Notwithstanding the confusion around what "Human Resources" actually stands for, a recent international survey showed that while 80% of company Chief Executives want their HR function to engage fully with their business the same percentage don't believe their senior HR people actually deliver on this. So much so in fact, that there is a growing trend to appoint HR Directors from non-HR specialists.
This is a terrible indictment, brought into ever more clear focus by the recent plea by Peter Cheese, the CEO of the CIPD, for assistance in charting the future path for HR. At the risk of being dismissive of his plea, the path is clear and business has already told HR what it needs.
I feel qualified to comment. I started my career 40 years ago in industrial relations (a term frowned on these days…) in heavy engineering, and since then have worked across multiple sectors and led global HR teams from bases in the UK, Europe and the USA. I have watched HR practitioners determinedly calling themselves professionals while at the same time seen them delivering diminishing operational value.
If you consider me to be out of order, ask yourself this. How many companies do you know whose senior HR practitioner is now on the main board?
Then ask yourself what shape is the UK working environment now in?
- 4.9 million private sector companies
- 24.3 million people
- £3.3 billion turnover
- 99.2% had 0-49 employees
- 5.4 million companies are SME’s <250 employees)
There has been a steady growth of small companies. How many organisations of this size (SMEs) would even consider employing an HR "professional"?
I could offer you a well-rehearsed treatise on Dave Ullrich's latest pronouncements, or refer you to the recent research paper produced by Henley Business School on HR with Purpose, which pulls no punches and should be required reading for anyone interested in HR. Instead I want to offer a perspective and to challenge the long held principle that "people are an organisation's greatest asset".
No they are not, at least not in isolation. In the first quarter of the 21st century what makes competitive difference is how great people interact with technology.
A colleague of mine, a senior HR Director, put this well in a recent e-mail to me:
"I think that one of the immediate issues around technology is that it is generating huge amounts of data (more than we know what to do with). The vast majority of organisations are still trying to grapple with how to turn that data into meaningful information and insight."
He went on to say:
"The advance of technology will, I predict, be another force to finally render the days of functionally composed pyramid organisations extinct."
This is where HR can make a difference. I have long argued that the core purpose of HR is to be the custodian of organisation culture, thus placing it right at the heart of business purpose. HRDs need to lead their teams to focus on delivery outcomes, how they are achieved and the multidimensional benefits that arise from success and high performance.
Sadly however, this creates a new, serious challenge for HR in that it places accountability on a discipline that is far more comfortable operating in the shadows of peripheral intervention. As an example, look at the on-going debate over "Engagement". In his book, The Engagement Manifesto, Alan Crozier defines engagement succinctly as:
“Engaged employees are those who are cognitively, attitudinally and behaviourally aligned with and committed to their job role and their organisation’s objectives.”
Instead “engagement” has been hijacked by the "Happiness, wellbeing and communication" brigade, thus immediately relegating it in the eyes of the business leaders as "nice to have..."
However the future for HR can be hugely positive, if taken into the context of the environment in which organisations now operate and the expectations for and from their people. It can best be summarised by a quote from the late Sir John Harvey-Jones, who said:
“The trouble is that all-encompassing though information technology may be, it will always convey facts and numbers…what it does not convey is perception, belief and motivation.”
When HRDs and other HR practitioners grasp that they have the opportunity to lead on the delivery of perception, belief and motivation in conjunction with effective and accurate business intelligence, and deliver on a reward structure that reflects the multi-generational reality that we live in, then HR can achieve the desire of business leaders for it to engage with the business. If, however, HR continues to focus on peripherals, then it will atrophy and wither on the vine.
Bill Mitchell, Optimum Organisation Design