A successful Human Resources function is trusted, viewed as a reliable and effective partner, well-aligned with business priorities, and known to deliver what is needed to drive organizational results. Those concepts highlight the strength of the relationship between the company and its internal customers or stakeholders. Effectively engaging HR stakeholders is not merely a supportive element but a foundational strategy critical to an organization's health and functionality. As HR departments are central players in shaping organizational culture, driving change, and ensuring compliance, understanding and aligning with the needs of diverse stakeholders—including employees, management, unions, and regulatory bodies—becomes paramount. As a result, engaging HR stakeholders in a robust and formalized fashion becomes a mechanism for HR to improve the employee experience, champion more efficient workflows, drive the adoption of enhanced technologies, and foster a work environment conducive to both individual satisfaction and collective productivity. By integrating comprehensive stakeholder management practices HR organizations can better navigate the complexities of workforce dynamics and contribute strategically to their organization’s long-term objectives.

Defining stakeholders and their engagement 

The concept of considering the needs and requirements of those with a stake or vested interest in the products and services of an organization originated with management theorists in the 1930s. It was formally defined and introduced by the Stanford Research Institute, then promoted by researchers at Wharton Business School, and finally popularized as a corporate responsibility by R. Edward Freeman in his 1984 book (Strategic Management: A Stakeholder Approach). Project management professionals adopted and broadened its application, and HR introduced engaging HR stakeholders as a formal approach in the 1980s-1990s. 

Freeman defined stakeholders as “any group or individual who can affect or be affected by the achievement of an organization’s objectives.” The Project Management Institute (PMI) defines them as those who “have a stake or an interest in a project or strategy undertaken by a company or an organization…will be affected in some way…and so have an interest in influencing it.” Stakeholder management or engagement is a process that identifies the stakeholders and their needs, preferences, biases, and interests and addresses them through proactive and planned methods. It focuses on how an organization interacts with its constituencies to introduce and drive change, upgrades, and innovations that best meet their expectations and requirements.  

“Stakeholder engagement” is viewed as a more constructive and accurate phrase than the more common “stakeholder management.” The reason? HR teams neither manage nor lead the relationship with various end-users regarding their contributions. The role of HR is to provide educated guidance, insights, processes, and programs that support line leaders' efforts to drive productive and effective delivery of corporate services or products to their consumers. As a result, HR teams who focus on engaging HR stakeholders to meet the needs of their internal “customers” (those who use their products and services) and other stakeholders (those who rely upon the output and reporting related to the delivery of those) are reliant upon a collaborative vs. directive relationship.

How stakeholder engagement applies to HR

The practice of formally engaging HR stakeholders as a concept has been used in a variety of cases across HR and many professionals were introduced to it through process improvement methodologies (CPI, Reengineering, TQM, Kaizen, Lean, Six Sigma, Kanban, etc.) that were adopted as corporate-wide initiatives in the 1980s and beyond. Understanding the end-user's needs and incorporating their requirements into a product, service, or process design and improvement was revolutionary for HR, finance, IT, Purchasing, etc. Over the past decades, these teams have successfully applied them to the design and development of HR strategic planning, HR and talent process improvement, systems implementations, policy or program designs/redesigns, and other major organizational changes. 

In a more recent evolution, the use of design thinking (or human-centered design) has gained traction in helping drive improved employee experience (EX), candidate experience (CX), and the design and development of a wide range of HR processes. By engaging HR stakeholders and their perspectives and preferences in developing a product or process that they will later use, a more efficient method for ensuring its relevance and utility to their future use can be attained. This has been used in various initiatives, such as redesigning performance management processes, annual employee benefits enrollments, eLearning programs, employment application systems designs, etc.  

Even more powerful is how these methods can be leveraged to build better and more effective relationships with leaders and managers in day-to-day interactions. Instead of robotically reacting to manager requests for a particular solution, engaging HR stakeholders to jointly discover the root causes of an issue and create a solution establishes a deeper bond. Using the managers' insights and experience to contribute to a resolution that blends with HR expertise and data creates a sense that their perspectives are heard and valued.

