How to move HR from transactional to strategic

Moving HR from transactional to strategic requires automating administrative workflows to free up time for high-impact initiatives like talent development, culture building, and data-driven workforce planning.

Key takeaways

• Strategic HR focuses on long-term business goals rather than just day-to-day administrative compliance.
• Transitioning requires a shift from being a 'cost centre' to a 'value creator' through people intelligence.
• Success depends on leveraging the right technology to automate repetitive tasks and gain deep team insights.
• Understanding individual work personalities allows leaders to align human capital with strategic objectives.

For too long, Human Resources has been viewed as the 'department of no' – a necessary but purely administrative function tucked away in a back office. You know the drill: processing payroll, filing contracts, and managing leave requests. While these tasks are essential for keeping the lights on, they don't exactly move the needle on business growth. If your days are consumed by spreadsheets and paperwork, you aren't just busy; you're trapped in a transactional cycle.

The problem is that transactional HR is reactive. It waits for a vacancy to appear before hiring and waits for a resignation before looking at engagement. In today's competitive market, this approach is a recipe for stagnation. To truly support your organisation, you need to move toward a strategic model – one where the people function is a core driver of the company's mission. At Compono, we believe this shift is the difference between a company that survives and one that thrives.

The fundamental shift from admin to advisor

Moving HR from transactional to strategic isn't about ignoring the paperwork; it’s about changing your relationship with it. Transactional HR is focused on the 'what' and the 'how' of employment – what forms need signing and how do we process this exit? Strategic HR, conversely, focuses on the 'why'. Why is turnover high in the engineering team? Why are we struggling to attract top-tier talent for leadership roles?

To make this leap, you must first audit where your time actually goes. If 80% of your week is spent on manual data entry, you have zero room for workforce planning. Strategic leaders use technology to handle the heavy lifting of compliance and record-keeping. By centralising your people data, you can stop being a record-keeper and start being a consultant to the executive team. This is about earning your seat at the table by providing insights that the CEO can't find anywhere else.

When you understand the underlying motivations of your staff, you can predict performance issues before they happen. For example, The Evaluator thrives on objective analysis and logical decision-making. If you place them in a role that lacks data-driven tasks, they may become disengaged. A strategic HR leader recognises these misalignments early, ensuring the right people are in the right seats to drive the business forward.

Building a culture of people intelligence

Data is the bridge between transactional and strategic HR. Without it, you are just offering opinions; with it, you are offering solutions. Strategic HR relies on 'people intelligence' – the deep understanding of how your employees work, what motivates them, and how they interact as a team. This goes beyond basic metrics like headcount or 'time to hire'. It’s about understanding the DNA of your high performers.

Imagine being able to show your board exactly how a 5% increase in engagement correlates with a 10% increase in productivity. This is the power of a strategic approach. We see this in our research at Compono, where we've spent over a decade mapping how The Compono Culture, Engagement & Performance Model helps organisations identify the specific levers that drive success. When you treat culture as a measurable asset rather than a 'vibe', you change the conversation entirely.

To build this intelligence, you need tools that look beneath the surface. For instance, identifying The Pioneer within your ranks can help you assemble a task force for a new, innovative project. These individuals are naturally imaginative and adaptable – perfect for navigating change. By using personality data strategically, you aren't just filling roles; you're architecting a high-performing ecosystem.

Recruitment as a strategic advantage

In a transactional world, recruitment is a frantic race to fill a seat. In a strategic world, recruitment is a long-term talent acquisition strategy. This means building talent pools, nurturing your employer brand, and ensuring every hire is a 'culture add' rather than just a 'skills match'. If you're only looking at a CV, you're only seeing 10% of the person. Strategic hiring looks at the work personality and values of the candidate to ensure long-term retention.

This is where modern technology makes a massive difference. You can't be strategic if you're drowning in a sea of irrelevant resumes. By using a platform like Compono Hire, you can automatically score and rank candidates based on their fit for the role and your unique team culture. This ensures you spend your time interviewing the people most likely to succeed, rather than filtering through a cluttered inbox. It’s about moving from 'hiring for now' to 'building for the future'.

Consider the impact on your bottom line when you reduce turnover by making better initial hires. Strategic HR leaders know that the cost of a bad hire can be up to three times the person's salary. By focusing on the science of fit, you protect the company's finances and its culture simultaneously. This is how HR becomes a value creator, proving its ROI through reduced costs and increased team stability.

Developing for the long term

Once you have the right people, the strategic focus shifts to development. Transactional HR might offer a generic training course once a year to tick a compliance box. Strategic HR, however, creates personalised development pathways that align employee aspirations with business needs. You want your employees to feel that their career growth is intrinsically linked to the company's success.

This requires a deep understanding of individual strengths. A The Helper on your team will find motivation in supporting others and creating harmony. Their development plan should lean into these strengths – perhaps through mentoring or team leadership roles. Conversely, The Doer will prefer practical, hands-on training that gives them immediate, actionable skills. When you tailor development to the person, engagement skyrockets.

Strategic development also involves succession planning. You shouldn't be caught off guard when a key leader leaves. By identifying high-potential employees early and providing them with the right 'stretch' opportunities, you build a resilient organisation. Using tools like Compono Develop allows you to create these structured learning paths at scale, ensuring your workforce is always ready for the next challenge the market throws at you.

Key insights

• Strategic HR requires moving from reactive problem-solving to proactive workforce architecting.
• Leveraging work personality data allows for more precise hiring, better team dynamics, and higher retention.
• Automation of transactional tasks is the prerequisite for HR professionals to act as strategic business partners.
• People intelligence – derived from data and assessments – is the primary currency of a modern HR function.

Where to from here?

• Explore: Compono Platform
• Talk to an expert: Book in a 15-minute chat to get a walkthrough of Compono.

Frequently asked questions

How do I start moving HR from transactional to strategic?

The first step is to identify and automate repetitive administrative tasks. By using technology to handle payroll, basic compliance, and initial candidate screening, you free up the mental space and time required to focus on high-level strategy and people intelligence.

What is the difference between transactional and strategic HR?

Transactional HR is focused on day-to-day operations, compliance, and administrative accuracy. Strategic HR is focused on aligning the workforce with the long-term goals of the business, using data to drive performance, culture, and retention.

Why is people intelligence important for HR leaders?

People intelligence provides the data needed to make informed decisions about hiring, development, and team structure. It moves HR away from 'gut feel' and toward evidence-based strategies that demonstrably improve business outcomes.

How can work personality data help my organisation?

Understanding work personalities – like whether someone is a Doer, a Pioneer, or an Evaluator – helps you place people in roles where they will naturally thrive. This leads to higher engagement, lower turnover, and more effective team collaboration.

Can small HR teams be strategic?

Absolutely. In fact, small teams benefit the most from a strategic approach. By using smart platforms like Compono to automate the 'transactional' side of things, a single person can have the strategic impact of an entire department.