HR = Hardly Relevant?

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Over the few years that I have taken an interest in the world of Human Resources, the saga continues on “Is HR adding value to the business?”.

Dilbert Evil HR

When Peter and I started working on the Pan European HR Network in April last year, we interviewed an HR Leader and Executive Board Member of a Global 500 Company – someone whom had gained a place at the table and when questioned on the issue of HR adding value to the business, quickly moved to point out that this was a tired debate and HR needed to move on. HR must concentrate less on what they do and focus more on what HR needs to deliver, the goal to develop value-added HR practices not the fads and fancies. Nice to hear, however I must add that most of the HR people I speak to – there is a growing sense that some of the best HR people coming through are coming from non HR backgrounds.

An article by Mr Sathnam Sanghera at The Times on Human resources departments: I’ve never understood the point of them raised a heated debate between HR and non-HR at the end of the 2009 – the winner of the “Most Comments” and “Most Recommended”, Sathnam can certainly be commended for going straight for the HR jugular vein and bringing the debate to an up to date level of realisation for HR on how a good percentage of the public feel. He also laid claim that he wasn’t overly interested to complete all his homework on the subject of HR (or at least suggested that he didn’t), needling at any untouched nerves amongst his HR readership. It worked, it led to a fracas of on-line debate. Notably over the last quarter, The Times have reported on areas of HR, for example last week I blogged on “Pay for Performance” here again is a no holds barred account on Put Paid to the Pay Consultants from Mr Patrick Hosking (I am guessing his been talking to Sathnam as once again it goes straight for the jugular vein).

The transformation now expected by & of HR is daunting – the capability gaps are wide and the next 10 years are indeed (as reported in the media), critical for HR. The complexity and current demands of HR with the top agenda item being talent management aka ‘people’, its bringing HR closer to the CEO (whatever job title is adopted). Considering many still struggle with the model of “HR Business Partnership” that Dave Ulrich brought into existence in the early 90’s where in short; HR “must give value or give notice”, close to 20 years on is that not telling us something? The job title can now be found in many companies – the question to be asked – is the value proposition/capability?

There is also a cultural dimension in how the Executive/Board supports the profile of HR within the organisation. Organisation’s claim that “people are our greatest asset” yet fail to discuss people at board meetings. The truth is that while true (if there were no people we wouldn’t be having this debate or perhaps including ‘competent’ as the first word in the statement or other key assets which have been considered above the “greatest asset” during this recession such as 1. The brand/reputation 2. Fixed assets 3. Rights to natural resources 4. Money 5. Algorithms (IT Companies) 6. Secret recipes  7. Systems and processes 8. Customers 9. Patents) this clichéd sentence has been so abused that it has lost all credibility. In our online group some months ago, another article which received plenty of attention was that of Deloitte’s;  suggesting HR is at risk of disappearing as a separate function. Good marketing as a sponsored article for their outsourcing division, especially if the article reaches those companies/CEO’s where HR is not adding value to the business. I still wonder how Deloitte’s HR Dept felt about their consulting division’s claims?

I noticed the subject was also a heated debate back home in Ireland, a country now heaving with bureaucrats and wasted opportunities, a country that sent “two” of their ministerial team on a weekend trip via private jet to basically beg Mr Michael Dell for the +3000 jobs already set sail from Limerick to Poland. The round trip flights for two people at a cost to the Irish taxpayer of €164,000. You will hear no singing of a Celtic tiger, the character in the tune has been replaced by a sloth with a rucksack full of rocks on its back.

I enjoyed this snippet from Jeremy Clarkson – Top Gear over the weekend:

As we now know, there are one or two flaws in the concept of global capitalism. For example, if you have a suit and a side parting, you can use money that doesn’t exist to create money that does, in your own bank account. And you can keep on doing this until the whole world goes completely bankrupt.

At the other end of the scale there are problems too. For instance, if you are very fat and lazy and you cannot be bothered to get a job, the system will only really care about your plight when you die and you have to be hosed out of your front room because the neighbours are complaining about the smell. “And who’s going to pay for that hosing?” the men with side partings will say.

