When it comes to demonstrating the impact of HR to other business stakeholders, European people teams are ahead of the curve compared to their colleagues in other countries.
Our 2024 State of People Strategy Report uncovered the results, but now we’ve gone one step further and spoken to HR professionals based across Europe to discover some of the reasons behind their success. Here’s what they said.
Demonstrating the Impact of HR on Wider Business Goals
HR initiatives shouldn’t exist in a silo — but sometimes it can feel like they do. Globally, over half of HR leaders are struggling to connect their crucial work to wider business outcomes. This partly comes down to a divide between HR and the C-Suite but is also impacted by a lack of confidence in presenting those key metrics.
Interestingly, our data showed that HR leaders in Europe are more confident than their US counterparts in linking the impact of their HR initiatives to business outcomes.
One country that stands out is Germany, which scores particularly highly in every category. We spoke to Katrin Becker-Oligmüller, global head of HR at Lucht Probst Associates, based in Germany, who shared some strategies that work for her.
“I actively contribute to strategic decision-making by maintaining a regular seat at the C-Suite table, which allows me to align HR initiatives with overall business goals,” she explained. “I conduct regular stakeholder surveys to gather feedback, assess effectiveness, and make adjustments to our people services and people programmes delivered.”
Becker-Oligmüller also uses key performance indicator (KPI) dashboards as an effective means of measuring and communicating the tangible outcomes of HR strategies and the deliverables of HR services and programmes.
In addition to using a data-driven approach to showcase the impact of HR on wider business goals, HR leaders in Europe are also leading the pack globally when it comes to key HR functions related to employee experience, engagement, performance, compensation, hybrid work, and employee development.
In the UK, Louise Bancroft, senior vice president of people and culture at global workforce solutions provider Airswift, explained that her confidence in demonstrating the business impact of HR is again underpinned by the fact that any HR initiatives are aligned with key business objectives.
“On a quarterly basis, we present specific metrics to the operations board, showcasing improvements in employee engagement, talent acquisition effectiveness, and learning and development metrics such as learner satisfaction and participation.”
At GoCardless, UK-based chief people officer Alan Cairns said, “We make sure to ground ourselves in the business outcomes we want to achieve and to define clear and measurable metrics that will help us understand and communicate our progress.”
Cairns, who is also a member of Lattice’s CPO Council, said he and his team track a host of key metrics, including:
- Reduction in burn rate (the rate at which a company uses venture capital money)
- Increased engagement
- Lower attrition rates
- DEIB trends
- Retention rates of critical roles and high-potential employees
How HR Teams in Europe Are Stabilising
2023 might have been a tumultuous year — but European HR professionals are optimistic about the future.
Budgets
Budgets are generally starting to stabilise, either increasing or staying the same for 2024. But Alison King, managing director at UK-based HR consultancy Bespoke HR, mentioned that while budgets might be staying roughly the same, targets are still increasing. “Increasing overheads have meant increased costs but fewer people. This is resulting in many teams having to do more with less resource; accounting for the high levels of burnout,” she said.
With the cost of living generally increasing across Europe, employees are also under pressure to do more with less. And this can impact the kinds of benefits people look for from their employers. “We’re anticipating a higher demand for robust employee assistance programme (EAP) initiatives with a focus on staff wellbeing, benefits, and cost-saving programmes,” said King.
King also noted that this is particularly pertinent in sectors where monetary increments may be challenging and where supplementary benefits can motivate and retain employees. “Creating a workplace culture that promotes a healthy work-life balance will be integral to successful HR strategies in the next few years,” she added.
Doing more with less is a recurring thread for many HR professionals. Cairns mentioned that due to shifting macroeconomic conditions, venture capital money isn’t as easy to come by, and the cost of capital is much higher than it was a few years ago. “As a consequence, companies across the board are retrenching, needing to achieve ‘more with less’ — driving profitability and taking a hard look at costs,” he added.
But Cairns noted these conditions, while being challenging, also create opportunities: “I think there is a huge opportunity for commercially oriented HR professionals to make indelible marks in this area and help their organisations build effective, people-forward performance management programmes.”
Burnout vs. Engagement
The pressure of having to do more with less is a potential reason why the impacts of burnout are still widely felt across European HR teams. But our results also show that engagement is still high among European HR professionals.
“Engagement fluctuates because of burnout,” explained King. For HR teams, that means finding the right balance is crucial, and as King said: “You can only do this through regular staff check-ins.” She suggested that managing teams more wisely will become a key theme in 2024 and noted, “Listening to colleagues’ needs at work (and personally) helps increase engagement and reduce the likelihood of burnout.”
Within her team, Bancroft prioritises a fairly distributed workload, ensuring people can manage their work and access support when needed. “Regularly assessing team dynamics and adjusting workloads accordingly helps us prevent burnout while maintaining high levels of engagement,” she said.
But it’s crucial that these kinds of strategies also trickle down to managers, which is why in 2024, Airswift will be introducing Wellbeing Champions into each regional office and training all managers on how to recognise signs of burnout early, allowing issues to be dealt with proactively.
Rob Boyle, marketing operations director at Airswift, mentioned that he actively monitors his teams for signs of impending burnout. “These can include higher absenteeism rates, more frequent illness, an unexplained drop in productivity, and emotional changes like an increase in irritability or anxiety.” Addressing these signs as soon as they become apparent can help stop burnout from becoming a more serious issue.
Harnessing The Power of HR Tech
HR technology continues to reshape people programmes, with the HR leaders of high-performing teams actively implementing advanced HR software.
Performance management software is particularly critical in helping HR teams meet or exceed their goals. At GoCardless, Cairns explained, “We’ve invested in Lattice as our go-to performance management tool, and are designing a roll-out plan and performance cycle to embed the platform into the way we work.”
And of course, artificial intelligence (AI) is reshaping certain aspects of HR as well. “Embracing technology, particularly AI, allows us to enhance efficiency in talent management and decision-making,” said Becker-Oligmüller. “All this positions HR at the forefront of shaping organisational success, making it a truly impactful and dynamic role in the years ahead.”
Looking Ahead: The Future of HR and Priorities for 2024
With an eye on the year ahead, HR leaders in Europe are focusing on setting priorities, charting the way forward, and proving the value of their work.
Below are the top two priorities for HR teams in the UK, France, Germany, and worldwide in 2024, according to this year’s State of People Strategy Report.
Cairns said his top priority is building an inclusive, high-performance culture. “Employee performance and engagement are critical pieces of that puzzle,” he said. “My team is focused on a number of strategies in particular to drive employee engagement and performance.”
While employee engagement and performance are global HR trends, European teams are also focusing on compensation, goal setting, and learning and development — and they’re updating their HR tech stacks.
Becker-Oligmüller mentioned that she’s incredibly optimistic about the future for HR professionals: “The convergence of several key trends, such as the ageing workforce, advancements in AI, and a shrinking talent pool, presents an exciting landscape for HR.
“The increasing complexity of workforce dynamics underscores the pivotal role of people-centric and value-driven HR practices. As HR professionals, we have a unique opportunity to navigate these challenges by fostering a workplace culture that prioritises individual well-being, continuous learning, and diversity and inclusion,” she added.
Bancroft agreed, saying that “the focus on employee well-being and productivity positions HR as a critical function in driving our company’s success.”
We’ll leave the last word to Cairns, who said that for HR professionals, he sees 2024 as “the year of making performance come to life for your business.”
For more insights into the global state of human resources, read the full 2024 State of People Strategy Report.
