6 Reasons Why HR Needs to Change

The Human Resources department in any organisation is having to learn the hard way that change needs to be thrust upon them if they are truly going to regain the prominence it once had, and still deserves. There is no way to put this nicely: HR has been pushed aside and given a role that does not bear much influence to the way a business is run. It has been pilloried as a worthless department in any business, with regular talk of it’s demise.

Here are six points that must be considered if HR is going to regain it’s rightful spot as a major part of any business.

The Role of HR

Is the role of HR suitably defined? Such is the level of ambivalence within some businesses as to what is HR,  that they have been reduced to nothing more than administrators – paper pushers – and box tickers. Major decisions around hiring, ER and terminations are handled externally to HR and the only contact they have with any of these decision-based areas is to sign off on the actions. They will handle questions on awards, payroll or legal issues central to the people-related areas, but won’t have the advisory, leadership or control within these issues.  I’ll mention here, though that whilst it is true in some cases the case is HR does have a central role to play in these matters, the fact is a large number do not.

The role of HR is to be focused on the management of issues surrounding employees. They have to be integral to the way employees are hired, engaged and retained and must be acknowledged as being the ones who look after the engine room of any organisation. The definition of HR – or Human Resources – should not be dismissed. ‘Human’ implies the people in the business, and ‘Resources’ involves how they are utilised. How simple is that?! There must be a realignment to what HR stands for. Their highly relevant, hugely responsible role is integral to a company’s success, and by handing the full people-related strategy back to them – across all areas of hiring, ER / IR, policy development, implementation and management as well as grievance / termination procedures – and in turn giving them the confidence of the whole business to implement and control these areas, their clearly defined place will be restored.

HR, though, does not need to be an advocate for employees. As Allan Harcrow mentions in his look at the “360-Degree View of HR” for Workforce.com, HR: “Advocating for employees pits [them] against senior management, which is not strategic”. In other words, HR must build a bridge between employees and the business, with both equally prominent in dealing with both key areas. If their role is going to be one that is strategically focused and aligned with the structure of the business, it must ensure it approaches employees and the business with equal sharing.

The Path of HR

What do I mean by this? Put simply it is the career path of the average HR practitioner. Yet, here is the point to be made, and the question to be answered: how does the average HR career path affect overall standing and relevance of HR to overall business strategy?

Firstly, what is the usual trajectory of an HR career? Primarily it goes like this: University –> HR Administrator –> HR Analyst / Officer –> Senior HR –> HR Manager –> HR Director.

OK, that is relatively simplistic, and these days, some use of ‘Talent Manager’ or similar is used as substitute to HR, but overall, the point to be made here is that from university, the role is pretty much HR focused and that’s it.

So what? Isn’t that what is supposed to happen? This is true, there is a claim to be made that HR is a career path from one end to the other, yet one fundamental point is often ignored – and it is this point that gives some HR departments a bad name: where is the business acumen? I love that term ‘acumen’. It’s one of those terms that supposedly means a whole broad range of things, but generally has no real definable meaning. Where, then, is full knowledge on how a business runs, how it’s branding affects its place in the market and what role people play in the two. This is my definition of acumen (and I’m sure there are others). Does HR really have full knowledge of the inner workings of the business and how decisions impact it? I am of the opinion it does not – but the blame for that should not be laid on HR.

The fact is that throughout the years that HR has been a feature of a business, there has been no concerted efforts by a fair proportion of businesses to allow HR to integrate into greater decision making processes – and to allow them to see what these decision mean for the overall health of the business. It doesn’t seem to impact them until an employee knocks on their door to report issues. By then it is usually too late to understand the full circumstances outside of the issue and have any impact on them. They remain insular as they move through the ranks of the department and don’t grasp the finer points on the running of the business.

This is at a huge detriment to any business because HR must be made aware of what is happening within all aspects of an organisation for one simple reason: the people, again, are the driver of all areas and HR must be the guides to address how their work impacts areas beyond their station. They must move beyond transactional and into strategic.

Simple.