Still, I believe that the upsides for those of us who are not very lazy but do not have side partings far outweigh the downsides. Let me give you an example. It is now almost impossible to buy a washing machine that is anything less than brilliant. Or a burger. Because McDonald’s and Burger King offer tasty snacks in every town in the world, anyone selling inferior burgers made from stale bread and dead horses will go out of business extremely quickly. Of course, small retailers whine and complain when Tesco moves into the area because Tesco will nick all their business. Yes, it will, if what you are selling is expensive and rubbish.

That’s the core of capitalism. “Better” will always win the day. And it doesn’t matter what form “better” takes. Better can mean cheaper, more convenient, nicer, prettier, more tasty, more healthy. In some way, you have to be better than the other guy, or your kids will soon be presented with a bill for hosing you out of your sitting room.
Because the bosses of the giant corporations know this, they strive constantly to make what they sell better, and that’s brilliant for you and me. It’s why we don’t get punctures any more — because the tyre makers are constantly striving to be the best.

Consider, the HR function as the “very fat and lazy” that Jeremy describes above, HR has a ways to go before it’s ‘out of the woods’. My experience and I guess this is the lifecycle of business between recessions, is that it culls the excess and the complicated – those not adding value and improving the organisation’s DNA have been spliced or as I have heard a few HR misfortunes whimper in their embarrassment, caught on the receiving end of redundancies, “it’s time for a change, looking for new opportunities” …. no doubt it is.

A focus on “Player” not Partner to bridge the capability gap, the business “know-how” now required by the business and needed by HR. A new breed of HR.

Thanks to all for the comments and feedback below

Wordle-ed!

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About Marc Coleman

Marc is founder and Managing Director of the Pan European HR Network. He is responsible primarily for strategy, member networking, product development and business development.

23 thoughts on “HR = Hardly Relevant?

  1. HR Thread 1

    Yes, HR adds value to business; but, only if business is farsighted enough to capitalize on the strategic functionality of HR, and HR people can fluently speak the language of business.

    Significant roles in which HR can make value-added differences include:

    • Labour relations (as labour costs can be a firms single largest controllable cost)
    • Legal compliance (for health and safety, employment equity measures, etc.)
    • Training and development (identifying and eliminating performance gaps)
    • Allocating resources right people, right place, right time, right cost)
    • Employee performance evaluation (including succession management)
    • Compensation and benefits (is the organization getting the most ‘bang for their buck?’)
    • Contributing to employee behaviours such as loyalty, engagement, and motivation

    Being sometimes more of an ‘Art’ than a science, HR suffers from having too few instructors and practicioners who can provide hard numbers for HR policy and program outcomes. The HR field needs more people who are trained in measurement (especially validity), and the effective use of data to make workforce decisions,.

    Until enough HR people have this ability, return on investment (the basis on which all relevancy opinions are made) will not be a language HRMs are fluent enough in; and thus their participation at the Board Room table, along with other key stakeholders, will be minimal.

    Laura Mather HRM Generalist

    Laura, well said. HR is the most crucial department in any organization. If you don’t have the right people no Accounting, Finance, Marketing, or Manufacturing department will work effectively. I fully agree with your statement that understanding the concept of validity is essential for a HR practitioner, otherwise no sound selection system will function. And to you last comment: Yes, numbers speak!

    Hermann Schwind Professor Emeritus, HRM

    I agree very much on Laura’s lines and I am very happy that this topic has been brought up. Dramatic changes have continually shaped the foundation of our global business economy. Companies are confronted by increased competition, industry consolidation, globalization, changing market conditions and the demands of keeping up with cutting-edge technology. As the business world around us continues to change, so has the human resources profession. It has moved away from an administrative and highly tactical function to one that is more strategic, further impacting corporate evolution, return on investment and profitability for the entire company. The bar is continually raised for human resource professionals as the knowledge and competencies required to be an effective human resources leader continues to grow more complex. Today’s human resource discipline marries a strong business and financial acumen with the ability to provide strategic tools for organizations to reach their full potential.

    Unfortunately, in my experience, many COO/CEOs do still not offer HR a seat as a Business Partner within their management teams – they continue to cut HR tasks, responsibilities and positions and even push HR initiatives back by justifying it with cost saving initiatives. It might take some more time (and perhaps education?) until the executive management values the input from HR, and appreciates HR as an integrated business partner that directly influences the bottom line.

