Firstly, thanks to all of you who contributed to the lively debate following the recent post "Will the HR function have a seat at the corporate table in 2008?". I was merely highlighting some interesting thoughts from the Inflexion blog, and didn’t expect such feverish input from so many of you! (And before I continue, I promise this will be my final rendition using the corny phrase "seat at the table"). Anyway, I have been under pressure from several people to put forward my opinion in this topic, so here we go:
HR used to be merely "personnel" and looked after the administrative activities related to basic employee needs. It wasn’t until the ’80s when the wider berth of "Human Resources" was developed where HR would be activity involved in all issues people within a firm, and not just the basic admin, i.e. recruiting, organizational design and development, corporate culture, compensation, career planning and counseling etc. The challenge of HR leaders was to get taken seriously at board level and prove their worth to the business. Not an easy task where you are not directly related to revenues and there are always more "critical" issues to be discussed before people strategy. The HR struggle had begun.
Then came the onset of HR suites like Peoplesoft, whereby it became vogue for HR executives to apply metrics to their organizations to help base management decisions. Where else in the company was there a more comprehensive view of staff profiles, compensation, attrition-rates and performance than in the HRIS? Hence, where finance departments could show the board how to budget and forecast the business to aid decisions, HR could (in theory) link employee performance with the business. Part of the problem has been that HR (unlike finance, for example) hasn’t done a good enough job of embracing technology to demonstrate real value metrics to the business. It has been stuck in the weeds of blocking and tackling, and not focused enough in areas that get real board attention.
And then the wave of HR outsourcing hit after 9/11. All this achieved was a very public dissection of the "strategic value of HR" as several high-profile companies grabbed at reasons to move out as many HR people as they could into service providers, or out of the firm altogether. It has taken a few years for HRO to iron out its issues, but it had the impact of alienating many HR leaders within firms, and driving them further away from the corporate table. However, I am convinced the HRO industry has now found its balance and the real HR issues are back at the forefront of many organizations’ agendas.
My view is centered largely on the skillset of the HR professional today – it’s too focused on the legal issues, compliance, managing the basics… and not enough on delving into corporate data to provide real input into driving a talent strategy into the organization. Moreover, we need more "business managers" in HR – people who understand the real business issues, and how to help their firm hire, manage and retain key talent. HR is the most important function in today’s organizations, but it has simply not been developing in the right manner. Hence, my thoughts are around HR helping to instill world class HR principles and practices into today’s managers. I once managed a team of 14 senior people and it was one of the toughest challenges of my life. I needed support, advice – and a venting outlet – to help me do this effectively. The success of my whole business function centered on my ability to be a good manager. This is where HR, in my opinion, comes into play. It is there to support today’s managers, who are under ever-increasing pressure, to get the best out of their people. I have seen so many positive examples of where this works in firms… and, unfortunately, some less successful examples.
Will it get there in 2008? Professor Dave Ulrich, with whom I have enjoyed discussing these issues on several occasions, outlines excellently the roles HR departments must fulfill to deliver value. His mantra is simple: HR must play a role in implementing state-of-the-art strategies that are tailored to the needs of the business... an "operational executor role". In a world of rampant change, where firms are constantly globalizing, restructuring, outsourcing, divesting and acquiring, the need for the operational executor has never been so intense. It is my belief that we will see the roots of this happening in 2008 – otherwise businesses will struggle to survive and change in these complex times.
Posted in : HR Outsourcing, HR Strategy
Thanks for the great article. The author points to a number of factors that will help move company for the next phase of the company’s development.
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Phil,
I subscribe to the fact that Human Resources is the driving factor in sound HR practices. It also depends on your HR leader. Behind every success and failure in our business is a person. To the extent that you are hiring right, and your HR leader can share candor with your senior management team; the end result is added value in your intelectual capital. I also believe that traditionally our frame of reference defaults us back to the fact that HR has not had a seat at the table and it requires 360 leadership to include HR in the day to day strategies.
