Accounting for HR

HR
practitioners need to start asking themselves how HR can effectively contribute
to the business. Is HR really adding value? asks Denis W Barnard

I
have often wondered why it is that if HR needs to account for its existence,
senior company officials continue to appoint HR staff in the first place? In
many cases each organisation seems to have its own flimsy agenda for this, with
specifications ranging from company scapegoats, welfare workers, corporate axe
men and backstops for feeble management.

Now,
after decades of trying to justify their own existence, HR practitioners should
be asking themselves the big questions: what are the key areas where HR can
effectively contribute to business; should HR be represented at board level –
and why?

At
the heart of any responsible business there has to be an infrastructure of
contracts and policies that have a facility for rapid updating on a continuing
basis. Apart from the compliance and clarity that these provide, there is also
the increasingly important issue of risk containment, given the escalating
scale of remedies for cases of failure by an employer.

Any
manager of any function neglects this aspect at their peril, because one lost
case can spawn a raft of like actions. To add to these core necessities should
be a compensation and benefits system that works for company and employees
alike, and a serviceable information system for management reporting.

Second,
it is essential to have a plan and operable procedure to develop the people you
have, and future ones – unless you are in a business that can afford to lose
staff and replace them at no cost. Most managers want stable departments with
staff who have been around so long they can do the job blindfolded.

What
they don’t understand is that they are not maximising the talents of those
people who have them and want to move on, and are losing the opportunity to
introduce new blood in the entry-level jobs.

Third,
an honest appraisal system coupled with a realistic development programme is
needed, realising that there will not always be room for everyone further down
the line, certainly not for those who don’t make the grade. The desired result
will be better people moving through, up – and on occasion out – of the
organisation in a way that benefits both sides by trading performance and input
for development, experience, reward and continued employability.

Any
company "touched" by a meaningful HR presence should be left with the
legacy of an environment of challenge and examination.

Good
ways of achieving this are deploying facilitation skills to assist business
teams to brainstorm new ideas or problem solving; hooking them on staff surveys
to take the temperature at regular intervals (and doing something about it
where necessary); making them analyse exit interviews to see where they are
failing and, crucially, get colleagues at all levels to stop thinking like
employees but more like individual business people. Everyone should ask
themselves "if this were my company/money, would I really do this?"

The
links between HR and recruitment have been unravelling for some time, and maybe
in the near future they will effectively die altogether. In many cases, the
only expertise HR has to offer on this is selecting the medium in which to
advertise and schedule in the interviews. By all means design the best
processes for successful sourcing and selection, transfer the skills to their
rightful owners – the line managers – and then let it go.

I
maintain that HR people can initiate the above three strategies but only until
they are rolling satisfactorily. After implementation, the necessary skills
transfers should be effected and then it is time to move on, not start building
business empires and polishing your alloy wheels. An outsourced provider can do
any or all of these aspects, and certainly after that the ongoing strategy and
application can be purchased off-the-shelf from one.

In
case anyone reading this is wondering why I haven’t mentioned aligning HR to
the business plan, I should say that many companies don’t have a business plan.
Some have one but keep it secret, and others have one but having formulated it,
seem to forget it exists. If you have access to one that genuinely seems to
drive the organisation, the job will be made easier. The three actions outlined
above are common for any business to succeed.

As
for HR representation on the board, I’ve yet to hear a really sound and
sustainable business reason for this. To flip the matter over, I read recently
one of the downsides of outsourcing is that it minimises the chance of HR
people becoming directors!

Perhaps
we should consider: what are the areas of HR operational expertise that are
either non-transferable or unavailable elsewhere that can justify the cost of a
board director year after year? It’s a time for HR professionals to take a
reality check on what they are doing, how long they’ve been doing it, and if
they can make a case for their existence in the form that they recognise it.

Denis
W Barnard is CFO and a founding director of hrmeansbusiness ltd. www.hrmeansbusiness.com

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