It’s
been 10 years since Keith Hammond wrote, “Why We Hate HR”. The human resources
profession, led by their representative advocacy organizations, like the
Society of Human Resource Management (SHRM) have spent a great deal of time and
money to move the needle on HR’s image amongst employee populations and in
boardrooms across America. The result --- its 10 years later and many still
hate HR but the reasons that Hammond put forward have begun to change.
In
2005 Fast Company’s deputy editor Keith Hammond reduced every HR division to an
obsolete company appendage consisting of the least educated, talented, and
business minded people in the corporate world. In his famous article, “Why We
Hate HR” Hammond summarily writes that, “The human-resources trade long ago proved itself, at
best, a necessary evil -- and at worst, a dark bureaucratic force that blindly
enforces nonsensical rules, resists creativity, and impedes constructive
change.”
Hammond
had survey power on his side. According to the Hay Group, for example, only 40%
of workers valued their company’s ability to retain talent, only 41% believed their
performance evaluations were impartial and only 58% considered their job
training valuable. In today’s view, from two recent PwC CEO surveys, 66% of HR
teams are not prepared to manage talent and 63% of CEO’s are concerned with HR
not having the right skills and talent to lead their company in to the future,
all that with 40% of major projects having no ROI calculations performed as a
part of decision making process.
Hammond
also had other writers and additional data on his side. For example, David
Sirota (Wharton School Publishing at UPenn) says that “IT and HR are repeatedly
rated the lowest,” on surveys trying to rank the best and worst company
departments.[i][i]
So in
virtue of these deficiencies, under-trained and under-talented HR departments
lack both business acumen and the experience and ability to argue strategic
issues. It’s been 10 years since Hammond’s article, and HR still isn’t any
closer, a bit more vocal perhaps, especially if you like reading self serving
snippets or promotional fodder on LinkedIn.
And
that’s the thing. Its 10 years later and while some of the reasons why
employees still hate HR have changed---not much has changed.
Some
of the reasons in 2015 include---
Complaining about not having a seat at the big table…
Look
at the best CEO’s and best companies, especially financially profitable ones, 9
times out of 10, the human resources executive is a C-level peer. HR should, in
every company have their own seat at the big table, certainly not reporting to
the CFO, COO, Chief Legal Officer or anywhere else. So HR’s complaint is well
founded but poorly positioned to make change happen.
The
result is, frankly, everyone is sick and tired of this HR complaint and it
creates its fair share of animosity and counterproductive behaviors, and just
some of that can be annoying, agitating, and stir up some hate.
The
answer lies in the problem. HR managers and CEOs fundamentally approach
business from different and disparate angles. The two aren’t speaking the same
language. Take the difference between how they both talk about value. For CEOs
the formula is simple: companies make money the way toasters make toast. If a
toaster doesn’t make toast, lots of toast, it’s not a very good toaster. If a
company doesn’t make money, lots of money, then it’s not a very good company.
But HR
gets caught up in the semantics of terms like ‘value added’, ‘transformative’,
‘best practices’ and ‘engagement’ and cant connect with what they think is this
mysterious CEO fascination with the bottom line. HR people fixate on what they
want value to mean, and try to impose
their definition by showing how they cut benefit costs, save recruiting dollars
and validate training as an investment that they don’t know how to quantify.
Of
course, social and financial goals are not mutually exclusive, as IBM[ii][ii] and General Electric[iii][iii] show, but setting priorities for how to properly combine
the two is fundamentality different between the big table and HR. Take this
passage from Bernard Marr explaining this difficulty:
HR departments are
trying to serve two masters – which, in most cases, is not very successful. On
the one hand, they are there to provide support for the employees and, on the
other hand, they are there for the company and the senior management to help
manage (and monitor, discipline, appraise, etc.) employees. This conflict of
interest can cause friction and in many instances HR departments swing to the
‘support the company’ side, rather than the ‘support the employees’ side.[iv][iv]
The
opposite is just as true.
Because
the fact of the matter is that HR works for and in the interests of its
superiors and its superiors have a profit-based mentality. When HR fails to
understand what that means to how they should attack things, the big table can
see it as a hindrance to the bottom line.
That’s
the thing: talking up the latest trends does not, by itself, improve the bottom
line. You can’t tweet your way to the big table. Big data, evidence based HR,
social media, engagement surveys, best practices, change management, don’t get
you a seat at the big table, either. New compensation plan designs or cutting
costs doesn’t set you in the right direction. These aren’t the creative and
innovative solutions and initiatives that constitute real strategy and leading
the organization forward.
Having
the vision and the ability to execute on the CEO’s strategic mission to advance
the bottom line and the long term health of the company and its employees;
that’s what the big table needs from the HR function.