Identifying HR stakeholders

Traditional approach

Traditionally, HR has focused on improving leader, manager, and employee effectiveness through various programs and processes designed based on best practices defined by academic, consulting, and other experts. As a result, any notion of each of these groups as “customers” was limited to defining their perceived needs focused on the efficiency of HR processes and technologies to support their conducting people-related processes. However, as labor market competition evolved or increased, a focus on meeting employee needs appeared. As early as the mid-20th century, Corning invested in the local community to make its location more attractive to job candidates as a place to live and work. Silicon Valley companies famously provided special services to employees, such as cafeterias with ready-to-eat meals for employees to bring home to their families, onsite dry cleaners, banking, fitness centers, and classes. Cafeteria-style benefits plans allowed for personalizing choices driven by each individual’s preferences and needs. These examples were based on understanding what employees needed or desired and contributed to a trend toward engaging employees to design programs that fit their needs and lifestyles. As such, engaging HR stakeholders proved effective in attracting and retaining employees.

Expanding the definition

Thinking beyond the employees and leaders challenges HR to develop strategies for addressing the needs and requirements of the benefactors of their many programs, policies, and processes. As the HR value chain creates benefits for employees and leaders, their resulting productivity and effectiveness most often drive enhanced revenue, profitability, and growth. As such, the Board of Directors, owners, and investors all benefit from HR’s efforts. As HR focuses on managing the company's environmental, social, and governance (ESG) agenda, pushing for policies and practices that support social and community responsibility is another increasingly important consideration. Similarly, bringing partners, dealers, contractors, and supply chain relationships into the HR lens creates a likelihood of restating corporate values, mission statements, performance standards, etc., that are brought into performance management, leadership development, and competency models and programs.   

The Project Management Institute (PMI) also considers internal partners like finance, marketing, or IT.  External stakeholders should include unions with existing contractual relationships, joint venture (or related) partner companies, suppliers and subcontractors, and regulatory authorities (EEOC, OFCCP, OSHA, and industry-specific regulators). Those stakeholders have varying amounts of interest in company operations and outcomes, with some relying on compliance reporting and others on efficient and effective mechanisms for doing business together. Interestingly, it mentions the press and media as stakeholders who can influence perceptions of the organization's efforts and initiatives and the relative level of success achieved. Finally, the local community – neighbors, politicians, fire and police forces, hospitals, and emergency service providers – almost always have a stake in the success or failure of a company’s efforts, including employment growth, profitability, willingness to support and work to improve the local education, healthcare, arts, or other services that the community relies on for its long-term improvement and vitality.  

Dave Ulrich’s consulting team at RBL updates the list to acknowledge the need to think more broadly about business stakeholders.  With an eye on creating greater strategic impact and focusing HR on greater business needs, they argue that the function needs to look beyond employee and leader concerns to an “outside-in” perspective. Think about it as a reverse value chain, where customers' and investors’ needs for quality products, efficient purchasing and service delivery experiences, and investors' need for financial returns and growth lead to HR’s focus on developing and driving a culture of innovation and continuous improvement.  This stakeholder need -> talent need translation clarifies how HR can (and should) consider a broader group of stakeholders’ needs. For example:

How to implement stakeholder engagement 

Effectively engaging HR stakeholders calls for a disciplined approach or methodology that can be used across organizational functions and initiatives. There are well-established steps promoted by academic and project management professionals that have been demonstrated to be successful across a wide range of applications. The key is to proactively plan and engage with stakeholders who have been formally identified and targeted for specific activities based on the extent to which they are/will be impacted by the strategy, initiative, or change being implemented. The primary steps include:

1. Stakeholder identification

The initial step is to identify the employees who will be impacted by the change (e.g., employees), influence its adoption (e.g., leaders, managers), provide critical input or insights into its design (e.g., regulatory agencies and their requirements), or provide support during its implementation (e.g., IT, finance, purchasing). An excellent tool to help make sure all stakeholders are identified is the responsibility assignment matrix (commonly known as a RACI chart), which clarifies the people involved and specifies their roles (responsible, accountable, consulted, or informed) in the process or program.