    As a member of HR round tables and professional networks I am recognizing that companies are beginning to search human resource professionals who are valued and trusted advisors, have the ability to become integrated business partners and have a demonstrated background of flawless execution, organizational effectiveness and a highly analytical and quantitative measurement system. As the existing “war for talent” intensifies and becomes increasingly global, I am convinced that the companies should become more focused on developing strong talent management and leadership cultures that are more closely aligned with the overall business strategies. These strategic initiatives will be driven and established by experienced (local) HR managers, guided by the CHRO of the company, to sustain a leading and competitive footprint throughout their respective marketplaces.
    In today’s environment eliminating HR tasks and cutting HR positions is the wrong sign – HR has become even more relevant than it ever was before….

    Martina Laudahn, PhD Head of Human Resources/CHRO at Adconion Media Group

    As I am studying Human Resources, I have determined that HR is the “spinal column” of an organization. It is where other aspects of an organization connect to and intertwine. If you take a corporation, you would realize that every department interacts with Human Resources for their departmental function.

    One of my professors in the masters in HR program I took, Doug Silverman teaching Human Relations in the Workplace, was telling about how a few years ago, you would never see an “HR” presence in the executive board and now you see the General Manager or Director in the board representing HR.

    I had a very limited understanding of HR, where they do “some stuff.” However, it is not the case. This is relate to a discussion I posted, “Traditional HR vs. Strategic HR.”

    Yes, traditional HR had its role in the “back seat” in an organization, but now HR is strategic, in the passenger seat, helping to navigate the organization and involved in all aspects and decision making of the organization.

    Syed R. Ahmad Human Resources & Environmental Management

    So the answer to your question:

    HR = Hardly Relevant?

    Answer:

    HR = Highly Relevant!

    Syed R. Ahmad Human Resources & Environemental Management

    Syed, I agree with Laura but not with Hermann in the sense ‘HR is most crucial department’ as it depends fully on its people! Laura’s remark about Business and The between brackets explanations of the subdivisions in HR are all but existant in many companies. I would even put a stronger emphasis on Performance Management and tie it to a yearly (maybe even Q-erly) Strategic Planning Process. The right people in the right place can be spotted and more important the opposite. And second or shared #1 is communication: be transparant about strategy and about expectations. From toplevel to the cleaner and vice versa (symbolically meant, not disrespectful).

    I have to say that I would go for jobrotation and have a business manager on the chair op HR every so often, as otherwise it looks cool to have ‘be the employer of choice’ on your strategic roadmap, but it will be an empty phrase and you know what: your people ‘feel’ that!!

    But sad enough figures, other than Absence & Staff Turnover ratios, are not easily at hand to prove the impact of these softer business priorities!

    Gwenn Kocken International HR

  2. HR Thread 2

    Great post Marc. My prediction HR will dissipate into a strictly transactional function and the transformational dimension will be taken up by the operational part of the organization, most likely quality where the deepest level of optimization knowledge resides. HR is stuck in the mechanistic model and probably in a death loop already as a critical corporate function.

    Dave Guerra Evangelist for Superperforming Organizations, Projects, and People, Author, Speaker, Super Coach, CEO

    Is your objective to get rid or HR or to change what it does?

    Dr Lionel Boxer Management Systems Auditor at SAI-Global

    Good question Lionel.

    In my opinion what is needed most is a way to unleash the trapped intrinsic motivation inside of most organizations. Either by getting rid of HR (and giving that charge to someone else) or changing what it does (taking on this charge)

    To my mind it is not HR that matters.

    What matters is that it happen. This is where the real value to the business resides. The economic impact from streamlining the transactions of people is dwarfed by the unlimited economic potential triggered the transformation of people.

