Leadership: six reasons why HR should be considered in top level management
For too long HR professionals have been denied a seat the top table – but it’s time that people skills took centre stage in the boardroom again.
Let’s face it, and if we were to be strict about it, there is only one reason why HR should be considered in top level management and it’s this: no matter what a company makes, what services it provides, what innovation it employs or what structure it adopts, people are at the heart of any business.
We in HR know that, but it’s a constant surprise to me that so many companies don’t and press on building their businesses without consideration to the human side of their enterprise.
In these days of robots, automated checkouts and drones it’s tempting to think that this doesn’t matter, but history is littered with companies who have not paid heed to the human side of their operation, with the result that it has severely damaged their reputations and their all-important bottom line.
With this is mind, here are my six reasons why HR should not be ignored and why a HR professional should always be given a seat at the top table of any company.
They stop companies from making the same mistakes
While writing my book on how HR can change the world, I was amazed to discover how few former HR directors have taken the step into the CEO’s role. Not one CEO of a FTSE 100 company has a HR background, and HR is decreasingly represented in the boardroom as well.
Instead, having a financial background puts you in a better position of taking the top job than a HR background does.
This is good news for people who believe that decisions should be made on financial grounds but bad for those who realise that companies are powerless to do anything if they don’t get their employees on side or hire the right people to get them where they want to go.
Very often, these mistakes are the result of groupthink – when people with too similar a background and outlook all too quickly come to decisions without the input of others with a different take on things, who can question what is unwittingly being taken for granted.
This role, I believe, belongs to HR people, who in my experience are very different to sales or financial-focussed people and who have the skills and ability to stop their companies from making errors, if only they were given the chance – of which more later.
They can tell CEOs how their strategy will impact on their employees
This is so obvious that it seems barely worth mentioning it, until you consider the well-publicised example of the taxi app Uber, whose growth was so rapid, thanks to the technology it was able to harness, that it lacked the human resources function vital to such a large organisation.
HR Directors will be able to keep the CEO in touch with staff morale, but also because they can impress upon them what the company needs to do to be attractive to the next generation of talent.
The result? A slew of embarrassing headlines and the realisation that rapid growth, while looking good on paper, is a nightmare if you assume that your current employees are able and willing to help you achieve it, and if you do not have the recruitment processes in place ready to bring more of the right people into your company.
Like I say, it sounds fundamental, yet companies till fail to learn the lesson.
They can suggest ways to engage personnel in changes
It is one thing suggesting a change in direction or structure and another to predict how personnel will react to it, but a third consideration is how to implement it. This, I would suggest, is vital, because understanding how you roll out a new programme or strategy to your employees should be considered at the planning stage.
By calculating the method, you start to understand what is possible and there are no nasty surprises waiting down the line.
A good HR leader, with their ear to the ground, a heightened emotional intelligence and the ability to canvas opinion, will be able to advise on implementation even before the idea has moved beyond the planning stage.
Think of this as an insurance policy. The well-publicised problems of Uber show that companies can no longer keep grievances behind closed doors.
Technology means that a grievance, or an allegation of sexual misconduct, can rapidly be spread on social media, as can any failure in the company to react to it properly and appropriately.
Gone are the days when your team’s ability to speak out about their grievances was limited and, more importantly, following the rise of the #MeToo movement, the definition of what constitutes harmless behaviour and mere ‘locker room banter’ has changed.
Responsible companies need to ensure that everyone knows what is expected of them, so HR departments need to have robust definitions of acceptable behaviour and language in place.
My point goes further than this. Companies need to have transparency right through the company and if HR professionals are to be the standard bearer for ensuring everyone’s rights to do their work without experiencing harassment or offence, then businesses should make sure they are being seen to be doing that job at every level of the company – including inside the boardroom.
They help you get the best from your workforce – present and future
The website Glassdoor.co.uk is probably the best reason why it is time for companies to set aside a chair in the boardroom for an HR director that I can think of.
Nobody expects to have a job for life, so as they move from role to role, they are looking for the best opportunity that they can find, which goes beyond the mere pay packet. Glassdoor.co.uk allows them to get a feel for other potential companies, including what the people who work there think of it.
This is extremely influential stuff, yet too often board members have little or no idea what their employees really think of working for them and, more importantly, what they are saying about them to the outside world.
The next generation of CEO needs to be more people focussed to succeed, which means that directors with their eyes on the top job will need to learn some people skills.
This is where a HR director would be highly valuable, not only because they will be able to keep the CEO in touch with staff morale, but also because they can impress upon them what the company needs to do to be attractive to the next generation of talent.
The biggest battleground in industry over the next few years will be talent. CEOs who want to win it need to know what talent is out there for them, what those talented individuals are looking for and, most importantly, what the know about their company.
This cannot be underestimated, and nor can the need for members of the management to be open-minded when it comes to the unfamiliar attitudes, behaviours and dress codes of young recruits. It sounds unimportant, but it really is not.
I have experienced so many instances where HR issues have arisen because older people in companies have struggled to come to terms with the fact that young people behave differently, with the result that their talent is not fully realised or is lost to the company.
If we are to embed that understanding at the highest level, then HR professionals, who are skilled with dealing with people and know how to understand and get the best out of them, are key to the whole process.
You can learn from them
Nobody in HR expects a free lunch and, in my book, I come down very hard on the HR profession. I believe that we are the architects of our own downfall because we are not taking the steps we need to force our way back into the boardrooms and into the CEO’s seat.
We are stuck in an HR bubble, drawing up employee spreadsheets below deck rather than taking the wheel on the bridge of the ship, simply because we are not evolving as professionals and showing why our skills are relevant to the task of steering the whole business.
HR professionals need to increase their commercial awareness and learn more about the businesses that they are involved in and understand that they are not just there to help hire, fire or keep the employee handbook updated – they need to know how what they do makes money.
This can, and should, cut both ways.
Bill McDermott, CEO of SAP, believes that the next generation of CEO needs to be more people focussed to succeed, which means that directors with their eyes on the top job will need to learn some people skills.
What better way to do so then make room for a HR professional at the highest level? Follow their example, ask for their opinions, learn about communication and pick up what it means to be emotionally intelligent and people-focussed – precisely the qualities which have too often been forgotten, but which more companies will realise over time need to be restored.
Interested in this topic? Digital transformation is workforce transformation: why HR must assume a leadership role.
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Glenn is a freelance HR consultant and has worked with Bank of America, HSBC, Ecolab and Imperial Brands in multi-discipline strategic and operational roles across the world. Prior to this he was employed Eversheds LLP, Accenture, Koorb (NZ) and EON as well as numerous other companies. He is working his way to his PHD, becoming a future CEO and...