What is it about HR?


With the search for talent a priority for today's businesses the standing of the Human Resources department has never been higher in many organisations.

But while the importance of recruiting, retaining and developing key employees moves up the corporate agenda, perceptions of the HR department are more difficult to shift and it continues to get its fair share of stick from some quarters.

In the UK's Financial Times last week, columnist Luke Johnson sent shockwaves throughout the personnel profession when he described HR as a "necessary evil, and "a burden on the backs of the productive workers."

Johnson, who is also chairman of UK TV station Channel 4 and runs Risk Capital Partners, a private equity firm, warned that with a recession looming employers would be wise to "clear away a lot of pointless administration," and sympathised with Robert Townsend, boss of car hire firm Avis, who in his book Up the Organisation suggests firing the entire personnel department.

And a report released last month by UK business school Roffey Park also suggests the HR profession has its work cut out demonstrating its worth.

In a survey of over 400 UK employees the research found that 53% believe the function is reactive rather than proactive while 37% said they thought the function lacks credibility.

Ask Mike McDonnell, chairman of the Chartered Institute of Personnel and Development (CIPD) and until recently president of the European Association of Personnel Management, HR's European body, why people still think the jury is out on HR and he will tell you it's because it is a "qualitative function operating in a quantitive environment."

While the effectiveness of most parts of the business, for example sales, IT, and marketing, can be measured by their results, McDonnell says it much more difficult for businesses to calculate return on investment from an HR initiative.

He said: "If you spend £100,000 on a new IT system, you know you will get X% efficiencies. But it's much more difficult to pin down cause and effect when spending £100,000 on a leadership development programme."

Looking across Europe McDonnell also thinks the lack of professional qualifications within the profession, also leads people to think that "anyone could work in HR." McDonnell says he would like to see more countries follow the lead of the CIPD in the UK and Ireland and introduce a series of standards for HR practitioners.

At HR consultancy Penna, director of Human Resource Consulting, Grahame Russell admits there are many of examples of bad HR around that are causing a burden for companies. "But the same could be said for bad supply chains or customer service," he adds.

What's ailing HR, according to Russell, is that the function is in transition. While progressive organisations are using HR in a strategic way to "get the right people, in the right place at the right time," some companies still see their HR people purely as an old –style personnel function to carry out low value administration like payroll and employee records.

"These are the ones giving HR a bad name and many companies have or plan to move these functions to a shared service or to outsource them, he adds.

But on the flip side, says Cary Cooper, professor of organisational psychology and health at Lancaster University Management School, there are many world-leading companies who put HR at the forefront of their strategy. He points to household names such as IBM, RBS, Shell and Unilever who all sponsor the school of Performance HR at Lancaster University.

"In world-class companies HR is now at the top table," says Prof Cooper who says there is now overwhelming evidence that progressive HR policies around talent, retention, motivation and flexible working attract the best and the brightest workers and contribute to the bottom line.

He also agrees bad HR still exists but to take Johnson's advice ands scrap the whole HR department would be akin to throwing the bay out with the bathwater.

Says Prof Cooper: "If you have no HR department and you treat people as disposable assets, they will have no loyalty to the organisation and will soon leave when times get tough."

Older Comments

I agree wholeheartedly on what has been said about HR. Yes they are operating in a quant environ with qual attitude. So, should they be blamed for all this? I dont think so.. If we look at the number of HR personnel operating at the board level in FTSE350 its only 3 and the best part is these people have not come through the traditional CIPD route. HR is not seen as a strategic function because more than 60% of their time is spent on mundane processes and policy formulation. The problem is they are not creating value perse but by doing their roles are they not protecting value or preventing value erosion? Given that most of these managers have come through the qual route, shouldnt it be the responsibility of the strategic thinktanks to bring out measures to help HR quantify. It would also help if companies stop hiring people with traditional HR backgrounds as their understanding of current business needs, should i say is limited. That said HR managers could also do their bit to alter perceptions. How many of them are actually seen on the shopfloor? How many actually try to understand the business? Isnt it time that they shift to base camp and realise that HR is about managing people and not process?? Are the gods listening

Ram Raghvan Reading, UK

well here we go again bashing HR and moaning about their lack of credibility. it just does not stop!

But why is it such a national sport. I agree some HR epople leave themselves open to this but the profession ( not the CIPD) and the many HR people who are striving to be more professional and to add value to the business deserve somecredit.

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