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?”.
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