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Is It Time to Shake Up or Break Up HR?
 

By Mary Kaylor  8/13/2014

Thought leaders are battling over the future of the HR profession, but they agree the global changes that are affecting organizations have major talent implications for strategy and operations. Today’s unstable economic environment requires HR professionals who understand business issues and who have the ability to create high-impact solutions.

CEOs want leaders who can anticipate fires before they start. To do that, HR thought leaders, CEOs and other human capital professionals argue that the HR profession must transition from the position of reactive protector to proactive problem-solver. 

As Sue Meisinger, former Society for Human Resource Management (SHRM) CEO, tweeted in a recent Twitter discussion on this topic, HR professionals shouldn’t “go to [a meeting] with HR problems for someone else to solve. Have a point of view and recommendations that serve the business.”

Push Paperwork Aside

But how will HR ever be strategic when it’s mired in the day-to-day minutia of administration? 

Writing recently for Harvard Business Review, business advisor and best-selling author Ram Charan wrote that while HR performs useful tasks, “the department per se must go.”

Why?

He argues that while human resource professionals are great at handling engagement, empowerment and cultural issues, they don’t know how to relate HR to real-world business needs. He proposes splitting HR into two separate functions: administration (HR-A), which would manage compensation and benefits and report to the chief financial officer (CFO), and leadership/organization (HR-LO), which would focus on talent development and performance and report to the CEO.

Executive coach and talent development strategist Trellis Usher agrees—with caveats.

In an interview with SHRM Online, Usher said splitting the HR function according to Charan’s model makes sense from a practical standpoint; however, she has other considerations for what that would mean regarding the CFO’s additional responsibilities.

“If we move in this direction, we have to look closely at the CFO role to ensure that leader understands the nuances of people-related transactions and how they might differ from other elements under his/her purview. The answer isn’t to simply redraw the lines on the org[anizational] chart and pray for some magic. A thoughtful transition plan needs to be developed and implemented to support the change.”

In response to Charan’s comments, Meisinger wrote for Human Resource Executive Online that it’s impractical to take compensation and benefits out of HR and transfer it to the CFO. “It’s the equivalent of removing responsibility for financial forecasting from the CFO. Just as you can’t project financial results without solid forecasting capabilities, you can’t improve on the people capabilities without being able to manage compensation and benefits strategy.”

Others feel that HR should transition into the role of strategic business partner. In the OD Center report Strategic Business Partner Role: Definition, Knowledge, Skills & Operating Tensions, organizational development consultants David Jamieson, Sue Eklund and Bob Meekin write that because of the turbulent nature of the business world today, there is an increasing need for strategic business partners to understand workplace issues, such as the use of social media communications, technology, cultural competence and change management. With a “focus on the current and future challenges of the organization … the strategic business partner needs to be able to join with other business leaders to engage with the strategic implications of the rapid, specific changes driving their sector, industry and organization,” their report states.

Get CEOs On Board

CEO buy-in is key when it comes to HR’s ability to work with the C-suite across the organization to effect strategic change and growth. Bill Taylor, co-founder of Fast Company magazine, thinks HR at any organization has only as much strategic value as the CEO thinks it has. Also writing for Harvard Business Review, Taylor states in a blog titled Why We (Shouldn’t) Hate HR,” that “if companies and their CEOs aren’t serious about the people side of their organizations, how can we expect HR people in those organizations to play as serious a role as we (and they) want them to play?”

Usher agrees.

“The CEO has to get squarely behind the effort to quickly get the right people on the bus, transition the wrong people into new [positions]—or out of the organization—and then move forward,” she said. “The longer this decision is delayed, the company is getting further and further behind.”  A good way to get the CEO’s attention is to relate the company’s growth to that of the competition, she said.

Usher advised HR professionals to communicate the urgency with their CEOs and “show him or her all of the research that says in about three to five years the company will be behind all of its competitors in acquiring, developing, mobilizing and engaging the best talent in the world … and that the company will be outpaced and outperformed by the competitors who understand.” 

On July 16, SHRM’s Public Affairs department conducted a Twitter chat titled, “Is it Time to Split HR?” under #Nextchat. Participants shared mixed ideas about the idea—and the future of HR.

Many agreed that HR needs to be proactive, understand the value in metrics, and speak the language of business with a focus on strategy. You can read all the tweets from the discussion by clicking here.

HR professionals of the 21st century have to leave their comfort zones and expand their portfolios of skills and experience, HR thought leaders have said. They will need to be alert, proactive and capable of adapting to constantly changing business environments. They will need to be savvy in social media and have the ability to communicate on multiple social media platforms. Experts have also said that organizational growth will require HR professionals who can create magnetic employment brands and digital strategies to attract new talent. The best will instinctively understand how to develop people. They will create cultures of engagement that will support strategic initiatives and abandon working in silos to get out of their cubicles and grow, experts have said, because businesses can no longer function with HR departments that accept complacency.

Mary Kaylor is manager of public affairs for SHRM and is the host of SHRM’s “We Know Next” Twitter chat discussions #Nextchat, Wednesdays at 3 p.m. EST. You can reach her via Twitter @weknownext.

 

 

 

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