The value of HR – let’s stop kidding ourselves

I wonder if I can shed some light on why so many HR people would take
exception to Ralph Tribe’s (Getty Images HR Director) idea of recruiting HR
people "with teeth". He genuinely believes that HR people should add
as much value to their business as possible, and quite right too. The problem
is that most HR people think they are adding lots of value already.
Unfortunately, many are deluding themselves.

Take the recruitment officer as an example: fully trained and probably
qualified to use a range of psychometric and other tools. What is the value of
their work? The recruiter, obviously, will argue that they add an enormous
amount of value by making sure they assess, and select the right people for the
business. Intuitively, this argument has high face validity. However, it shows
no understanding of the concept of added value, which always has a pound sign
attached.

Across the road is a competitor company, with an equally experienced
recruiter, doing exactly the same things (is that "best practice"?)
and managing to recruit the right people. In other words, the recruitment
officer’s contribution is to ensure both companies compete on the same terms.
This work is important but not of high value – an apparent paradox. In effect,
good recruitment practices add no more value than ensuring each company has the
latest specification computers on their desks.

If we had to put an actual pound value on these HR activities all we could
do is simply look at the total employment costs of the recruiters. This pound
sign is not that impressive. If they resigned tomorrow the company could get
the same value simply by recruiting a replacement (or outsourcing). Moreover,
current HR salary levels suggests that the supply of such people happily
matches demand. There are plenty of IPD qualified people out there.

Don’t shoot the messenger. I did not invent the concept of added value but I
fully accept its implications. The challenge for HR is to face up to this harsh
reality. If you really want to add value with large pound signs attached you
need to move on from professional qualifications and best practice. You have to
be better than your competitor’s HR people. This means being more innovative,
more business focused and with a greater range of skills and expertise – that
is, more teeth.

The only perception of HR’s value that really matters is the board’s
perception. Unfortunately, their intuitive view is HR has limited value. That’s
why the conventional wisdom is swinging round to outsourcing HR.

The choice is yours, learn what added value is and look forward to a
rewarding career or join your nearest HR service centre.

Oh, and learn to live on a lower salary.

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