Human resources as an organizational function and its leaders are receiving heaps of criticism these days. I must say that some of it is justified! Pundits, academics and business executives alike have been criticizing HR for not being business savvy, having poor strategic thinking and analysis skills, not having predictive models, innovation, and even a lack of activeness, agility and competence.
Whoa! Enough already. But there is more….
Perhaps the most strident, recent criticism comes from management guru, Ram Charan (whom I admire), in the July-August, 2014 issue of the Harvard Business Review. Ram advocated splitting human resources down the middle, giving the administrative portion to Finance and redefining HR’s focus on developing the talent capabilities of the organization. He also advocated that future Chief Human Resources Officers (CHROs) should have multi-disciplined business experience and profit and loss experience.
Long-time human resources consultant and University of Michigan academic, David Ulrich, responded to Ram Charan (in the same HBR issue). David wrote that human resources shouldn’t be split (at least not like Ron Charan advocated) because HR is about more than just talent management – it is also about leadership and organizational capability development. David acknowledged some of Ram’s concerns, and he encourages human resources leaders to get out of their comfort zone and use “outside-in” thinking.
The debate continues… The July-August, 2015 HBR issue has a series of articles on how to re-make human resources. It is a good read!
So why is it a great time to be in human resources in the midst of all this criticism? Here are seven reasons.
- CEOs want and need a trusted talent management and organizational capability leader at their side. Ram Charan is not the only advocate for CHROs being trusted leaders, at the same level as CFOs. Many CEOs have advocated this, including Google executives Eric Schmidt and Jonathan Rosenberg in How Google Works. As the US and many international economies expand, the need for smart talent management practices will grow!
- There’s compelling research on what works and what doesn’t in our profession. We know that comprehensive talent management methodologies work. Consider McKinsey and Company’s research on talent management showing that the companies scoring in the top quintile of McKinsey’s talent management index earned an average of 22% higher returns for shareholders than their industry peers. (The War for Talent, 2001.)
- Predictive models. There are awesome predictive models for accelerating hiring, improving selection reliability, leadership, performance management, the success of mergers and acquisitions, and increasing employee engagement, to name a few!
- Focus on operational excellence. Many human resources organizations have changed their names to “People Operations” to emphasize their alignment with business strategies and a focus on “HR that works.” (See Work Rules by Lazlo Bock and Retooling HR by John W. Boudreau). These HR organizations focus on flawless execution so that the business has a reliable and dependable partner. They use the best academic research and their own process metrics and analytics to understand what is going on in their workforces. The name change, for me, is not as important as the focus on excellence.
- Countless technology platforms targeted for small, medium, and large companies have been developed to improve the management of HR administrative tasks and free up HR leaders to move beyond bureaucracy.
- Enabling individuals, teams and organizations to succeed. Nothing is more career satisfying for me than seeing an individual, team, or organization overcome a major obstacle, learn new skills, and find new confidence. That is why many of us chose this wonderful profession. All the criticism in the world doesn’t change that!
- Monday is different from Tuesday. Whether coaching, working with executives on strategy execution and accelerating change, designing a new sales incentive plan for a global sales force, working through tax code issues for multi-state income taxes, or dealing with an emotionally charged employee relations issue, you can’t say human resources is boring!
It is a great time to be in human resources!
Demand for our profession will surely grow, but human resources is at a crossroads. That means change. We need to be more business savvy, strategic, analytical, and innovative. We need to use the best research, be active, agile and deliver flawless results!
Victor Assad is a strategic human resources consultant and executive coach who works with key decision makers and human resources leaders on talent management, accelerating change, leadership development, and other strategic initiatives, such as mergers and acquisitions, strategy implementation, and flexible workplace.