Increasing HR's Visibility

Annual reports can help HR leaders strengthen their role and influence within their organizations by informing senior-level officers of various HR activities and initiatives. Such reports can not only provide insight into how the workforce is evolving but can also help provide the data needed to shape future programs.

By Lin Grensing-Pophal

A common lament among HR professionals is they are not being taken seriously or not being included in strategic discussions.

And, while it's understandable that some HR leaders feel they deserve recognition for the important role they play in ensuring their organizations are staffed with qualified, capable, motivated and loyal employees, the fact of the matter is that if they're not communicating about their achievements, chances are senior leaders are not going to be privy to all of their good deeds.

"Many senior executives underestimate the importance and impact their HR team can make on the business," says Michael Custers, vice president of marketing at NorthgateArinso, a provider of HR outsourcing software and solutions.

Annual reports can help increase awareness.

"By having HR departments conduct annual reports which provide details of the major initiatives and activities they conducted over the year, the executive team can gain additional visibility in the HR function," he says.

HR can provide deep insight in how the workforce is evolving, behaving and performing, based on key-performance indicators, dashboards and benchmarks, he says.

"This increased visibility heightens the awareness of HR to the executive level, making it a part of the strategic business strategy. HR is often the unsung hero within a corporation and these annual reports allow their efforts to be recognized in a very quantifiable way."

Annual reports of HR activities are relatively common in academic and government settings. Google "HR + 'annual report' " and you'll generate 16.5 million results and a quick look shows prevalence in the education and not-for-profit sectors as well as for government agencies.

But some private sector organizations are catching on and finding that a summary of the prior year's activities can not only help direct the HR department's work for the current year, but can offer tangible -- and often quantifiable -- evidence of their contributions

A Focus on Results

Kelli Foret, owner of The HR Design Co., an HR consulting firm in the Lafayette, La. area, used such a tactic to communicate the value-added operational services as well as top HR strategies and initiatives to executive management when she was the HR director at a previous organization, which had about 300 employees.

"It helped our department gain credibility and trust -- thereby earning us a larger budget and voice," she says.

"Part of my challenge was getting leaders and managers and everybody understanding that human resources was very strategic in nature," says Foret.

She says a report helps position the function in a strategic way and included report elements setting out the return on investment from various HR initiatives such as the employee-assistance program or safety-incentive program.

The response from senior leadership was immediate and positive, she says. They encouraged other functions in the organization to create similar reports and through their roles in various community boards, encouraged board members to do the same with their HR and administrative functions.

At BNP Paribas, a global banking and financial-services firm, Lynne Oldham, head of human resources for North America, produces a year-end summary of the prior 12 month's activities.

She says she'd change Peter Drucker's famous quote that "what gets measured gets done" to say "what gets measured is valued."

That's particularly true in HR, she says, where there is a tendency to ignore HR contributions in quantitative terms.

"I used to run my own HR outsourcing shop before I came here, so from a business perspective I know that it's important to be able to show your clients what kind of activity is going on," she says.

Oldham, who is based in the New York area, says her 28-page report includes both quantitative and qualitative information about HR activities over the year, encompassing four main areas: head-count recruitment and movement, performance and learning development, diversity and inclusion, and exit statistics.

What makes the report especially compelling to her management team, she says, is having all of the data readily available in one place, so it can serve as a valued starting point for strategic discussions about the way HR can help drive organizational performance.

"They can ask really good questions about what we're thinking about for the years to come -- looking back can help you look forward," Oldham says.

Custers says HR leaders "need to encompass all the important HR activities and their initiatives throughout the year. This way the HR team is providing the rest of their organization with visibility into what their objectives, goals and achievements are."

Annual reports, he says, also have external value.

"Organizations that highlight their invested interest in HR become more desirable organizations to work for," he says.

An Investment of Time

Creating an annual report is not a simple endeavor, of course, and HR executives need to be aware of the initial commitment in terms of time and effort.

Foret says her inaugural report took "three months of consistent information-gathering and planning," although it became easier over time.

"After the first year, it became kind of a fill-in-the-blank process. As we implemented programs, we made sure that during the implementation process we thought about the annual report and how we were going to communicate it."

Odlham says the annual report takes her "team ... about four days to put it together because the data is in various systems. It's not easy."

But, she stresses, it's certainly worth the effort. "It was really well received," she says and it's served to generate important discussions about future direction and opportunities.

A first step is to inventory the types of information to include in the report, Custers says, such as the evolution of the workforce population, attribution rates, learning courses delivered, vacancies researched, number of external hires, internal promotions, etc.

Oldham advises starting small.

"It can grow to monster-size quickly because there's so much that can be measured in HR. Start small, but start meaningful," she advises.

Like Foret, she stresses the importance of thinking like the executive team: "Make sure the measures are ... going to mean something to your business, not just the more mundane statistics. Ultimately, the most meaningful statistics are the ones that will help to propel business going forward."

Ongoing Communication

HR communication should not be confined to an annual report -- or with just senior leadership, Foret says. HR should be communicating with all levels of the organization.

"We published updates in the company newsletter and also started a newsletter called SuperNews -- an update to the supervisors about what was going on ... and how that was going to affect them."

At BNP Paribas, says Oldham: "We do quarterly learning reports where we put up a graph at key points around the organization to show people what learnings are going on and the volumes of people taking them."

But they both feel an overall annual report has an important place in helping to establish the value and credibility of the HR function.

Annual reports definitely help Foret's HR department to become part of the strategic discussions. After creating the first annual report, she says, HR was included in executive-management meetings.

"We were able to get a seat at the table," she says.