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HR professionals must understand their businesses—that's an accepted fact. But the best way to gain business acumen remains debatable. Taking financial courses and earning an MBA is one way. Shadowing a leader in operations or a function outside HR is another. Leaving HR temporarily or coming to HR from another function are others. With all these options, an HR practitioner with eyes on a vice president's office may be confused about the path or paths to take.
Based on public documents and interviews, University of Pennsylvania management professor Peter Cappelli and postdoctoral fellow Yang Yang discovered that almost one-third of HR leaders in the Fortune 100 came to top HR jobs from a different functional area, most often within the same company, while one-third were hired into top jobs from other companies. The 2010 report compared the backgrounds of people holding top HR jobs in leading U.S. companies from 1999 and 2009.
Edward E. Lawler III, director of the Center for Effective Organizations at the University of Southern California in Los Angeles, got similar results in a 2007 study. Looking at 106 large and medium-sized companies, he found that 25 percent of senior HR executives had no previous HR experience. The rest came through the ranks of HR. "I would argue that neither of these types of people is the best fit for the vice president of HR," Lawler says. "The best person for the job is an HR person who has had non-HR roles."
Mirian M. Graddick-Weir, executive vice president of human resources at pharmaceutical company Merck & Co. in Whitehouse Station, N.J., represents an example of Lawler's ideal HR executive.
"When I see CEOs tapping non-HR people to become CHROs, it scares me," says Graddick-Weir, who has both HR and operations experience. "HR is a profession, and the leader needs a lot of technical and legal knowledge. You wouldn't make someone a chief financial officer without any finance experience—and you shouldn't do the same in HR."
However, she adds, "You have to ask why CEOs are doing that. It's because they need someone in the chief HR position to have business experience, and there's no one in their HR departments with that hands-on operations background."
As a partner in an HR executive search firm, Fran Luisi often gets asked about the importance of hands-on business experience—and how to get it. "I am a big proponent of HR getting line or operational experience," says Luisi, principal at Charleston Partners in Charleston, S.C. HR professionals are accused of being "too ivory tower" in their thinking, he notes. "Having line experience counteracts that stereotype. There's a downside, though: If you stay in a particular industry to get that experience, you may only be marketable to HR positions in that industry when you want to return" to human resources.
Luisi says his candidate pool of people with HR and operations experience within certain industries is wider than the pool of people with experience in multiple functions and multiple industries. But, he adds, more Fortune 1,000 clients are asking to see the resumes of candidates with cross-functional experiences only.
Staying in HR
Michael Brady, SPHR, regional HR manager at Brand Energy Solutions in LaPlace, La., started on the operations side working for a pipe organ company selling instruments and running a repair business. He had to maintain inventory, make sales and ensure cash flow.
Brady moved into HR later—first at a national cafeteria group, then at Wal-Mart as a district HR manager overseeing 11 stores, 4,000 people and $800 million in sales. At Wal-Mart, Brady spent the first couple of years traveling with the regional operations manager so that he could learn the business side while the operations manager learned HR.
"We got to know each other's business needs so well and could speak each other's language that we could split our travel time," Brady recalls. Brady reported operations issues he uncovered at the stores he visited, and the operations manager did the same with HR issues.
More Fortune 1,000 clients are asking to see the resumes of candidates with cross-functional experiences only.
— Fran Luisi, Charleston Partners
Brady says HR professionals need to understand "how operations is in a pressure cooker under time, safety and profit margin constraints. If you see HR from an operational set of eyes, then your job is easy because you can see the problem and you know the HR solution; you just have to connect them."
Renay Winston cut his business teeth at Penske Automotive Group after becoming regional HR director in 2000, at a time when corporate leaders wanted to integrate a disparate group of car dealers. For the next decade, Winston worked closely with his regional president, traveling to all the stores and learning the operations side to align the HR policies.
Winston had direct oversight of HR at Penske's 28 dealers with 3,000 employees. Operations managers will "tell you what they need," he says. "You can't learn how to tie HR to the business if you are operating in a vacuum in a corporate office behind the HR desk."
Winston admits that when his regional president at Penske initially shared numbers with him, he struggled to understand them. He wrote down questions to later ask a trusted colleague and took financial courses.
Eventually, Winston got his business knowledge on par with his HR knowledge at Penske. When he began looking for other opportunities, he was struck during interviews by how quickly chief executive officers challenged his business acumen. "You have to speak the CEO's language," Winston says. "Using HR-speak, you will not get very far. And, CEOs will challenge how deep your understanding is."
After being grilled by Cheryl Bachelder, CEO of Popeye's Louisiana Kitchen in Atlanta, he earned the position of vice president of people services. Within the first 30 days, he gave a presentation to senior leaders. One asked rapid-fire questions, "trying to see if he could find weaknesses in my knowledge," says Winston, whose answers won that leader's respect.
Mirian M. Graddick-Weir, executive vice president of human resources at Merck & Co., spent most of her career at AT&T going in and out of HR. In 1988, when Graddick-Weir was working as a generalist, then-head of HR Hal Burlingame tapped her to become chief of staff to the vice chairman of the board of directors. She accepted the role, wary of what she could bring to it as well as what she would take from a position with duties that ranged from making copies to putting together presentations.
