Thumbs down for HR jargon

2008

It is a phrase loved by HR people, but even the most jargon-friendly managers struggle with the term "human capital" and have little idea what it means.

A study by the UK's Institute for Employment Studies has found that such phrases are poorly understood within the workplace, with managers more inclined to use terms such as "people measures", "workforce intelligence" or even "key people indicators".

What's more, speaking in incomprehensible jargon makes it less likely that organisations will secure buy-in and support from the top, something the study recognised was crucial to the success of any HR initiative.

The research also found that, while organisations all tended to use some basic measures in common – for example headcount, absence rates, employee turnover and so on – there was no standard set of measures that organisations could put in place.

The research covered 14 of the UK's top private and public sector organisations including the Royal Bank of Scotland, the BBC and the NHS.

"Every organisation differed in how they identified, used and disseminated their key measures and what was very important in one context might be much less relevant in another," the IES study found.

When it came to securing buy-in, the trick seemed to be to find out what was important for the top team and present it straightforwardly with some pointers to help interpretation, the IES recommended.

"Once the attention of top managers had been captured, the questions that they asked typically led to managers throughout the organisation becoming involved," it concluded.

Yet top teams quickly lost interest if their attention was not grabbed and maintained, with the risk they would simply decide resources could be better deployed elsewhere.

Dilys Robinson, IES principal research fellow, said: "Measuring the value people bring to a business can be tricky but is vital to monitoring the health of your organisation.

"HR plays a crucial role in making the links between things such as employee engagement, turnover and vacancy rates, and customer satisfaction, and measuring their impact," she added.

"Although it may seem daunting, with the right planning and working closely with management, people metrics can do a lot to monitor business health," she concluded.

The IES research is just the latest in a long line of polls over recent months questioning the value of HR and its ability to make a significant contribution at boardroom level.

Last month, for example, a study by US consultancy Globoforce concluded there was still a huge gap between what senior managers wanted from HR and what they were actually getting most of the time.

Similarly, in May a survey of more than 600 HR professionals and 100 non-HR managers by U.S think-tank the Human Capital Institute and software firm Vurv Technology found that HR leaders simply were not up to scratch when it came to the vital tasks of talent management and business acumen.

Back in April, a study by consultancy PricewaterhouseCoopers argued there was little evidence of HR having increased its presence or profile within the boardroom, despite years of arguing this is where its future lies.

And in February, Luke Johnson, entrepreneur and chairman of UK TV station Channel 4, created waves by describing HR as "necessary evil" and "a burden on the backs of the productive workers".

Older Comments

Thanks Nic, as usual, well said.

Why is it that people who hold positions within organisations that are responsible for 'people development' want to call it something else?

Having been around a long time now, it seems to me that in general, the 'people development profession' may have an inferiority complex. Perhaps they think they have to prove themselves in the eyes of the rest of the organisation. There is one simple answer to this. Every person working in this area should have one goal in mind - to work themselves out of a job. After all, it is the responsibility of every manager to manage and lead his or her people. Yes, managers may look for help from time to time to do this, and this is where the 'people professionals' can add value. However when providing this assistance, they do need to keep in mind what they can do to assist managers to improve their business performance, not strangle them with meaningless policies, procedures and terminology.

As this survey points out, the term 'human capital' is just another meaningless jargon word in a long list of meaningless jargon words that have sprung up in this profession. The closest this profession got to giving themselves an accurate description of what they do was 'Personnel' - a word which seems to have disappeared from their lexicon.

Cheers

Bob Selden Author, 'What To Do When You Become The Boss' whenyoubecometheboss.com

Bob Selden Switzerland