2. Stakeholder analysis or mapping 

An assessment of the various stakeholders is conducted next and helps prioritize the most important roles to consider in the planning. Those with the greatest interest and authority are given the greatest attention to help minimize their potential to impact acceptance, adoption, and implementation success negatively. One method is a useful tool to categorize the stakeholders on this basis, with a 2X2 matrix with “interest” on one axis and “power” on the other. With this level of analysis, decisions can be made about the level of awareness and collaboration most appropriate for each role. Another common matrix maps “influence” and “impact,” with the latter focusing on how much the change or initiative will impact the work methods, flows, or productivity of those in different roles.  

A more complete analysis for engaging HR stakeholders is to understand for each role 1) the extent of impact, 2) the level of influence over the project’s successful adoption, 3) key pain points or design elements to be addressed or included, and 4) how to best engage them.  Such an assessment provides more detailed guidance to the team around how much to engage each stakeholder, how to do so, and on what topics. If this process sounds like classic strategic change management, it is closely related and uses many of the same methods and techniques.

3. Stakeholder engagement

Understanding each stakeholder’s needs, perceptions, and preferences requires interaction and research. Conducting interviews (e.g., with top leaders), focus groups and surveys (e.g., with targeted management and employee groups), town hall presentations/overviews, etc., are effective. Specific questions and lines of inquiry are used to understand each role’s concerns, biases, preferences, and levels of understanding. Research is often used to understand how laws and regulations may impact the initiative's design and where further guidance may be needed from the governing body.   

Once the assessment for engaging HR stakeholders is complete and their needs are understood and documented, a plan of action can be designed and implemented. Such a plan depends upon the nature of the initiative or change and can range from a website with instructions to support the stakeholders' understanding and adoption to a series of formal sessions to design the solution. Other methods include a measurement dashboard that communicates the efficiency and effectiveness of the solution once implemented.  

Another key element for engaging HR stakeholders is using top business leaders in a formal governance council, where design and upgrade decisions can be made, implementation progress can be reviewed, and adoption/acceptance data can be assessed and discussed. These councils act as oversight boards where issues and successes are shared and evaluated, and corrective or celebratory measures can be implemented at the direction of the most senior leaders.

4. Measure and evaluate progress and effectiveness

A formal process and outcome measurement system and process should be created to evaluate the ongoing development project plan and the effectiveness and efficiency gained through its implementation. Critical measures and KPIs should provide actionable insights into project progress,  changes in impacted employees’ attitudes and understanding, performance issues, and concerns that arise so they can be addressed promptly and effectively.

The benefits of effective stakeholder engagement

The primary goals of productively and successfully engaging HR stakeholders are to create relationships with the end-users and benefactors of HR’s efforts, initiatives, processes, and outputs. Such a relationship creates bonds characterized by trust, a willingness to adopt new and updated practices (by the stakeholders) and adapt to preferences and proclivities (by HR), and an openness to new ideas and trends. By actively seeking input and listening carefully to the various stakeholders' needs, pain points,  and preferences, HR significantly contributes to creating an organization-wide culture of transparency, openness, and collaboration. Such a culture can become much more attuned to the needs of co-workers, customers, investors, suppliers, and communities in which it operates, and in the long run, employees focus on addressing their needs and requirements.  

