Thumbs down for HR jargon

Aug 06 2008 by Nic Paton Print This Article

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 Ė for example headcount, absence rates, employee turnover and so on Ė 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".