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Why HR is failing and what Business needs from HR in the 21st Century

Another thought provoking piece from Pete Smith, Founder, Cloudpartners US – it would be interesting to see if you share his views and how applicable you feel this is to Professional Services firms? He argues that HR has not evolved to support the needs of the modern business. Here is the full article from Pete below:


HR has not evolved to support the needs of the modern business. It’s considered an unfortunate but necessary cost by senior management, HR is not trusted by the employees – it’s there to protect management, and HR staff are themselves overburdened in dealing with admin, the legal aspects of employment such as benefits and health care, and have no time to focus on being part of the business leadership and development.

To be effective and worthy of a seat at the management table we need to radically re-think what HR should be doing, how it becomes relevant as an added value to the business, and the skills and tools that HR needs to work in the 21st Century.

HR – the CEO’s view

“We don’t think about our HR department until we need them. This is usually when we want to hire or fire, or when a change is imposed that we need to understand and respond to. The current issue in the US of course is health care, with many companies reluctant to hire, not just for cost reasons, but because of the unknown financial exposure surrounding impending health care legislation.

Sure, HR wants to do succession planning, performance reviews, 360 appraisals and training, but in reality my team does that daily as part of their role as managers. We don’t really need help with recruitment except for placing an ad, and we’re not hiring right now. As far as succession planning and talent management is concerned, we rely on our line managers to keep an eye on talent and those high performers we need to develop and keep.”

What’s wrong with this quote? Let’s be honest here – you will have heard some or all of these comments voiced at some point in the past and I’d bet that any organization will have some of these very comments made daily.

How do we change this and what do we want HR to do?

Here is a recent ad for a SVP of HR. What’s wrong with this ad?

The SVP of HR will be a key player on the Americas senior management team in developing and executing regional and global strategies. This role will oversee the HR function for the Americas; define HR policy and develop and deliver HR programs that support the organization’s regional and global initiatives. Provide overall strategic HR leadership for the Americas and all divisions within. In this challenging role you are responsible for all aspects of human resources including employment, education/training, development, compensation, benefits, labor relations, and employee relations. Remain current on laws, regulations, and benefit plan design trends, ensuring that the organization’s policies and programs conform to laws and are competitive.

Source : LinkedIn advert Feb 2011

What’s wrong with this ad? It describes an administration role! Sure it’s important but I want and need more:

I want my SVP of HR to be part of the planning and execution of our business. I need a team of professionals engaged in hiring, inspiring, and supporting my management team in hitting stretched goals. I want talent to be able to work together across multi disciplinary teams to find, win and deliver global business. I want to identify who our top performers are, understand why they are who they are, and how to find more. I want to be able to make sure we keep and develop those team players and understand the DNA of the best teams we have. I want collaboration across my entire organization, and to be able to replicate smokers corner and the water cooler 24/7 on the web.

In short I want my best HR people infused into the business and I want them freed up from admin so they can develop HR skills into my line managers. I need to be able to compete globally with a team that comes together to solve problems and learns from those to the benefit of my clients and the rest of the team. I want HR to become part of how we think and act and not a department to call on when we have a problem.

How do we get there?

Step 1. Get rid of the admin. I don’t want to see paperwork. I don’t want to hear the words “process” or “approval”. I want those words to disappear except in the context of “we have a flexible and sound process that we continually fine tune, and that has inbuilt workflow and approval steps”.

Step 2. I want that same process and workflow to lead my employees and managers to continually progress by setting goals and measuring performance, and I want to see performance appraisals and 360’s used to help identify our strengths and weaknesses and have that fed back to our hiring plans.

Step 3. I want communication of our goals, aims, successes and failures to be as interactive and cross discipline as joining the smokers at the back of the building and I need support for communication that is relevant and timely.

Step 4. I want the word HR to disappear from the lexicon to be replaced by Talent Development and Retention and for my SVP Talent Acquisition and Development to be a key player on my team. The back office admin will, like all other back office functions that are common to every company, be outsourced.

I expect all this to be done at no incremental cost to the business. In fact if they can help streamline people management processes and free up my managers to be able to spend time on our the core business and help reduce attrition they should be able to reduce costs. I don’t want to buy more hardware or software and I don’t want to see any consultants doing this except to get us through steps 1 to 4.

And I want it all tomorrow!”