    Dave Guerra Evangelist for Superperforming Organizations, Projects, and People, Author, Speaker, Super Coach, CEO

    Comment about HR in a 1989 conference paper: http://www.asq.org/qic/display-item/index.pl?item=3545

    I just found the original paper from the conference procedings- the author cites Konosuke Matsushita (exec director of Matsushita electric), “… THis is why our large firms give their employees three to four times more training than yours, this is why they foster within the firm such intensive exchange and communication. This is why they seek econstantly everybody’;s suggestions and why they demand from the educational syustem increasing numbers of graduates aswell as bright and well-educated generalsits, because these people are the lifeblood of industry. Your socially-minded bosses, often full of good intentions, believe their duty is to protect the people in their firsm. We, onthe other hand, are realists and consider it out duty to get our people to defend their firms which will pay them back a hundredfold for their dedication. By doing this we end up being more socially minded than you.”

    HR should help line managers achieve this.

    Dr Lionel Boxer Management Systems Auditor at SAI-Global

    Wow!
    Dave Guerra Evangelist for Superperforming Organizations, Projects, and People, Author, Speaker, Super Coach, CEO

  3. Alexander Crepin

    Dear Marc,
    I mentioned already on several forums that we are facing a shift, we are leaving the industrial Age and entering an new Era, the Information Age (?). We see that via broadband and mobile internet in combination with social media that different types of collaboration are emerging. Talents are inside and outside and alongside your organisation, life time employment is being replaces by a life time talent relationship, etc. etc.

    Typical Industrial Age staff departments like HR are under pressure because the standard or very specialised type of work is being outsourced or “done” by self service applications. Staff departments were establised to improve planning & control capacities.

    Now these days it is no longer about planning & control but about innovation, sustainable business, stakeholder engagement, proactive business support, global talent relationship building. This is a different type of league. For me HR will have to transform from Human Resources to something like Human Relations and Human Results for me this is Highly Recommended.

    Best regards,
    Alexander Crepin

  4. Vanita Kadam

    Dear Marc, I agree with Alexander that there is a shift to the new era of Information Age. Also the expectation and role of HR has changed from clerical to strategic partnership to meet the organisation direction. But the level of involvement that HR can have depends on the maturity levels of the top management in the organisation as well as the vision and mission of the organisation.

    HR is adding value to the business in varied ways:

    Developing ways and means for training and development.

    The policies, process etc from human angle makes it the best or worst place to work. HR plays a pivtol role in these initatives

    Identifying quality talent and retention of the same through varied employee as well as organisational initatives.

    Compensation management

    Human relations and employee engagements

    Regards,
    Vanita

  5. Jeff Dobbs

    Sadly, I fear my colleagues are wrong in their all too optimistic view of HR and our collective abilities to ‘add value’ to the business. That this conversation is between HR practitioners should be highly instructive; what would our customers say? In my opinion, and forgive the overly broad generalisations, several issues hinder the majority of us:
    - lack of deep understanding of the financials of the enterprise – if you can’t stand in for the CFO as they give a summary of the business to employees, shareholders, etc, you most likely need more work in this area;
    - a deep understanding of the strategy the enterprise needs to follow to realize it’s financial aspirations – HR leaders should be just as capable as any other functional leader in leading the development of strategy; most of us are all too content to take a back seat in this area;
    - too much ‘HR speak’ which tends to make great cocktail party conversation but can leave our constituents wondering what we’re talking about; speak first in terms of business outcomes and we’ll be much better off;
    - the expectation we should be given a seat at the table: nope, you earn it (through deep understanding of the business and then the development of HR strategies to help the business attain it’s aspirations) or you don’t get it.

    By the way, great to recognize we’re in the Information Age and the impact of social media has had on the workplace… I think the hard work is in front of us, namely how to we, as HR practitioners, lead the organization in knitting together organizational design, innovative work practices and social media across a global enterprise to create sustainable competitive advantages for our organization?

    Thoughts on THAT would be appreciated….
    Sadly, I fear my colleagues are wrong in their all too optimistic view of HR and our collective abilities to ‘add value’ to the business. That this conversation is between HR practitioners should be highly instructive; what would our customers say? In my opinion, and forgive the overly broad generalisations, several issues hinder the majority of us:
    - lack of deep understanding of the financials of the enterprise – if you can’t stand in for the CFO as they give a summary of the business to employees, shareholders, etc, you most likely need more work in this area;
    - a deep understanding of the strategy the enterprise needs to follow to realize it’s financial aspirations – HR leaders should be just as capable as any other functional leader in leading the development of strategy; most of us are all too content to take a back seat in this area;
    - too much ‘HR speak’ which tends to make great cocktail party conversation but can leave our constituents wondering what we’re talking about; speak first in terms of business outcomes and we’ll be much better off;
    - the expectation we should be given a seat at the table: nope, you earn it (through deep understanding of the business and then the development of HR strategies to help the business attain it’s aspirations) or you don’t get it.

