A seat on the board - Is HR truly worthy?
Consensus in the profession is that HR is worthy of having a seat on the board, but many other functional heads don't agree, argues Denis Barnard, director of consultancy HR Means Business. He asks, are we merely trying to create a bigger reward package and fancy title for ourselves, or does HR have a permanent and strategic place in the organisation?
Who is coming into the profession?
People seem to enter the profession expressing a desire to "work with people". The reality is that the only people we are most likely to deal with will be managerial levels; the "welfare officer" role facing the entire workforce seems to have become extinct in modern thinking.
To talented people, unfortunately there are superficially more interesting components than HR in an organisation to provide a stronger draw: Marketing appealing to creatives, Sales to the dealmakers, Finance to the logical and orderly types.
"Other parts of the business criticise HR for being unable to sufficiently understand budgets, value, ROI, they cannot always provide justification for some of the "initiatives" that they seek to introduce, and do not think carefully enough about the impact of those actions on an organisation."
In today's big corporates, Finance and Legal hold much of the decision making power, mainly due to environments in which these organisations operate. Historically, those disciplines have considered HR's mission to be too ill-defined to be of much consequence.
Does our training equip us?
Does the CIPD examination and qualification system prepare HR professionals adequately for the realities of organisational life?
Empirical evidence may suggest otherwise; one criticism of the HR profession I have repeatedly heard from other parts of business is that HR seem unable to sufficiently understand budgets, value, ROI, cannot always provide justification for some of the "initiatives" that they seek to introduce, and do not think carefully enough about the impact of those actions on an organisation.
If the CIPD qualification is so rigorous, why is it that senior HR people rush for their employment lawyers every time an IT1 lands on their desk?
What skills does HR bring?
Over the last two decades, we have seen the rapid rise of the career HR professional with no other functional experience. Having a Masters in Human Resources before ever having worked in a responsible HR role seems a strange way to progress. This form of specialisation may narrow the range of expertise and lead to marginalisation of the function as a whole.
" Of course, some Boards don’t really know why they have an HR Director - apart from a vague feeling that with a certain number of employees they ought to have one, and a less vague intention that HR can act as a backstop for poor managers that the Board have failed to keep in check."
Why do Boards have an HR director?
Put yourself, if you will, in the shoes of an entrepreneur forming a company from scratch; would you really see an HR board appointment as vital? And on what basis could you guarantee that it would generate value for your organisation?
Of course, some Boards don't really know why they have an HR Director - apart from a vague feeling that with a certain number of employees they ought to have one, and a less vague intention that HR can act as a backstop for poor managers that the Board have failed to keep in check.
I remember some years ago, a business figure who held several non-executive Directorships wrote an article in a journal to the effect that HR should justify itself and its existence. My response was: if you don't know what they do or how they are justified, why do you appoint them? Could you imagine an organisation spending money on anything similar in such a haphazard fashion?
What does HR do that justifies a Boardroom seat?
Much of HR is about skills transfer and I have seen many practitioners fail to implement continual improvement, largely in the interests of retaining a permanent well-paid job. At that point and beyond, they become expensive gatekeepers, and, paradoxically, the greatest opponents of change.
I am sure we have all seen scenarios where HR Directors become simply the hatchet people for Board policy, or perhaps the administrative arm of the organisation.
Let me give you an example, from a chance encounter on one of the annual floating events for HR "Leaders":
"Much of HR is about skills transfer and I have seen many practitioners fail to implement continual improvement, largely in the interests of retaining a permanent well-paid job. At that point and beyond, they become expensive gatekeepers, and, paradoxically, the greatest opponents of change."
Speaking to an HR Director in the bar at the end of the day, I found that to service the 750 staff in her company, she had a department of 19, although, she assured me, that included three for Payroll. When I opined that probably her department was extremely well resourced (!) she told me that her department did many other things, including arranging the staff party and wrapping the Christmas presents.
The sting in the tail about this story is that she told me that this was the third job into which she had been headhunted! So clearly some people thought she was doing the right thing.
...And finally - the part to really make us think...
Is HR truly a function? Is the nature of the job five days per week, 52 weeks per year? Once the skills have been transferred and the correct foundations put in place, what is the justification for hanging on? After all, once a car has been purchased, do you hire a mechanic permanently on the off-chance you might need them? So, if one defines HR as, say, a service rather than a function, then the case for a seat on the Board pretty much disappears.
Important Note:The views expressed in this article are the writer's own opinions and are not to be automatically attributed to any of the business interests in which the writer is involved.
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Interesting article and a good thought piece that should challenge us all. I read an article not so long ago that suggested that very “talented people” rarely went into HR at all but choose finance or operational type roles with creative people going broadly down the sales/marketing type routes leaving HR and some other areas with pretty much what was left. This was based on the career destination from top business schools both here and in the USA.
Another way of looking at it is how many HRDs go on to hold the top jobs in their organizations….wouldn’t you expect more if “people are our most valuable assets”? There are a few but not many examples of people making this step up.
Why is this? Possible as outlined above because we aren’t good enough to begin with and possibly because we don’t have a clear vision for what excellent people management can do for a business and then the drive and determination to make it happen. Too often we are sidetracked into the latest fad or consultant driven idea that has little or no relevance to our businesses or our people.
We have jumped from one fad to another and one job title to another over the years without a clear overwhelming business driven objective in sight. No wonder the business now wonders what value we add.
The question for me is not so much should HR have a seat on the board but does the board put people decisions at the centre of its decision making. If it does then it is likely to be a successful and profitable business. No business will survive in the long term without taking people issues seriously, particularly in the knowledge driven economy of the future.
Therefore there is a real opportunity for great people who can articulate the people vision for their business and turn this into real practical and business focused actions to lead their organisations and to create hugely challenging but rewarding places for people to work. Not all, many not many, people currently in HR roles will be able to take this leading role but for those who can the future is very exciting indeed
I think this is a good conversation to have and by and large I agree with a lot of the sweeping generalisations of this piece.
However, there is no mention of the fact that a good HR director can bring real value to a business. An HR director with a real interest in strategic value and a true understanding of other operational areas can be worth their weight in gold.
Unfortunately - there are too many "HR only" people out there. People who have never sold - and thus want to eliminate "unfair" comission schemes that others don't have access too.
People who have never marketed and don't understand why the advertising is so aggressive. People who have never managed an operational area and don't understand the need for training to minimise the impact on the day to day business in it's delivery.
And so on... most HR people I know announce that they are hopeless with maths and Excel, as though being unable to interpret business figures was something to be viewed with pride. And most wouldn't know an acid test from an acid trip when it came to judging balance sheets.
But... there are some amazing exceptions, the truly strategic, high value HR team can drive a business forward by enabling people to match the plan. Challenging the ludicrous and developing more resilient democratic corporate cultures.
But my experience of HR at board level in the UK - is of soft fluffy, as opposed to hard business.
Should there be a seat on the board for HR? Yes, but only if it begins to adapt to being a business partner rather than a "status quo" risk free maintainer.