Role of HR Professionals

I was talking to a journalist yesterday and she popped me a question, ‘Does HR function and HR team get credibility within an organization, if not why’.

 

Interesting question to start with. Think about it guys, likelihood of a People Challenge being top priority of a CEO is almost 90%. 9 out of every 10 CEO today have people challenge as their top 2 challenges. However interesting dichotomy is that probability of HR being a key function for a CEO is not more than 10%. Now that says something about positioning of HR fraternity in today’s environment inspite of the fact people issues have taken the center stage today.

 

In my view this data represents the reality of the delivered value by HR as a function today. Let’s look at some of the reasons why:

 

Business Planning Processes: Historically HR has played only a facilitation role in business planning, review, closure etc. Due to this fact they are so far from how the numbers are arrived at and what goes behind delivering them, the role remains what it starts with only, facilitation.

 

Academic Upbringing: As I had mentioned in my blog last month almost any HR professional has limited or no business financials understanding. The courses in business schools need serious relook for bridging this huge gap.

 

Late entry of HR Function: HR as a function and fraternity has ‘arrived’ only 5-6 years back in this market. Most of the other functions like finance and sales have been considered to be backbone of any business since times immemorial.

 

Zero Business Accountability: If you look at scorecards of most of the HR heads, items would read like establishing performance management system, creating incentive schemes, benchmarking compensation etc. How does it matter? What will all of this deliver?

 

 

In my view for HR to change all of this as a first step they need to change their view on accountabilities. While sales are accountable for top line, finance is accountable for funds flow and capital management, they need to take charge of a P&L or Balance Sheet linked item. The item that they could logically look at picking in my view is ‘Employee Productivity’: Revenue Per Employee and Cost Per Employee. If they could go to boards with performance plans having target numbers on the above 2 items, whatever they would do in order to achieve that will start having completely different dimensions, both for them and for the CEO.

 

You would then start looking at Performance Management Systems from the point of increasing productivity and not just ‘high performance environment’, you start looking at compensation decisions in light of controlling cost per employee and not just ‘benchmarking at certain percentile’, you start looking at hiring from efficiency of manpower numbers and talent model at various levels and not just ‘meeting business requirements. So on and so forth we could see the beginning of a change….beginning of HR creating some value for the business and for itself.

 

~~Rohit~~