    By the way, great to recognize we’re in the Information Age and the impact of social media has had on the workplace… I think the hard work is in front of us, namely how to we, as HR practitioners, lead the organization in knitting together organizational design, innovative work practices and social media across a global enterprise to create sustainable competitive advantages for our organization?

    Thoughts on THAT would be appreciated….

    Jeff Dobbs Vice President, Human Resources at EMCOR Facilities Services

  6. Alexander Crepin

    @ Jeff,
    You are right that understanding of what managers are dealing with is crucial.
    Understanding what talents can, will and should shouldn’t be overlooked! Do you need and HR department for this???? or just REAL & DEDICATED people managers who should run a business TOGETHER with the talents they are able to engage for their business targets? I have been working for a Swedisch company and they had a payroll officer and no HR, because the teamleaders were responsible for taking care of people matters. They could hire external specialist expertise from preferred / partner suppliers. Likely the answer depends on the maturity of management and the fte’s per team etc.
    .
    Making a business case is very helpful in ensuring that you show a business engaged approach to your HR work. However the Gen Y and Next Gen workers seem to have a different attitude towards work.
    Besides this 3P is becoming more and more an factor to look after, organisations have to be able to deal with People, Planet & Profit. Have a look at my ISO26000 & HR training on slideshare and I hope that you will notice that this also requires an other look at organisations than we learned in het management lessons of the industrial age.
    .
    Your last remark about the challenges we are facing in HR is very well formulated. It is al about change management and the difficulty in this case is I think that many HR practitioners will have to be part of this process themselves as well!! How to lead change if it requires you to understand and live that change yourself first?

  7. Douglas Long

    Many years ago (late 1970′s) I was approached by the local HR Department of a major Oil Company to help them justify their existence – the more I looked at what they did, the less I could justify their role so my consultancy was terminated!.
    Following this I had an article published entitled “Personnel Management in the Post Capitalistic Age”. In this I argued that the world was going through significant change and that the role of HR needed to change, too. I suggested that the role of HR would need to become more one of a small internal consultancy that supported line management in their HR responsibility: that companies would be less prepared to have significant sized HR Departments and would be pushing for line personnel to be responsible fore their own HR issues. To date I find that my predictions have been significantly “off the mark” – many organisations have continued to grow their HR departments and this has created many of the problems of relevance that exist today.
    As with any other support service, there is a real need for highly professional expertise that can be used by those who are actually making money in an organisation – but the days of HR being an empire are, I believe, well and truly gone (if, in fact, they ever really existed). I believe the future for HR lies in a genuine, highly professional relationship supporting corporate and line activities but not supplanting them in any way. When this exists I find that HR is not only welcomed at top levels but it also becomes a key contributor to strategy.

  8. Nic Brocklebank

    Thanks, Marc, for the article. I have to agree that ‘Hardly Relevant’ is probably a more catchy expansion of the HR acronym and one that fits the media’s portrayal. It also clear that asking the question of whether/how HR adds value is not nearly as useful as getting on and having a go.
    Jeremy Clarkson, as a business, appears to thrive without an HR function on his shoulder providing advice and ‘partnering’. Would the products and services of Jeremy Clarkson Inc. be different, if someone was adding HR value in his ear? Would he be more balanced or more extreme in his position on global warming, capitalism and motoring?
    For me, an area for HR to focus on – taking charge of the inspiration of our people and reigniting the energy that truly sits behind our economy.

  9. Crispin Garden-Webster

    Hmmm… I think that inspiration and energising is the business leaders job. The vital role for HR is in providing the competent design, facilitation and process that enables to leader to do this. HR’s role is to lead and develop the enabling frameworks around capability, performance, design and change process.