The Voice of HR

OK, well we have a couple of ideas what HR is facing in the greater business and market. How do they then get the message across? There seems somewhat of a general inability to voice these concerns or to trumpet the vital nature of HR to the greater business community. The Australian Human Resources Institute (AHRI) do an outstanding job of giving HR representatives the tools and knowledge to make a success of their roles. However, it is only to an extent they are involved in advocacy on HR matters to the wider community. Can they do more to push the actual role of HR in business? Indeed. Perhaps expansion of AHRI to include advocacy to business groups on the greater role of HR in business is needed.

Several years ago I was involved in an advocacy program with the Australian Information Industry Association – an advocacy body for the ICT industry. This program was around workforce challenges and looked to work with government to build acknowledgement of issues faced by ICT employers and employees alike. This model is a great one to borrow for the HR industry, and a great way to advocate the role of HR and its importance in the greater business world.

Social media, too, has a place in advocacy and creating a voice. As it is now a powerful tool to get a message across, utilising this power to showcase HR should be fundamental. There are indeed a number of areas where HR is gaining a larger and larger voice, particularly with LinkedIn where a number of large groups do exactly that. Recently, I was involved in a Twitter discussion about getting communities of HR professionals together. Harnessing this instant messaging system that the likes of Twitter  and similar allow a quick gathering of like-minded people that can action something in a matter of moments.

Whatever the tool, it is about a voice, advocacy and influence. If HR is going to regain the ground lost and promote itself back into the boardrooms and decision-making areas of business, it needs to regain these three elements if it is going to have a hope of restoring it’s place.

The View of HR

Let’s be honest, the reason the Voice of HR needs to return – and be a loud voice – is to counter a number of negative views the industry receives across the employee base, wider business and even wider-still community. Understanding the views held will give purpose and direction to the voice.

The opinions are out there, and, boy, are they brutal. Here’s one from a few years ago, but still echoed today: The thrust of the argument? HR is past it’s used by date and has to go.

More recently, this report looked at whether the HR department is there for the employees or not. The anecdotes are hard to swallow, but whilst they don’t necessarily paint HR in a harsh light, it is still questioning their function.

Finally, this recent article on Linked In called for a full overhaul of HR – to the extent of removing it entirely from businesses in preference to an outsourced model – the fact it was written by a HR outsourcing specialist notwithstanding.

This is what HR must deal with – poor perceptions based on employee, candidate and external feedback, and an increasingly loud chorus of those wanting HR to be removed from core business and outsourced. Of course, only negative points grab headlines, but the commonality of these issues strikes as something in need of addressing.

Does HR need some sort of PR exercise? A ‘HR Professional Day’ or similar to focus on the worth they have? Whilst that would be fun, truth is it needs to start with the department and improving its perceptions – starting locally to improve globally, if you will. Far better cross-engagement with staff and management, increasing the view that HR is there for the business by supporting its employees – which in turn improves the status of management and the greater business.

What it needs to do is to break down the stereotypes, and actively identify the value of HR. It needs to be more vocal, more engaging both inside and outside of the business and throw some clear light on what role – and the significance of that role – HR plays in a company’s success. Harness the power of social media fully (it happens to some extent, but needs greater activity) and really push against the naysayers that converge there to bemoan the role.

Above all, HR needs to lift its game. Seemingly content to be pushed into the ‘administrative function’ it has become, the need to regain control of the human approach is paramount. Engagement as mentioned above is real basic stuff, and vital if it is going to build its vitality in business. It is not going to get there by complacently allowing subjugation and final outsourcing. This is offsetting eventual death of the department, and if there is no one willing to push against it, then there might as well be a whimpering, pathetic death.

The Worth of HR

So why is this voice needed? Why should HR engage with businesses to improve their lot? Put simply, HR is vital for any business, and until it understands its full worth, it will be stuck with permanent complacency.

I’ve heard many people suggest name changes to reflect more people-focused approach. That is fine, and incrementally that could happen. However, changes occur not around name but around function. HR will always be HR and the stigma it has can only be changed by investing in what it actually is and what it has to offer.

