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

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

Denis W Barnard is CFO and a founder director of hrmeansbusiness


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