  10. Jim Scully

    I recently read The Southwest Airlines Way (Gittell) in which the author expounds upon Southwest’s ten practices for building high performance relationships, which she goes on to argue are the true inherent key to the company’s sustained “superperformance.” To make my point it’s worth listing them here:

    1) Lead with credibility and caring
    2) Invest in frontline leadership
    3) Hire and train for relational competence
    4) Use conflicts to build relationships
    5) Bridge the work/family divide
    6) Create boundary leaders
    7) Measure performance broadly
    8) Keep jobs flexible at the boundaries
    9) Make unions your partners
    10) Build relationships with suppliers

    I don’t know about you,.but I see a lot of work for HR in this list. Valuable work — not the type most HR organizations are doing most of the time.

    Like everything that exists, HR came into existence for a reason. So it’s not that HR is irrelevant, rather that have forgotten why we exist. (Hint: the answer is not to advance the profession)

  11. Portia Dinkins, SPHR, PPP

    I am new to this group, but I feel compelled to “chime in”. I think that, as HR Professionals, we have the responsibility of quantifying our value and establishing a clear and direct ROI within our organizations. As we have progressed far beyond the old “Personnel Department” mentality, we have to bring our value to light, and we have to be progressive in our approach. That means that we have to step outside of HR and learn “the language of business”, (especially in this economy). Examples: knowing about the impact of pending health care reform on employers/employees is fine, but providing valuable insight as an SME to the organization (before you’re asked) is imperative; or, developing a reporting system that shows a hard dollar savings to the organization in areas recruitment, labor relations, compliance, etc. and regularly providing that information to the organization (before you’re asked). These things are tangible. We are, in most cases, the only non-revenue generating department/division, so we have to step up and make ourselves known as “cost savers”. Just my thoughts.

  12. Mark Herbert

    Interesting discussion. As a successful HR and C level executive for 30 years I see merit in several of the discussions. Like one of the people on the original blog I have long encouraged HR departments to see themselves as internal consulting organizations rather than compliance and “score keeping departments.
    I agree with Dave that a big part of HR’s role should be knowledge and competency transfer- not trying to “own” those skill sets.
    In a previous blog
    http://www.newparadigmsllc.com/blog/2010/01/reinventing-human-resources-departments.html
    I talk about what I see is the significant opportunity and compelling need for HR practioners and departments to “reinvent themselves”.
    I was promoted from HR to C level because of my “hr” skills to a great extent.
    I think Dr. Boxer’s citation is a key. I heard a similar presentation by the President of Sony back in the 1970′s! They approach it differently.

  13. Reynolds Atkins

    It is perhaps a bit of a cliché, but the Human Resources function is only as good as the leaders of the company or organization it represents. A company that sees its employees as assets to be continually engaged in the growth, development and overall success of the enterprise will demand a Human Resources function that understands how best to identify, deploy and reward talent for sustained contribution. A company that sees its employees as largely interchangeable, easily replaceable, and insufficiently important to the business to invest in their training and development will end up with a Human Resources function competent at processing and administrative routines but mostly irrelevant to its day-to-day operations.

    The “trick”, if you will, is finding companies and organizations that appear to appreciate the new imperatives of talent management and require a Human Resources team capable of understanding and supporting the vision driving the company leaders. I would suggest that that means first and foremost developing a profile of the kind of candidate (and active employee) who will be successful in that company culture, identifying where those candidates can be found, creating a compelling story about the company, bringing the right people in as new hires, and making sure their first 30-60 days exceeds all their expectations. To create that profile will require a deep understanding of the business’ operations, the values and idiosyncrasies of its leadership, how performance is managed, what are the cultural imperatives that bind employees and management together, and how individual and company success are rewarded.

    I would argue that for those Human Resources functions that can bring in (or develop internally) talent that can enter the company seamlessly and be engaged and productive quickly, there will be a place at the table. At a company that cares only now and again for the quality and “fit” of the people it hires and regards training, development, rewards, and recognition as annual or “one-off” events that have little effect on its business results, that is probably not a table you are going to want to sit at anyway.

  14. Philip Crenigan

    A fascinating discussion and timely as many companies are now challenged by rebuilding the leadership capability and employment brand that so many abandoned in pursuit of the short term in 08 / 09. The themes above, which collectively help to create an ideal profile of an outstanding HRD, are a reminder that they are a very scarce resource, and memorable when one meets them . I hope that a good number of CEO’s and executive colleagues are following this discussion.