HR is about people. There is no other way to look at it. People are the lifeblood of any organisation. If a business has a business plan and a financial plan and a marketing plan and whatever other plan, the key ingredient in getting these plans off the paper and into action is the people – employees, managers and directors alike. Making sure that these people are happy, engaged and safe gives them a sense of belonging and will lead to increases in productivity and job satisfaction. Sure, managers are there to provide that, but HR ensures it is happening. As the organisation gets bigger, based on growth from a jump in productivity due to engaged workers, the significance of HR’s role should become more and more evident.

Active HR professionals are there to keep tabs on engaged employees as well as ensuring the business benefits from this. The establishing of benchmarks, policies, procedures, methodologies…and then ensuring they are all implemented all head towards the business benefiting from a workforce geared towards goal realisation and values adherence. This isn’t a one-off thing. It’s a continually evolving entity, and the impact HR has on ensuring there is compliance from all areas of the business is fundamental. No amount of outsourcing will make up for the intimate knowledge great HR professionals have as to the inner-workings of their business. And those HR Professionals who have solid relationships across all areas of the business are more likely to have their worth clearly identified and, more importantly, seen in a worthwhile light.

The Risks of HR

Without the voice, the worth, the proper role identification and a more substantive path of HR, what could happen to it?

Very simple – it will disappear. HR will either be absorbed into the business by managers, or handed over to administrative staff. Or, as mentioned before, it will be outsourced.

Not moving approaches, not redesigning or not redeveloping HR will see it fail. The warning signs are everywhere, yet precious few see them or refuse to ignore them. HR’s vitality will be lost to complacency, and ultimately the people function of a business will suffer accordingly.

Additionally, businesses who allow HR to fold do so at the risk of their business. As mentioned in the Worth of HR, the engaged workforce is imperative to a businesses success, and as growth happens, the burden on managers to have this on their plate alongside every other pressure will see it pushed aside – to the detriment of the people-related strategy.

Take-Away Points and Recommendations

OK, let’s get the obvious out of the way first: why is a ‘recruiter’ leaping to the defence of HR? The gatekeepers to any possibility of recruiter /employer working together, why the heck would I want to defend their position? Well, it is true I am a recruiter, and have come up against plenty of HR professionals in my time. Yet the bottom line in all this, across recruitment and HR, is people. We are in the people industry, and it is my firm belief that a business, any business, needs to get their people strategy spot on if they have any hope of success. So whether it is sourcing the right candidates or giving them the tools to be a solid part of any employer, it is combined efforts that give businesses the best ways to build and grow. That’s it. Pure and simple.

So with that in mind, these are my views on what HR needs to do to maintain and increase relevancy.

  1. Activity breeds success. Be far more engaged with the business. Do the administration, of course, but develop better engagement models, growth models, development programs and employment structures and processes to articulate why the role of HR has a clear business focus required for further growth
  2. AHRI needs to be more vocal. Advocate the role of HR within the likes of ACCI, BCA and CoC around the country. As the peak body for HR Professionals, its role can be broadened more to push HR’s status in business
  3. One idea I heard was to develop clear divisions in HR across People, Culture and Training, allowing clear, discernible separation of activity, under the banner of the broader HR (or whatever term is best).
  4. Businesses need to think more about the role of HR, and more importantly, incorporating it within greater business strategy. This sounds like a pipe-dream, but surely there are businesses that recognise the value HR brings and are able to demonstrably improve perception based on activity.
  5. The role of HR needs to be more defined. There must be better screening of candidates to ensure business ‘acumen’ exists. That is, they understand the fundamentals of how a business operates and are likely to be more engaged as to how operations and HR interact. This is likely to show HR as being far more engaged within the business.
  6. Following on point 5, HR practitioners need to increase their business savvyness. This is especially and critically important for those new to the industry and in their first role. Be actively engaged with how the business operates, runs and is run. Give HR a presence in all areas. It’s the best way to improve preconceptions.
  7. Finally, an acceptance of the new frontiers of HR information must be embraced. As Chris Stevens of Melbourne-based TalentFlow suggests, HR needs to be “innovative in the digital era in continually adapting  its core processes of hiring, payroll, talent etc” as it reflects the “changing world around the organisation”. It is incredibly vital that businesses, and HR, look beyond HRIS as the start and finish of its information activity and look at adaptability within the newer realms of digital, online and cloud, and start to really innovate ways in which complete alignment of its various processes are integrated into the business. In other words; HR needs to be more clever.

