I’m in charge of human resources for a medium-sized, government-funded provider of institutional care. Whenever our executive director is considering a strategic or tactical issue, she never fails to consult with my colleagues in marketing and finance. But unless there’s a potential legal or compliance-related dimension to it, she almost never brings me in on the discussions. Shouldn’t strategy include the people side?

Of course it should. But over the years organizations of all kinds have grown accustomed to drawing up business plans that are silent on the question of where the people who will carry out the plans will come from.

The reason for this, as regular readers of this column will know, is that the baby boom generation has provided organizations with a seemingly inexhaustible supply of workers for the past 40 years. Employees who resigned could be replaced quite easily. The replacing was (and is) done by recruiters. The role of recruiter is usually an entry level role. That’s a reflection of how difficult finding workers is, as viewed by senior managers; that is to say, not very difficult at all.

This is but one example of the relatively small amount of attention that executives pay to people issues. When surveyed, they’ll say that these days finding talent is their biggest challenge. But they’re not involved in it very much themselves. This isn’t because they’re being two-faced; most executives don’t come from human resources. They come from – yes – finance and marketing/sales. Chief executives rarely come from HR.

It may be the case that your executive director doesn’t see your role as a strategic one. If this is the case, she’s simply being typical. Most managers view HR’s role as administrative. So do most employees. After all, when employees have reason to come into contact with HR, it’s usually over an administrative matter. Sign a form, complete a report, send in a dental claim, etc.

The Accenture group reported in a 2003 study that 67% of executives gave high marks to their HR functions for their strategic contributions. Sounds pretty good, right? Questioned further, it turned out that by ‘strategic’ the respondents meant the quality of training, succession plans, and other programs. It didn’t mean contributing to decisions that affect the overall direction of their organizations. They saw HR as primarily administrative.

I’ve written elsewhere (HR Professional, December 2005) that human resources, in order to become strategic, needs to change dramatically. It needs to split itself up, with administrative processes and programs in one department and strategic elements in a separate one. It used to be that accounting and finance were considered to be essentially the same thing. Same for sales and marketing. Today we know that finance is strategic, while accounting isn’t. Marketing is strategic, while sales isn’t. Your executive director is talking with marketing and finance, not with accounting and sales.

This brings me back to the boomers. We know that they’re becoming eligible to retire, and there aren’t enough workers coming up behind them to replace everyone. This will require a strategic response from every organization in Canada. (I know that’s a strong statement, but I’m sticking by it.)

Here’s an example of what I mean. Let’s say there’s a software development company that makes systems for airplanes; systems like cabin pressure controls or air quality. Technology is getting more sophisticated all the time, and only new university graduates are trained to use the latest.

You are the head of HR for this company, and you have approval to hire three of the ten graduates from your local university. How many do you hire?

The ‘Personnel’ answer is three, of course. You have approval for three, so that’s how many you hire. But let’s think strategically. How many of these graduates will your competition hire? Lacking the answer to this question, you suggest a strategic approach. Hire all ten graduates. Your competition gets none. You get all the latest technological skills, and they get none.

This response is part of an overall strategy of making it harder for your competition to attract and retain customers. The administrators would be horrified, but administrators aren’t in on these discussions, remember? I realize that hiring all ten graduates would create problems, but that can’t be allowed to get in the way of strategy execution.

Here’s another example. Do you track turnover – the rate at which employees leave your organization? If you do, that’s good. But it’s not strategic. Turnover doesn’t distinguish among employees. It counts noses. It doesn’t shed any light on which employees are leaving. A strategic approach to managing departures is to track which of your key people, or future leaders, are leaving.

When HR starts thinking and acting strategically, executives will start to treat it accordingly. So what was your reaction to my suggestion to hire all ten graduates instead of just three? Were you alarmed or intrigued?

Administering programs and ensuring compliance are important but not strategic. Here’s another suggestion. Log your time for five consecutive days. That will tell you how much of your time is going to administration. Then you can start to make decisions about how to replace some of that with time spent on strategy.

To submit a question for a future column, or to comment on a previous one, please contact editor@charityvillage.com. No identifying information will appear in this column.

Tim Rutledge, Ph.D., is a veteran human resources consultant and publisher of Mattanie Press. You can contact him at tim_rutledge@sympatico.ca or visit www.gettingengaged.ca.

Disclaimer: Advice and recommendations are based on limited information provided and should be used as a guideline only. Neither the author nor CharityVillage.com make any warranty, express or implied, or assume any legal liability for accuracy, completeness, or usefulness of any information provided in whole or in part within this article.