  15. Michael

    I think the issues are:

    In many countries the best minds are not getting into HR
    HR most times has an agenda seemingly separate from the business it supports.
    Makes little effort to integrate into strategy.
    Poor understanding of the business and technology

    Having said all this, there is no gainsaying the fact that HR can and does make an incredible difference to a company’s bottom line and to its people

  16. Don Dufort

    Sadly I think that the HR community, in general is cutting its own wrists and is perhaps stepping backwards from the path of progression they were once on.

    If we look into the past we will see that the 50s to 60 Personnel Depts. were the dumping grounds for managers headed for retirement … move them into personnel and they can administer the paring lot and speak to people. From there the growth of HR programs was based on psychology, sociology and business coupled with the drive to turn the field into a professional, integral part of the organizational fabric. Then we went overboard and began to educate and certificate anyone who sat in an HR office. So programs, of all sorts were developed to get people certified. Today you can find a myriad of certificates diplomas degrees … to the point that employers do not know what they are getting and generally do not get what they need for their specific organization. To my mind this is where the problems commence and why organizations are stepping back from having HR in strategic roles. For the most part the HR practitioners cannot handle those roles.

    Laura identifies some of the areas that an HR dept should be active in but that list should expand to at least include

    organizational structural change,
    Continuous improvement and quality initiatives
    mergers and acquisition facilitation, integrations, assimilations
    closures and sales of units or business startups
    all at the strategy planning and implementation stages.

    I don’t believe the HR person has to be capable of stepping in for the CFO any more than the CFO can stand in for the Head of the engineering department. But the head of HR should be versed in all aspects of the business and understand the operations from front door to the shipping dock, be able to read the P&L, input meaningfully and intelligently in all types of business situations. So perhaps the ideal would be a business generalist with a good foundation in the social sciences.

    To some extent I think that we are getting into too much navel gazing. Many HR practitioners are turning their attention to metrics. Not that measuring is not important but it is not the reason you are in the organization. And in a lot of cases the extensive, cumbersome measuring tools really measure nothing precisely or maybe nothing at all. Even a lot of labour productivity measures are suspect as I have seen may fail to be verified when held up to the light of arbitration or court hearings. Now I will agree that measuring is good to help one find deficiencies or identify where problems are but rarely have I seen the numbers prove out the ROI for an HR project. There are too many organizational dynamics to attribute any gains to the HR initiative. One HR fellow told me he was doing a ROI on a training initiative that his company was undertaking. I didn’t know if I should make the smoke or hold the mirrors. For example I undertook a project to recover 200,000 lost work hours per year, in one plant through a challenge to the rights under the collective agreement. We could measure the hours lost through abuse of breaks, we could determine the economic cost loss incurred by the company and we proved all of that to the arbitrator. Now to find the reward for the effort. Some $5,000,000 should have appeared on the bottom line at year end. Hell even a million would have been nice. Could not find dollar anything that flowed back to that HR initiative. Operations had some nice paybacks for equipment and plant restructuring. So we should focus on making the organization intuitively better and not get into the analysis paralysis.

    Organizations who move HR to the front line are not getting the full impact of what an HR dept should do Because they never develop the internal expertise that can mesh with the mind of the business. All they get is clerical application for all tasks. Ask a front line manager to take on a grievance, an OH&S challenge, prepare a brief for the negotiating team, develop a strategy for any HR initiative …. won’t happen to the same degree that an accomplished HR practitioner can deliver the same service.

    Are we relevant.

    We had better be because in reality organizations need HR just like they need IT or finance. But they need us to be as competent and as active as those disciplines. We cannot be the tall foreheads of the organization, nor the philosophers, nor the bureaucrats, not the enforcers. We need to be active team players who know how to lead, follow, participate and when it is we should do either.

    It is too much fun at the big table to miss the chance to be there. But that is really on you. Look at the folks who go to those meetings, what separates them from you, education?, experience?, capacity?. Maybe but probably more than anything they know the business and how they relate to it, how they contribute and how they become part of the team.