The specific benefits of a well-designed and executed stakeholder engagement program include:

• Clarity about stakeholders roles, expectations, and preferences. A well-devised plan provides transparency about the roles and responsibilities of those involved in the process, program, or relationship. It elevates previously unknown or unspoken biases, partialities, and hopes about how the relationship and workflow will be conducted with a focus on satisfying each party's (negotiated) requirements.
• Shared ownership and acceptance. Once the effort is underway, engaging the HR stakeholders in the design, development, implementation, and ongoing evaluation reduces potential conflicts over its final form. Higher levels of adoption and compliance are common, with a greater sense of “it was built to my specifications.”
• Innovative and responsive solutions. Bringing non-HR opinions and observations into solution development can open new perspectives on issue identification and resolution. Understanding the end-user's experience helps establish new standards for HR processes, programs, technology, and practice designs. 
• Increased engagement. By enrolling the stakeholders in designing and developing a new or updated process, approach, or capability for conducting their business, employee engagement and satisfaction can increase as they get a sense that their voice matters. With an understanding of how the initiative can benefit them, their acceptance and willingness to adapt are increased. 
• Enhanced cross-functional collaboration. Engaging HR stakeholders such as end-users, influencers, and partner functions can enhance inter-departmental teamwork and collaborative problem-solving. Broader perspectives on a common set of problems improve informed decision-making in the organization.  
• Improved interaction experience. Engaging stakeholders can significantly improve the overall experience of leaders, managers, employees (EX), candidates (CX), and partner/subcontractor organizations. By using their perspectives to design new and improved processes that meet their needs for efficiency, simplicity, reliability, and effectiveness, the satisfaction quotient rises substantially.
  
  

HR skills needed to engage stakeholders effectively

Skills used in effectively engaging HR stakeholders are the same keys to establishing a potent and effective HR team. They call for capabilities that enable collaboration, effective influencing, problem-solving, and establishing a trusting relationship with various stakeholders an HR professional deals with daily. They are also closely related to emotional intelligence (EI), which is core to building and managing healthy and productive relationships with superiors, peers, partners, and providers. Dave Ulrich offered a particularly powerful summary of the most critical skills, identifying five key skills for influencing others.  

• Build trust through credibility (be an HR subject matter expert), reliability (do what you say you will), intimacy (keep secrets, make them feel safe, be open and transparent), and an "other orientation" (demonstrate their interests over your own).  
• Adapt to their style by observing how they make decisions, treat people, manage information, and handle differences
• Connect to goals and values by linking your ideas and proposals to their greatest  beliefs and values (e.g., agendas) and then their behaviors to accomplish their goals 
• Surround them with information from 1) credible sources, 2) that resonate with them, and 3) are provided consistently over time
• Behave as if they are already committed to your approach.  Engage them in governance, design, and/or other related activities to change their perspective on resolving their issue. Act as if they’ve already committed with a presumptive sales technique of engaging them in issue and solution identification and resolution.

Other skills include:

• Active listening to demonstrate that you understand their needs.
• Negotiation to find a middle ground and meet them “where they are” and want to go. Be ready to compromise.
• Communications with proactive updates, explanations, and feedback.
• Problem-solving with root cause analyses to solve the "real" or "right" problem.
• Integrative thinking that links how one element of change impacts another, how stakeholder groups' needs can be met simultaneously, and how HR initiatives, processes, and programs align with evolving business needs.
• Responsiveness that demonstrates a commitment to addressing issues and their needs in a timely manner.

Relevant Practices & Tools

HR Business Partner Success Profile: Deep Dive. >

An HR Business Partner (HRBP) is a strategic role within the Human Resources function, closely collaborating with business leaders to align HR strategies with business objectives... more »

Employing Advanced Stakeholder Engagement Techniques to Reinforce the Criticality of the Targeted Change. >

When done effectively, stakeholder engagement creates trust with the initiative team, generates honest dialogue to build support for the changes, and reduces the potential for conflict... more »

Driving Adoption of the Digital Future to Optimize the Return on Digital Investments. >

The digital transformation will deliver a new way of operating for the business. It establishes a new status quo for what employees expect, how they work individually or in teams... more »

Engaging Leadership and Introducing Governance to Reinforce the Linkage of Development Efforts to the Business. >

Actively involving leaders in the strategies and processes of development is an essential element for success as well as another way to reinforce the importance and potential impact... more »

The HR Council Structure Template: Define the Mission and Make-up of a Governing Body to Guide and Support the HR Function. >

This document helps clarify the role, mission, and makeup of a business-led oversight and management council for HR strategies and programming... more »

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