As it turned out, she gained valuable experience and offered value. There are few positions "that allow you to have that bird's eye view," says Graddick-Weir. "I saw the goals and priorities across all the divisions but also the interdependence."
Graddick-Weir learned how the C-suite operates, how senior executives interface with each other and how to manage the politics. "The vice chairman was open about the sensitive decisions he had to make," she says. "Because of my HR background, I could coach him."
She learned skills that aren't taught directly to new executives or in classrooms, such as watching "executives pitch their proposals," Graddick-Weir recalls.
After two years as chief of staff, she went back into HR as a director for a couple of years. In that position, she worked with a colleague who had rotated into HR as part of a program for high-potential employees. When that colleague rotated out of HR and later became AT&T's vice president of sales, she called Graddick-Weir and asked her to run two customer sales and service centers.
"I was shocked," Graddick-Weir recalls. "I was one layer above middle management. In general, when you're at that level, it's difficult to go into a line position without any previous experience. But the vice president of sales knew me, had worked with me, and she thought I could add a lot of value."
Graddick-Weir says those two years strengthened her business and financial acumen. "In HR, we develop policies, practices and programs and implement them," she notes. "But we don't understand the direct linkage of those policies, practices and programs and whether or not they are really creating value and whether they are linked to driving business performance. In the customer sales and service centers, we had customer metrics we had to track and I really learned the bottom-line impact."
For instance, Graddick-Weir could see firsthand the kinds of training that had the most impact on productivity of customer service representatives. She saw the connection between highly engaged employees and better customer service metrics. "I was able to return to HR, argue the importance of finding out what truly engages our employees and meet those needs as a way to drive business performance," she says.
At the sales and customer service centers, Graddick-Weir says, "I became less involved in HR-speak and could effectively articulate in business leaders' language what I wanted to accomplish through HR."
Graddick-Weir returned to HR and held various roles within the function before becoming the head of HR in 1999—a position she held until 2006 when she left AT&T to join Merck.
She says the two roles she had outside HR give her "instant credibility with line managers because I can say that I have been where they are and I have seen the other side of living with these HR policies, practices and programs."
The credibility Winston gained became invaluable. "My colleagues were comfortable that I was going to apply a business filter to all my decisions," he says. "There's a genuine fear among non-HR executives that they are going to be handcuffed with policies and programs that don't tie into the organization's strategy. If you can assuage that fear with communication, things will operate more smoothly. Then, you have to follow up your talk with action."
Brady and Winston gained business acumen and respect while moving up within HR. Both advocate staying in HR to learn the business.
Make quick observations and parlay short-term business experiences into long-term influence, Winston suggests. "Just because I'm not in sales doesn't mean I don't understand pressure."
‘You may gain more credibility in the eyes of other people if you leave HR,’ at least temporarily.'
— Liz Gottung, Kimberly-Clark Corp.
Adds Brady: "Walk over to your operations chief and work alongside that person. … I can't build scaffolding, but I know the process.
"Showing up and showing your face will go a long way toward building credibility, not just with the C-suite and the management team but with the staff in the trenches," he says. "And that adds another layer of credibility for your programs because if the other executives see you doing that, they will know that you've heard from the people and seen what needs to be done to make your organization more effective and more profitable."
Leaving HR Temporarily
At the same time, Brady admits, perception and stereotypes are hard for HR professionals to overcome. "You can rise up to the most senior levels of HR within the traditional HR career path," he says. However, "If you do, there will always be a question mark over your head about whether you truly understand the business."
According to Luisi, "You can get business knowledge either way. But you may gain more credibility in the eyes of other people if you leave HR." Whether leaving HR actually results in more business knowledge or not, he adds, "perception is powerful."
At least two top HR professionals—Liz Gottung, chief HR officer at Kimberly-Clark Corp. and Merck's Graddick-Weir—agree, as does Julie Baskin Brooks.
After years in HR at large corporations such as Champion International, Phillip Morris, Kraft and Xerox, Brooks started her own HR consulting firm and ran it for seven years.
She left Xerox to take on the one role she hadn't conquered—entrepreneurship. She returned to corporate HR in 2005 at IBM Consulting and is now IBM's leader of diversity, inclusion and talent in Southbury, Conn.
When you have run a business, "You don't have to mention it or prove it, you just have it," Brooks says. "It's obvious when I open my mouth and start speaking to people … that I've been where they are. Until you've been in their shoes, you can't understand what the problem is exactly and how to solve it in the most efficient, effective way."
Brooks can tick off myriad skills she honed as a business owner that translate into her HR work. Hustling for business and meeting clients' needs are skills Brooks uses every day at IBM. "I had to be able to read clients' signs and adjust," she explains. "You have to look for hidden agendas, so I'm constantly doing that in my meetings now."
