When a General Manager told him that HR was important because it represented 70% of the company costs, Prof. François Geuze, (University of Lille, France) answered: “it’s important because it represents 100% of the output”.
Yet according to Harvard Business Review, “Most of [HRD] are process-oriented generalists who have expertise in personnel benefits, compensation, and labor relations. They are focused on internal matters such as engagement, empowerment, and managing cultural issues. What they can’t do very well is relate HR to real-world business needs.”
I believe HR has fallen in a sort of trap. The famous concept of “HR Business Partner” has been used – and overused – for ages, and it was presented in a way to promote the role of HR in the company, trying to work alongside productive departments to remove administrative burden from employees’ minds and help the organisation work better. But why is this a trap? Because calling HR a “business partner” isn’t a compliment! It simply puts HR at the same level as any supplier, nothing more.
Where is the difference? When you work with a partner, his goal is to serve your needs to the best of his abilities, but it doesn’t mean you share the same objective. A steel manufacturer will produce metal that fits a car manufacturers’ requirements, but they are not directly involved in selling more cars – even if they benefit from it.
In reality , HR should not be put at this, almost third party level , but should really be at the heart of the business. Without true people management, there can be no real development strategy in the company but only management of short term staff need for which no HR professional is needed. After all, it’s quite simple to outsource administrative burdens such as payroll as it brings no value add to the business. Many businesses will claim they run perfectly well without proper HR as, according to a CEO, that kind of “decentralised structure fosters autonomy and accountability among leaders across the company”. Even worse, many consider HR as a “necessary evil” and HR horror stories seem to be as popular in business magazines as Stephen King books!
So the question is: how can HR get to its proper role of business enabler? There seems to be a consensus that administrative work should not be at the forefront, and many suggest it would be simpler to outsource it. As analyst Bernard Marr explains, HR has 2 main functions: supporting people and analysing employee data for strategic decision-making purposes. This means that HR should not spend its energy – and budget - on process management, however complex they might be, except when it really becomes a burden for the company.
The true core business of HR is and remains talent development. This point is easily confirmed by PWC, which analysed that “93% [of CEOs] say that they recognise the need to change their strategy for attracting and retaining talent. But an enormous 61% haven’t yet taken the first step. CEOs are well aware that something needs to be done, but are less sure of exactly what that is”. Logically, this pleads for an expert role in the organisation as CEOs recognise talent development plays a key role in the company growth.
This is why HR needs to focus on developing an effective talent management strategy, targeting the following objectives:
- Develop leadership in relation to corporate strategy
- Get the right talent in the right position, via recruiting and mobility
- Develop the right skills at every level and plan for future competency needs
- Identify high potentials as part of a proactive succession management process
- Manage the performance of all employees—at all levels—to drive bottom-line performance with a mix of regular performance review and long term evolution planning
Now that talent management really is on the CEO’s agenda, HR should take this unique opportunity to impact the business with an ambitious talent development strategy – and demand the budget for it!
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