictated by the HR department.
Post-lockdowns, though, many people work from different locations, which can make it difficult to get messages across to employees. While the HR function may be “intrinsically linked” to other departments, as Wallis puts it, a common theme in the Ricoh roundtable discussions is a considerable lack of reliable and accurate metrics to support cross-departmental collaboration. Essentially, HR teams often don’t have the data to make more informed decisions for employees.
“HR departments struggle to get the insights needed to make these choices and recommendations. CEOs and business leaders need to give HR managers and directors the tools to make better considerations,” argues Wallis.
By involving HR in these purchasing decisions, companies can ensure that they are investing in technology that enables constant communication – which HR can use to capture the insight they need to provide the right support to employees across all departments. The ideal system should “allow HR departments to better understand every employee,” says Chelsea Coates. She is chief people officer at GWI, an audience research company that has offices in London, New York, Athens, Prague and Singapore.
“HR can get ahead of issues, recognise where there are opportunities and provide the right tools to get the best out of people. We can also ensure that employees have a positive experience, from onboarding through to leaving the business,” she says.
“When HR managers have the data they need, they have a much clearer idea of individual levels of engagement, performance and tenure – and all of that encourages bespoke conversations on personal development.”
Transforming through training
A key part of any major decision journey is reskilling and upskilling employees so that they can adapt to new, more complex processes and procedures. Not doing so can cause employees to become frustrated and disengaged. With the right software and technologies, HR teams can improve the training and development they can deliver.
Not involving HR departments in purchasing decisions can lead to outcomes that fail to put people first
Just as important as engaging employees is encouraging the C-suite and business leaders to develop the skills and abilities which they need to lead the company through changes, with confidence. HR can use software and technology for this. GWI uses an artificial intelligence (AI) platform to deliver its leadership coaching programme. Coates explains that the benefits of using AI and analytics include the ability to “spot trends and themes, get a view of the challenges and give each leader an experience which is customised to their needs”.
Ultimately, if business leaders are well prepared it filters through to employees, who will likely be more willing to accept decisions if they understand why they were taken and exactly how they will affect them. On the other hand, not involving HR departments in purchasing decisions can lead to outcomes that fail to put people first and do not create buy-in from all employees.
This article is part of a series analysing the state of business decision-making. Based on exclusive research of more than 1,000 senior leaders by Raconteur, you can explore the rest of the series, here.