As an entrepreneur, keeping clients happy is essential to getting paid and earning repeat business. "You answer to many different types of people," Brooks notes. "I had to remember who was signing my check and what the ultimate goal was," she says. "This skill helps me navigate the extremely matrixed organization that is IBM."
Having run her own business brings credibility to her current role, Brooks says, because executives know "I've closed deals, felt the pressure and the urgency—and I've delivered."
Getting in the Door
Many HR executives don't have experience running a business, serving as counsel to the board of directors or leading another function. In the Center for Effective Organizations' 2007 study, "Achieving Excellence in Human Resource Management," researchers asked HR leaders whether employees were rotated within or outside of HR. About 26 percent of HR leaders said they rotate employees within HR to a "great" or "very great" extent, while only about 5 percent put as much focus on rotating employees into and out of HR.
"While HR professionals talk about becoming business partners and 'speaking the business,' they aren't doing anything to develop themselves or others," Lawler notes.
The researchers found that HR leaders who rotated employees cross-functionally positively impacted the organizations, Lawler says.
"You don't belong here."
That was the first reaction Liz Gottung, now chief HR officer at Kimberly-Clark Corp., heard when she took on the role of operations manager at a tissue manufacturing plant in Neena, Wis., in 1991. She was the company's first-ever female and nonengineer in that position.
She eventually won over her union workforce of nearly 200 employees, mostly men, by asking questions and listening. Gottung began her HR career in labor relations and in other HR roles at Kimberly-Clark before running that facility.
"I have to credit my boss for taking a big risk on me because I had no technical experience running a manufacturing plant," she says. "It was an untested concept to put someone like me in that role." Yet Gottung had worked at the plant in HR for two years prior and knew the people and the processes.
Her HR background helped. "I knew people. I knew team building. I knew facilitation. And I knew organization psychology," she recalls. "Getting mechanics, engineers, hourly workers, union leaders and electricians to work together—I already knew how to do that. I also knew how to implement HR policy directives from corporate more quickly and effectively."
Gottung moved to other plants and, in 2001, was manager of a mill in Corinth, Miss., when she got a call from her chief operating officer asking her to head the corporate HR function. "I did not truly have an interest in returning to HR," she admits, preferring to stay on the fast track in operations. "I really enjoyed managing a large budget, being a significant member of the community and seeing the decisions I made in the morning have an impact by the afternoon."
She agreed to take the role because the chief operating officer had a different vision for HR: "He wanted a businessperson, and I had both line and HR experience," she says.
As head of HR, Gottung approaches the function the same way she did as a plant manager. That means HR initiatives, such as the new performance management system, are developed by a team of representatives from all functions, including HR. She says the perspective of implementing HR initiatives at the plants helps her prioritize and develop policies.
Today, Gottung doesn't miss the instant gratification that came with running a plant and is more fulfilled by the work she is doing to transform the company and culture. Now based in Roswell, Ga., she says, "I now find it more gratifying to watch the seeds we planted five years ago bloom, and I have a longer-term thought process that is necessary for a senior-level executive."
Operations is the best place to gain experience outside HR because "you get to see how all the functions interact," he adds.
Luisi maintains that where an HR professional decides to gain hands-on experience should depend on the person's long-term goals and industry experience. "Just tacking on any kind of operations experience isn't going to get you noticed over an experienced HR person who has never left the profession but has worked in the industry for which he is applying."
For Brooks, it's a matter of committing to the business rather than what kind of business it is. "If I read someone's resume that showed they left HR for a period of time to get hands-on experience and were looking to return to HR, I would say, 'Wow, they get it!' and would call them for an interview," she says.
Gottung says a combination of HR and line experience will be required for top HR positions in the future. "If I'm expected to lead a function whose sole purpose is to attract, develop and motivate great people to deliver business results, how can I do that effectively if I don't know what business results they need to deliver?" she asks.
Gottung suggests that HR professionals who are on the way up work on projects that allow immersion in other functions. Once a project is completed, become a team leader for implementation. Tell the team "you know the people and how they work together, you know the project inside and out, and you are the best person to see it all the way through," she advises.
Sometimes, though, managers may resist. It's "less risky to the organization to get that experience earlier in your career than when I did," Graddick-Weir says. "I was lucky to have people who saw in me the value I could bring. I was an anomaly, and most line executives won't take risks like that."
Graddick-Weir suggests proposing a rotation program for high-potential leaders with one assignment in HR. "If you impress the person and show an interest in getting operations experience, that person may get promoted and call you one day out of the blue and ask you to run a division," she says. "Doing a great job, raising your hand and networking will eventually pay off."
If you can't get support within your organization, you may have to look elsewhere for experience outside HR. "I would hope that my senior HR colleagues out there would allow their up-and-coming HR employees to get operational experience," Brooks says. "But sometimes it's not feasible based on the size of the company or the size of the HR department. So, if they have to leave to get that experience, I hope the HR executive would understand and support that decision. We are in the business of people, right?"
The author, a contributing editor and former managing editor of HR Magazine, is based in Alexandria, VA.
Have you had a developmental assignment outside of an HR department?
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If you have not had such an assignment, do you want one? Is it worth the risk?
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