Defending HR

Time sure flies when you’re busy getting dissed. At least, that’s how a lot of HR professionals must feel when they see articles like “Why We Hate HR,” which appears in the August 2005 issue of Fast Company magazine.
Gosh, wasn’t it just yesterday that writer Thomas Stewart compared the HR department to the asp in Cleopatra’s bosom and then advised companies to “blow the sucker up” in Fortune magazine? Actually, that was way back in January 1996.

Yet, despite being a favorite target of business writers, not to mention many business executives, HR survives. In fact, the ratio of HR staffers to employees has barely moved over the last quarter-century. It continues to hover right around 1:100 even amid all the outsourcing that has occurred (“HR,” 2004).

So, what’s really happening? Why hasn’t HR already been crushed out of existence if it’s really so despised and expendable? The truth is, there is no slam-dunk case against HR, as the following debate shows:

THE PROSECUTION: As Keith Hammonds writes in Fast Company, HR is often seen as a “henchman for the chief financial officer” and as a “dark bureaucratic force that blindly enforces nonsensical rules, resists creativity, and impedes constructive change.” HR is also known for underdelivering on a lot of its basic assignments. Most workers, for instance, don’t think their performance evaluations are fair, and half don’t think companies are really looking out for their well-being.

THE DEFENSE: Look, nobody’s going to argue that HR is perfect, least of all HR pros themselves. There’s a reason that it’s become a cliché for HR folks to say they need to become better strategic thinkers and business partners. A lot of them actually listen to gurus like Dave Ulrich and know their weaknesses. But HR has several defenses.

First, rather than underdelivering, they’re doing better than you think. Look at employee productivity numbers in the U.S., which are arguably the single best overall measure of worker performance. Those numbers are the highest in the world. Sure, managers, technologists and especially employees should get a lot of credit for this. And culture plays a role. But shouldn’t some credit go to the folks responsible for hiring, training and allocating human resources?

Second, the state of HR isn’t all HR’s fault. It does not commonly report to the CFO, as Hammonds suggests. In fact, CFO Research Services (2003) found that HR reports to the CFO in only about 13% of companies. In most cases, it reports to the CEO (52% of companies) or the COO (17%).

So HR typically serves at the pleasure of the top boss, and those bosses are ultimately responsible for it. If they don’t like what they’re getting, they should make changes. Yet, too often these top bosses don’t expect enough from HR. In a recent BusinessWeek article, Liz Ryan noted that when companies advertise for open HR vice president positions, they tend to emphasize functional and technical skills rather than characteristics such as vision or leadership. “That would be like advertising for a chief financial officer who was an expert in general ledger accounting and accounts receivable,” she writes.

Third, HR is damned if it does and damned if it doesn’t. It has to make sure businesses stay out of legal trouble but then gets hammered for being too legalistic. It has to sometimes serve the business by reducing or controlling labor costs, but then it’s accused of being a soulless flunky. On the other hand, when it champions workers, it’s seen as not understanding the business and as being infiltrated by a bunch of “social workers.”

THE PROSECUTION: Stop making excuses! HR has got to quit worrying about how many programs it runs and how efficiently it runs them. It should start worrying about the ability of those programs to actually contribute to the bottom-line value of organizations.

THE DEFENSE: A lot of HR folks do worry about it, but it’s easier said than done because the metrics are tough. That’s partly because spending money on employees represents both a cost and an investment. It’s also because organizations are complex systems. It’s hard to know whether the money spent on that childcare program, for example, is really helping the company to retain top talent or not.

That said, today a lot of energy and effort is being spent on trying to measure the bottom-line impact of workforce management programs. A number of measurement models are out there today, and eventually the best ones will win out. That’s when HR will really start to get the respect it deserves.

THE PROSECUTION: Yeah, right. When pigs fly. By that time, HR won’t be a corporate function but only an outsourced business service.

THE DEFENSE: Nah, what they’re now calling human capital is the resource of the future. You’re going to need someone who is an expert in making decisions about it for decades to come, and it makes sense that this will be HR. If it’s not HR, it’s something else. But whatever you call it, it’s not something you’re ever going to be able to outsource without putting your organization at an extreme competitive disadvantage.



To read “Why We Hate HR,” click here.

To read “Why HR Gets No Respect,” click here.

To read “Taking on the Last Bureaucracy,” subscribers to Fortune magazine can click here.

Documents used in the preparation of this TrendWatcher include:

CFO Research Services and Mercer Human Resource Consulting. Human Capital Management: The CFO’s Perspective. February 2003.

Hammonds, Keith H. “Why We Hate HR.” Fast Company, August 2005, pp. 40-47.

“HR Overhead.” The Controller's Report, April 2004.

Ryan, Liz. “Why HR Gets No Respect.” BusinessWeek Online, June 1, 2005.

Stewart, Thomas. “Taking on the Last Bureaucracy.” Fortune, January 15, 1996.