Senior HR managers aspiring to become board-level HR directors are hitting a glass ceiling and missing out on promotions to line management such as chief operations officers.
Increasingly, the UK is following the US where more than 50% of Fortune 500 companies have HR directors with no previous HR experience.
At the heart of the problem lies a lack of knowledge and understanding of the company’s business. Modern companies want board directors who truly understand their industry. Today, knowledge of HR practice alone is not considered enough.
Traditionally, an aspiring HR director would build their general knowledge of HR practice, gaining expertise in recruitment, training and development, compensation and benefits, employee and industrial relations etc. They would rotate through these functions gaining an insight into the business before stepping into an HR director role.
Specialisation and expertise
But, increasingly, these functions have become much more specialised and we have seen the development of HR ‘experts’. This trend, compounded by the rise of centres of excellence and outsourcing, has prevented many HR professionals from gaining the breadth and depth of management experience within the business.
The HR function has become a victim of its own success: by becoming more specialist and improving the quality of advice and intervention to the line, it has failed to keep abreast with the real changes within the business. Meanwhile, the widespread adoption of the ‘business partner model’ means that chief executives want their HR directors to be partners to the organisation with a real understanding of their business.
The extent of the problem was underlined in a recent study by Guest and King, which revealed the HR profession is poorly perceived by line managers. The survey found only 47% of line managers believe HR professionals feel comfortable discussing the business and only 35% of them are willing to discuss business matters with their HR team.
Before Malcolm Beane became chief operating officer at XL Capital, a specialist in global insurance, reinsurance and financial risk, he was head of HR at investment bank JP Morgan. Beane was appointed to that position with little HR experience. His background was in operations management and he held the position of chief operating officer at JP Morgan before heading up the HR function.
Beane agreed that these are challenging times for HR professionals who, in the modern business world, must act as strategic advisers to the board.
“To do this, they must understand the implications of HR decisions on the day-to-day running of the business,” said Beane. “As a result, the most senior HR positions are increasingly being filled by senior line managers who have spent years in the business.”
In his book HR Champions, David Ulrich of Michigan University identifies four core competencies that the modern senior HR executive needs to be a successful business partner. He says HR business partners must be:
- Strategic advisers to the board
- Experts in how the business is organised to improve business efficiency
- Champions of the staff
- Agents for change.
According to Ulrich, the key to success for modern HR champions is knowing what questions to ask. He believes that knowledge of their company’s sector and time spent ‘on the line” is the most important thing.
Beane agreed: “It is about asking the right questions. But often HR professionals are not comfortable challenging line management.”
So what makes a good head of HR? According to Stephen Sidebottom, HR director at financial services company Nomura: “The best HR leaders are business managers focused on success through people. This has to be based on both strong technical HR expertise and practical commercial experience.”
Bearing this in mind, the two most valuable skills HR professionals can acquire are market knowledge and leadership competencies.
For the former, you should research your company sector and get to know the business. Attend industry seminars and conferences to gain knowledge of the market and research your competitors. Networking is also vital. As well as expanding your contact list, you will pick up information about your industry sector.
For leadership skills, training and executive coaching will help but there is no substitute for experience .
To gain this, you should volunteer for projects outside your area of expertise whenever possible. This will force you into difficult and uncomfortable situations and build your confidence in dealing with them. Also, analyse other successful individuals. Identify what they do well, why you respect them and then use them as your role models.
Niall FitzGerald is head of HR search and interim management at career and talent consultancy Fairplace