Like your average car, the People Strategy in any business needs proper maintenance and on-going care and only then will it work well and continually work brilliantly. HR, for all its perceived issues and faults is the maintenance and care division of any business, and it is these businesses that recognise it who get the best out of their people. Whereas those that do not, continually fail to recognise that success is people based, not strategy or marketing or cashflow. It’s people. If they cannot be properly engaged through the HR functionality, then that car will be permanently in the garage.

Top 10 Hiring Mistakes – #1 – Not A Plan In Sight

Going for a bushwalk into an area you have not been before without a map and proper preparations is akin to trying to blow up jelly with dynamite: it’s pointless and potentially dangerous. The most skilled bushwalkers have a map, compass, provisions and equipment to prepare them for any eventuality that confronts them when hiking through unknown regions.

The same can definitely be said when hiring, where the most unprepared and unplanned often come unstuck. Yet, significantly, most businesses do not have that plan in place when it comes to hiring and tend to go into hiring woefully unprepared.

Alongside the preceding 9 mistakes, the lack of a plan creates some real issues for a business and its susceptibility to making bad hiring decisions. These include:

  • Financial cost or rehiring, re-orientation, re-training, re-advertising and potential legal costs
  • Poor staff morale
  • Loss of potential and current customers and new business opportunities
  • Damage to brand
  • Strain on HR or the HR function
  • Workplace toxicity
  • Further time and labour costs in rehiring and covering the bad hire

Which will lead to significant out-of-pocket costs that no business of any size can afford.

If you want to see why getting the hiring right, and planned thoroughly is important, just think if you want to have all these costs and loss hitting your business. If you are heading into a hiring process, and there is one or more steps that are missed or brushed over, it will mean the difference between a quality hire and a costly fail. Additionally, if that plan is not incorporated into overall business strategy, the possibilities of a bad hire impacting business growth via the above hits are staggeringly high.

Thing is, poor hires are those done off the cuff. Usually after some emergency has hit the business (see #9 – Panic Hiring), employers want or need to cover the gap as quickly as possible. This is catalyst for bad hiring decisions, and the lack of a proper plan – heading into the hiring bushwalk without the map, compass and provisions – is probably the most dangerous (and let’s be honest, dumb) action a business can conduct.

Why does this happen? For one, it is the preconceived idea that planning and working through that plan is time consuming, and not worth the hassle. I mean, really, going into a lot of detail to make a hiring decision hardly seems worth it right? Well, let me put it this way, if the only cost in the hiring process is time, you have come out in front. Because as sure as water is wet will a poorly planned and executed hire surely come back and bite you where it hurts.

Another reason is pure ignorance. A fair majority of people who do hiring are not aware of the issues getting it wrong can do to a business and blissfully dive into a hiring activity with nary an idea what to keep an eye out for that could be potentially problematic for them. It’s not until something happens that they realise they have well and truly stuffed up.

Above all, and a common thread throughout the Top 10 Hiring Mistakes; it is complacency that drives poor hiring habits. The second hiring is seen as a bother, or apparently easy to do, or not worth investing time to get it right, is the moment it falls apart.

Hiring needs time, it needs a plan and it needs care. Planning gives a structure that even the most inexperienced employer can follow. When the greater majority of businesses are small or medium and may not have a dedicated recruitment arm much less an HR one, it is important that a structure be in place to allow those charged with hiring the best can do so effectively. Mainly, though, it avoids missing crucial elements that will impact overall decision making and lead to those bad hires…and navigating that dense forest becomes an easy and achievable task.