    Thoughts from a guy who was at the table and looked behind to realize that the next 2 HR people in line were not going to get to that spot when I left even if they assumed the head of the department.

    Take care

  17. Michael Homawalla

    The fact that this is being discussed so passionately shows our lack of confidence in what we contribute to organisational performance.

    In my view our problems are:

    The best minds have not been getting into HR
    Our Agenda many times seems different from the organisation’s agenda and from the business’ that we are supposed to support.
    HR Heads do not integrate themselves into strategy and in fact seem to resist such initiatives.
    In many organisations, HR is seen as stuffy and puffed up

    The good news – Things are changing. The young professional, at least in India, is ambitious and knows that he/she will have to break this stero type.

    All the best
    Michael

  18. Pierre Lauzon

    Reynolds Atkins has properly assessed the issue. The position that HR holds in an organization is only as good as it’s leadership. It is an important and valuable position in the management team that can assist the organization in acheiving their bottom line, however, it is a management team effort.

  19. Atanu Sengupta

    Recently many of the companies are in a mode of reorganising the traditional roles of HR. These are not the best practice but new way of thinking, no doubts:

    Areas to be centralised with HR

    1. Compensation plans, Job Evaluation and Grading
    2. Recruitment and Induction
    3. Employee Support Services (Employee Self Service, pension, leave, issueing certificates, legal assitance etc)
    4. Employee Relations.
    5. Validation of Payroll Claims and payments.

    Other favorite functions of HR, that is Performance Management, Training & Development, Resource Planning, ERP etc etc should be handled by the department concerned.

    HR Strategy should be a joint responsibility of HR Head and the CEO.

    Atanu Sengupta Saudi Arabian Airlines

  20. Dianne Stewart

    LOVE THE QUESTION!! Yes if undertaken in line with the business HR is very valuable to a business, however one of the major challanges that HR face is that very few practioners have any business/commercial knowledge or exposure. I have spent over 10 years working in operations and HR, which has given me a valuable insight to understanding how the business works thus enabling me to tailor solutions and strategy to fit accordingly, not the other way about! As in many professions there are good and bad examples however in my opinion (based on experience) HR need to be more focussed and aware of the business, walk the floor, and undertake business development for the function. Its not widely understood what value HR adds, and they are often only seen during the bad times, redundancies, disciplinaries ie the process police etc. We need to show how HR can be effective by advertising and marketing our function, working with the business and its people. Its not a given, its down to us, the HR professionals to demonstrate our value to an organisation

  21. meaghan rath

    I am new to this group, but I feel compelled to “chime in”. I think that, as HR Professionals, we have the responsibility of quantifying our value and establishing a clear and direct ROI within our organizations. As we have progressed far beyond the old “Personnel Department” mentality, we have to bring our value to light, and we have to be progressive in our approach. That means that we have to step outside of HR and learn “the language of business”, (especially in this economy). Examples: knowing about the impact of pending health care reform on employers/employees is fine, but providing valuable insight as an SME to the organization (before you’re asked) is imperative; or, developing a reporting system that shows a hard dollar savings to the organization in areas recruitment, labor relations, compliance, etc. and regularly providing that information to the organization (before you’re asked). These things are tangible. We are, in most cases, the only non-revenue generating department/division, so we have to step up and make ourselves known as “cost savers”. Just my thoughts.

  22. Alan Arnett

    I agree with several people here that these discussions can get too focused on measurements to ‘prove’ we add value. Business leaders don’t value Finance because of the annual accounts, or Production because of their weekly stats or Marketing because of the number of people on the mailing list. Business leaders value people who can help them to solve problems or achieve ambitions, and above everything they value people who make things happen, not people who talk endlessly.

    Too many HR folk think they are being strategic by selling stories of ‘ideal’ organisations, either from books or consultants or from things they have read somewhere. That’s back to front thinking. You don’t get the seat at the table by telling leaders they need to change the culture when sales have just gone through the floor. You get the seat at the table by helping them fix business problems.

    Outside HR a true business partner is someone who has an investment in the business and helps to increase sales, increase efficiency, develop new products, etc. We don’t need new ‘metrics’ for HR – we need HR to focus on business.

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