They aren’t strategic no matter how many times they say
so…
Let’s
start at the top; CEOs are tasked with running companies that focus as much on
the company’s long term viability and growth of the business as on the
maximization of shareholder value. In a free market economy, there can be
pressures in the short term but over long periods of corporate history we have
all seen that innovation, sustained results and talent partnered end to end,
achieve the greatest results for all.
HR
cannot simply become strategic by using the word in its latest set of
PowerPoint’s. The typical HR strategy or “strategic plan” talks about
engagement, succession, diversity, human capital analytics, executive
compensation, performance and talent management, all of which are huge blankets
that are certainly needed and certainly contribute to a basic conversation on
managing the business but often serve to fill the weighty category of
“strategic buzz words” pushed by consultants to CEO’s whereby HR managers need
to look tuned in to the critical issues of leading the workforce.
Let’s
examine one slice of strategy, “talent.”
Before
the turn of the millennium (1998) studies showed that companies who coveted and
sought out the best talent were the ones most likely to succeed (see The War
for Talent).[v][v]
With all things being equal in a globalized economy—capital, strategy, and
R&D—the one thing that ensures a company’s rise over the rest is the
recruitment of the best and brightest to make its creative and tactical decisions.
But
it’s not a matter of simply finding any talent. It’s a matter of finding those
talented individuals who meet the particular needs of the company at a given
time, and—to give more concrete criteria—who can add flow instead of friction
to the business. In order to add flow, add value, accelerate results; HR has to
identify those, “critical points of the
business where the strategy succeeds or fails, and provide relevant talent
solutions.”
Asking
whether this or that action adds friction or flow to the business is a good
start. Why on earth HR hasn’t, is nothing short of baffling.[vi][vi]
When
asked what keeps them up at night, everything you need to understand about why
HR needs major help reveals itself. When asked you get answers like Obama Care,
retention, skill gaps, inclusion, engagement, communications, a whole laundry
list of HR centric speak.
What
keeps the best HR leader awake at night, the one that can beloved and revered
is easy to identify --- whatever keeps the CEO and business leadership awake is
the answer.
So if
HR wants to be a strategic partner they need to think like a strategic partner
and take on the same issues as the CEO and the organization. Its time that the
HR strategy finds a new strategy.
The overuse of “business partners” and other spurious
phraseology…
Its 10
years later, and HR departments, led by the consulting community have realized
that they have run out of paradigm shifts to leech onto, so they’re either
renaming old ones or recycling a few for their newer greener version.
Let’s
look at a huge effort that adds no value… the title game and word magic.
Why do
companies have HR Business Partners titles? Did you ever notice it’s the only
function in the company that uses the business partner moniker? What about my marketing business partner, or
sales business partner or my administrative, finance or janitorial business
partner. Aren’t we all partners already? Why does HR get this extra special tag
line? It got this special tag not
through effort but through convenience in most cases. Business line executives
want a business partner; they want someone who knows the business, its drivers,
its levers, its competitors, its needs, wants and people. So to meet that need,
HR departments added the term Business Partner to their titles, no actual
business knowledge was added in the process, just the title. The HR business
partner is mostly aspirational and should be dropped immediately.
Another
title, amongst many, is ‘talent acquisition directors’. Didn’t they used to be
called, simply enough, recruiters? Recruiter is great for two reasons: it’s not
ridiculous to say out loud and they used to actually recruit talent. Everyone
should know better by now, including human resource executives.
What
is all a symptom of? HR is insecure—and rightly so— about its position that it
uses inflated jargon to pawn itself as owners of much need intellectual
capital, without which the corporation could never survive.
What’s
needed is commercial knowledge and business impact, not spurious phraseology.
Then and only then can HR personnel demand a seat at the big table.
Failing to understand human capital management…
Andrew Carnegie said, “The only irreplaceable
capital an organization possesses is the knowledge and ability of its people.
The productivity of that capital depends on how effectively people share their
competence with those who can use it."
Managing human capital is managing knowledge and
the creating of new knowledge; making it available to those who can use it most
effectively and for the highest return. The capital is not the “body” it’s the
mind. Look at human capital management in terms of diversity initiatives. The
key measures are often measured in expressions of ethnicity, gender, age or
cultural profiles. Human capital managers measure the color of skin when they
should be managing the color of thought and ideas. A perfectly diverse
corporate profile, whatever that would be, would be claimed by the human
capital manager as a success if there were a nice mix of different colored
marbles in the bucket. Rather real success is the promotion of knowledge,
creativity, innovation, inclusion and customer journey that creates shareholder
and stakeholder wealth. Human capital success comes from the diversity of
thought and experiences purposefully combined and directly applied to our most
promising opportunities.
