Luke Johnson's rant against HR in yesterday's Financial Times set all the work HR has done around improving its reputation back by several years.
In his column, he claims that "Human resources is a management term that should strike fear into the heart of every self-respecting entrepreneur", boasting that he has radically downsized HR in companies he has run and "business has gone so much the better for it".
This viewpoint is perhaps not surprising from a private equity investor, whose core mission is to buy up ailing companies, strip them of all their assets and reap the profits...
Even in the ruthless world private equity deals, HR has an important and commercial role to play in helping the investors achieve their goals. After all, a business is nothing without its talent.
Johnson argues that HR, like IT, legal and marketing departments, doesn't sell produce, it just consumes. Is he planning to rid his business portfolio of all these functions as well? A company with just a sales operation might look good on the profit and loss sheet because all it does is make, rather than spend money, but its long-term prospects will be shaky with no infrastructure, no succession planning and a high turnover of staff.
No-one's arguing that HR should exist for HR's sake - it must prove its worth commercially - but suggesting HR is "a burden on the backs of the productive workers" is underestimating the value of HR entirely.
Comments (3)
Good response Jo.
I've answered back too:
http://flipchartfairytales.wordpress.com/2008/01/31/the-truth-about-the-hr-department/
Posted by Rick | January 31, 2008 11:32 AM
Posted on January 31, 2008 11:32
Hi Jo, Rick,
Yep, agreed.
As I said in my post on this, Johnson's focus on HR's role in dealing with employee problems doesn't say much about his own management style.
And private equity certainly needs to learn some lessons about progressive people management. In a previous rant, I described my view that the problem with talent management identified by McKinsey recently was mainly down to the short-term focus of (not just but especially) private equity firms.
So I think we can largely discount Johnson's views.
But I do think that the comments that have been added to the FT article reinforce something we already know: that HR does have a significant PR problem.
Posted by Jon Ingham | January 31, 2008 10:21 PM
Posted on January 31, 2008 22:21
Mr. Johnson is entitled to his opinions. All that I know is that I have stayed gainfully employed in HR for close to 30 years by cleaning up the "people messes" created by those "who don't know that they don't know."
robert edward cenek
Cenek Report
www.cenekreport.com
Posted by robert edward cenek | February 1, 2008 12:41 AM
Posted on February 1, 2008 00:41