Has HR Outlived Its Usefulness?

By Joel Myers

This is not a rhetorical question. The role of HR has been debated and reconsidered in boardrooms across the country for over a decade now. Mutinous arguments to disband the entire operation have been met with zealous battle cries to reinvent the department historically dubbed the "soft side of business". What's all the commotion about?

To begin with, we should call a spade a spade. HR departments have long been the object of many an office smirk. Why is that? I suspect it has something to do with outcomes. Inter-company departments or operating units like marketing, sales, manufacturing, product development and information technology are responsible for measurable deliverables. HR has traditionally run a different kind of shop. They have historically been defined by what they do versus what they deliver. This is the Outcome/Value-Added Millennium. Senior management is raising expectations of all departments and operating units; the days of HR being spared outcome reporting are over. And if they're not reporting outcomes in your company, they probably will be soon.

Let's face it, business has never been more competitive than it is today. Globalism, electronic commerce and supply chain strategies are raising the bar for just about every industry. Today's job market has put the squeeze on companies everywhere to optimize their operations. We're talking about a press for excellence. Companies aren't just competing for customers; they're competing for employees too. This means that senior management must take the "soft side of business" seriously to fully compete in the marketplace today. Savvy management recognizes this. But what exactly are they supposed to do about it?

New Roles for HR?

For companies to rise to the new challenges of competing today, they must move beyond the traditional mindset of what HR is - and isn't. Following are some common sense approaches for getting the most out of your HR investment:

1. HR should be a strategic partner with senior management.

If someone from HR does not currently participate in your senior management team, they should. HR has a rightful place at the strategic planning table. This is critical not only for their understanding of the marketplace issues shaping the course of the company (and therefore their ability to contribute in a meaningful way to the outcome), but also for you to gain insight to the human drama that is shaping the company from the inside-out. Taking traditional HR roles and responsibilities to the next level requires change from the top-down. The change is one of mind set for the CEO, line management and HR professionals. It is about mutual goal setting and working as a team. Teamwork isn't relegated to staff only. If it doesn't play out at the top, you'll notice the effects downstream.

2. HR should be the voice of the workforce.

HR has always been the "go-to" place for employees with job-related problems or concerns. Today's business climate requires that HR take this role to the next level. Truly exemplary companies today excel in not only knowing their customers, but in knowing their people. For example: if workforce morale is suffering, employee attitude research can help articulate the issues so that they can be rectified. If the problem lies with management, HR is a natural place to look for leadership skills training. HR has an important opportunity to interpret employee feedback to management so that they understand why morale is low and how they can affect positive change.

3. HR should be the agent of change in your organizational culture.

Companies across the country are applying considerable time and energy in process re-engineering. Change is difficult to implement because it inevitably elicits human resistance. This is HR territory. HR can be a valuable agent of change; engaging employees is critical to successfully manage change. Several years ago, a 15 year HR veteran from 3M, Peter Bentley, joined Parker Pen USA as President of their North American operations. Bentley was charged with turning around lagging marketplace performance, changing the strategic direction of the company and improving employee morale. A long time believer in workforce wisdom, Bentley looked to company employees, "My philosophy has always been that it's the employees who basically make or break the success of the company. Therefore, we had to turn to them and say, 'what do we have to do to re-make this company?'" More and more companies are learning too late that re-engineering a process is one thing; making it stick is another. Don't make the mistake of under-valuing employee perspective when driving operational change through an organization.

4. Invest in available HR technology or outsource as appropriate.

The name of the game is not simply to get more done, but to create more value. Take recruitment and retention, for example. They are virtual mantras in corporate America today (in spite of recent Fortune 500 and dot-com layoffs). Tracking applicant flow and sources, calculating cost and time to fill open positions, determining average cost-to-hire, and continually monitoring employee turnover are all quantifiable. You can't afford to guess at your performance. Strategic outsourcing, when and where it makes sense, can help fill key skill set gaps or eliminate internal, non-value-added activities. HR should lead the way in their own department, as well as consult with other departments to optimize strategic organizational design and staffing.

5. Getting a people-centered strategy off the beach requires that management make the first move.

As the organizational leader, no one's going to take the "soft stuff" seriously unless you do. What you say and what you do will not go unnoticed. Clearly articulate your expectations of HR and determine measures to track progress. Expect results. How does your current HR talent line up against new performance criteria? Do they need training to fulfill your new expectations? Do your hiring practices need to be upgraded to ensure strength in the ranks? Do your HR leaders have the business savvy to be strategic partners? It's not possible without knowledge about company strategy, markets and performance. Do they have the wherewithal to contribute to intricate process and operational changes? They won't without insight and understanding of the inner workings of the company. Reconsider the career path potential of your best HR professionals. Do they have all the options your top marketing or operations people do? They should. If they don't, it's not likely that you'll successfully recruit the kind of HR talent you need.

The Bottom Line

Your HR muscle could prove to be the deciding factor in your company's competitive performance. The proliferation of technology and the dissolution of trade borders have dramatically narrowed our notions of competitive advantage. At the end of the day, success will be determined by our desire for excellence. Nothing influences that more than how we treat our people - our human assets.

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