Human capital management speaks of itself in terms
of best practices. Using the term best practices is like, ‘try the veal, it’s
the best in the city’ and we know how that conversation ended. Whose “best”? My
best? Your best? Best practices are something cooked up by someone else to fit
their strategy, not yours. But since the average human capital manager/human
resources executive/ business partner/talent manager/chief people office really
doesn’t know how to deconstruct a strategy in to its fundamental parts, someone
else’s best practices are the path of least resistance. The best HR teams
reframe situations such that the business leads are encouraged to put their
highest value resources on the company’s biggest opportunities rather than
using someone else’s best practice hoping for the right outcome. Human
resources should see their competence and other best practices as departure
points for improvement rather than replication.
Business people…
We
still hate HR because they don’t have the skills or desire to become business
people first. They haven’t had the experiences they need to create value. They
aren’t ROI driven and not only from a business sense but in terms of their own
function as well. Companies invest a ton into the HR function and the function
can’t articulate what it delivers to the bottom line let alone even trying to
have a top line contribution argument.
And
that’s why we have some hate still because the truth of the matter is that we
have the least sophisticated business people looking for and trying to develop
the most talented business people.
Even the
bachelor’s degree in HR amounts to little else besides sibling rivalry to a
general studies B.A. Communications classes take up the bulk of major-sensitive
credits while electives get divvied out to classes like, “18th
Century Shakespearian Culture in Northeastern Scotland.” Finance and business
classes scarcely make the cut. Mathematics, statistics and economics are almost
nowhere to be found save in the ‘minimum requirements’ which can be satisfied
by an online community college course, if required at all.
There are several well known liberal arts colleges where you can earn a Human Resources management degree without taking a single business course.
There are several well known liberal arts colleges where you can earn a Human Resources management degree without taking a single business course.
What
about a Masters in something like HR management? Is there at least some of hope
at the graduate level? Well, according to Forbes the answer is no. Forbes ranks
a Masters in HR management as one of the top 10 worst educational choices in
America.[vii][vii]
The
most glaring example that demonstrates the human resources capability as a
business catalyst comes directly from
the one organization who should be leading this charge and that’s, the Society
for Human Resources Management (SHRM).
SHRM has been pushing for legislation
that requires public companies to report on a set of human resources metrics in
their annual reporting and accounting disclosures: i.e. SHRM proposes to codify
standards that measure workforce diversity, turnover, job training, etc. But
the proposal has been met with backlash from CEO’s, investors and other HR
organizations. Looking at SHRMs efforts,
it’s not even clear that the measuring standards they propose could be applied
company by company to produce objective results. What a classic blunder, trying
to create a tool from a functional perspective that the end user, the CEO doesn’t
want and doesn’t support. If the leading organization for HR professionals
doesn’t understand how to position itself to add value to the business, how can
we expect that it can advise and lead its members in the same effort?
So after 10 years we still hate HR,
maybe a little less for old reasons, maybe a little more for new reasons. Is
that so wrong? In their biggest attempt for relevance they missed the mark
wildly and in a hugely public fashion they proved one thing and left no doubt
remaining--- they don’t understand how to deliver value to their key customers.
Will we love HR 10 years from now?
Will
love and salvation shed our hatred of HR departments through things like best
practices, workforce analytics,
evidenced based HR, engagement consultants, diversity initiatives and social
media recruiting of millenials?
Nope.
No
doubt, these are more sophisticated tools than what personnel departments
possessed in the past, but you can’t give the keys of a Ferrari to a 17 year
old. And fancy tools, like fancy cars mean nothing--- it’s all about the driver
and that’s where human resources executives need to focus. Driving results
through the language and lens of business, by taking their functional expertise
and in conjunction with business leadership, develop an integrated approach to
leading people, managing process and delivering the best custom tailored
solutions aimed at commercial success, looking at the top line for once instead
of $1,000 in cost savings amortized over 3 years.
The
only hope is for HR leaders and human resources personnel to become a learning
function--- to learn business---- to learn what approaches and efforts are
needed in their organization to drive value creation and long term corporate
wealth. HR departments need to take on the fundamentals of leadership and
competition and the technical perfection of process and execution. They need to
understand the economic levers of their businesses from the front line as
drivers of “mission” and to stop seeking self worth through buzz words and
strategic consultant speak. Again, it’s time that the HR strategists finds a
new strategy.
While
we may still hate HR ten years after Hammond’s article, there is a clear first
step to finding love. That is taking up the challenge of changing HR’s
behaviors and viewpoints and embracing the fundamentals of business. To never
hire a person on the HR team who hasn’t served in a business role or another
function first. To decide that the best practices of others should be the
bottom, not the top. To strip away the artificial phraseology and esoteric
regalia. In that challenge is accepting
fault, wherever it lies; then looking forward and tackling it with conviction,
commitment and courage.
Name:-
John J. Falcetta
Call
Us:- 610-372-2460
Email Us:- johnfalcetta@yahoo.com
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