Hi Phil,
In industries where there is linearity between the strength of the workforce and the topline or the bottom-line, the role of HR in recruiting & retaining talent is key. However, one mustn’t forget that typically in such organisations, the recruitment & retention is not exclusively done by the HR but by the line management as well. Coming from a services background, I have always perceived HR as a processing unit that facilitates the setting up of processes within the organisation with little say on what should be done but with more how-to responsibilities. Even as far as retention goes, the HR has very little leeway in offering counter measures to employees offering to resign being bound by the “do not set a precedent” mentality. It is ironical that the role of HR is reducing to back-office in industries where people are the most important assets. Perhaps the industry realises that it is more effective that line management be empowered to tackle talent issues than some HR department sitting in an ivory tower.
Whether HR should have a seat at the corporate table is a chicken & egg problem. As long as the responsibilities of HR are not elevated there is no reason for it to have a seat, while one could argue that unless it is elevated to a more strategic level, the responsibilities would remain at status-quo. Personally, I don’t see how elevating HR to a more strategic level solves the talent management puzzle.
Regards,
Amit
I agree entirely with you about the strategic character of Human Resource function that instead of being silo(ed), transactional and merely operational as has been traditionally considered should be a pervasive driver of the corporate strategy, and facilitator of managerial, behavioral and leadership potential and a key element of corporate differentiation and competitiveness for the years to come.
I support your idea in the sense that HR function should recover its seat at the corporate table as soon as possible. My original response some days ago is coincident in this appreciation.
I believe that top-notch talent is a context where corporate knowledge is an essential asset will become in the next competitive advantage.
Thank you, Phil, for sharing your ideas and opinions about such interesting theme.
Octavio
I think we are asking the wrong question. There is a “seat at the table” for human resources issues, no well run firm can ignore them. Who occupies the seat is another matter. Until the HR function sees itself as a business function, the seat will be occupied by someone else.
If HR gets a seat, you better clear the table for all the paperwork they’ll bring.
I disagree.
HR can only really have a seat at the table if they:
1) Are valued by the management team as more than administrators
and
2) Do more than just be administrators.
The company culture will do much to decide if HR is at the table. The quick way to determine their standing is look at the CEO staff meetings. Is HR at the table?
Dwayne – I’m glad I don’t work at your company!
Phil.
I feel the HR function [historically] has been an underestimated vital company role. A large trend in the last 15-20 years has been to outsource and/or hire consultants–mainly in the larger private sector. Another trend has been to change the decentralizing HR function to a centralized capacity. With the coming of age in management trends, such as “MBO”, “TQM”, “Six Sigma”, and the like, the fact is that the current focus is to measure the success of human capital and to do that by a metric based standard. With the assistance and support of team players (CEO, CFO, Legal Counsel, etc.) the HR function, in my opinion, will have a seat at the corporate table. The current economy, however, shows that the pay level of that level of HR responsibility and expertise has gone backward, not forward.
Of course there’s no doubt about it. I always felt and understood that the most important and pivotal function in any organization would be that of Human Resources. Cause for one simple reason it deals with people and people form the core of any function. And since every organization believes in his / her employees for ensuring timely functioning and delivery the burden of recruiting, maintaining & sustaining the diverse bunch of talent pool becomes all the more a challenge. Therefore, the HCM is directly linked to business of any company for that matter, and i have personally come across many companies who have recognized it and doing very well. I feel that the HR function has taken it’s due seat at the corporate table. I think what it needs now would be a little more recognition!
I think it’s time we resurrected this discussion!
The talent topic has NEVER had such a prominent place on the outsourcing conference agenda as it has today. The IAOP (http://www.outsourcingprofessional.org/) has declared outsourcing as a profession and publications such as Global Services Magazine (http://www.globalservicesmedia.com) have hosted much discussion on the same. So, how do we get HR involved in this critical talent dialogue?
Lori Blackman
http://www.dnlglobal.com