HR Function

7 ways to transform transactional HR to strategic HR

HR system integration

Human Resources first sprung to life as a recognised field in the 1920’s. But for most of the 20th century, it was called “personnel administration”. This was an era of transactional HR, whereby the job of the HR professional was to deal with the technical and administrative aspects of personnel management.


During the 1970’s, however, perceptions began to shift. Globalisation, deregulation and the introduction of technology allowed personnel administrators to become more strategic. Over time, the field became known as HRM – or, human resource management.


Today, human resources is recognised as a very strategic part of business. Yet in many companies, HR professionals are still seen as paper pushers. And they are still stuck dealing with the more manual and transactional sides of HR.


Here are 7 things you can do to start shifting from transactional HR to strategic HR, and make a big, positive impact on your organisation’s success.

1. Introduce employee self service


One of the first things you can do to unburden yourself from the chains of transactional HR, is to introduce employee self-service. This means giving your employees the tools to manage their own employee records – such as ways to request holidays without having to file too much paperwork and jump through hoops. It also means allowing them to edit and maintain their own personal details, such as contact information. As well as freeing up valuable time, you’ll also be creating a stronger culture, by empowering your workforce. Most web-based HR systems now offer employee self-service, so if you are still using spreadsheets or paper forms, now is the time to make the switch.

2. Automate your most basic processes


Again, this is something that a web-based HR system can help you with. Transactional HR is all about moving things from one place to another. A machine can handle this, so why are you still doing it yourself? Most modern HR software will let you automate processes like payroll, sending documents and contracts, and notifying departments of changes to personnel records. Automating basic processes is a huge part of moving from transactional HR to strategic HR.

3. Align business goals with a people strategy


Once you have more time to think strategically, you need to think about how you will manage your workforce in a way that supports your company’s goals. If possible, speak to the senior figures in your organisation. Find out what they want to achieve, and then work out how you can manage your people differently, to help them achieve this. There is plenty of advice available for developing a people strategy in line with company goals, but this is a whole new subject that we can tackle another day.

4. Delegate repetitive tasks


Not everything can be automated. There might still be day-to-day administration tasks to deal with. And if you can’t automate them, then you need to manually process them. But if you spend too much time doing this yourself, then you’re likely clogging up your valuable schedule with tasks that don’t make meaningful impact. You won’t have the focus you need to develop your people strategy. What you need to do, is separate the transactional tasks that can’t be avoided, from the strategic areas that need your attention. Delegate these transactional tasks to somebody who will do them accurately and efficiently – so that you can spend your time applying your knowledge and skills to your company’s long-term goals.

5. Start thinking 3 steps ahead


You won’t get very far strategically, if you’re thinking too much in the short term. Short-term thinking is extinguishing flames. Mid-term thinking is finding the source of the fire. But the point you want to be at, is fireproofing your whole building! If you start thinking three steps ahead, you’ll soon be aligning HR with your business’s bigger strategy. You’ll be working towards becoming a strategic business partner.

6. Report on meaningful workforce metrics


Depending on the people who run your company, you might have a hard time sharing your insight with the more senior figures in your organisation. This isn’t a reason to quit – you simply need to be proactive, and find a way to get the message across! With time and practice, you’ll start to learn which statistics matter, and which metrics should be measured. To help you get started though, here are five HR metrics where you could focus your attention:


 * Cost per hire

 * Turnover

 * Absence

 * Job satisfaction and/or engagement

 * Performance


If you still use spreadsheets, you can generate basic reports on the data you store. But if you want an easier way to discover insights and generate powerful reports, you could consider web-based HR software.

7. Stay ahead of the trends


Beyond supporting specific business goals, it pays to stay ahead of the curve. The world of HR is changing constantly, and if you’re aware of what’s happening, you’re in the best position to help your organisation adapt and evolve. As well as following the People HR blog, you can also check out our list of 10 great blogs to follow. Subscribe, and check-in regularly to make sure you’re not missing a trick.

Do you have a transformational HR story to share?


I’d love to hear what you’ve done in your organisation to transform HR from transactional to strategic. I believe that by sharing real success stories from real people, we can help to improve the entire field of HR together.