Jack Welch: ‘Elevate HR to a Position of Power’
Why is it that HR rarely gets the respect it deserves? Is it because HR is perceived merely as messengers delivering other people’s decisions? Or is there a perception that the HR function is irrelevant to revenue generation, cost control, or risk mitigation, as if HR is simply a department of filing clerks?
So what gives?
Granted, no one in their right mind wants a surprise visit from the HR manager on a Friday afternoon. Indeed, the late-day visit may be perfectly benign, like sharing news of a dozen fresh honey-glazed in the lunchroom, yet the reflexive terror still manages to take years off one’s life. But setting aside the jest, HR departments are notoriously underappreciated despite their critical importance to corporate success.
So now it’s time to set the record straight.
The unseen complexity of Human Resources
More than half of HR leaders responding to a semi-recent survey strongly agreed that their role has required them to manage increasing levels of complexity in recent years, and that they feel ill-equipped to cope, according to results released July 18, 2013, by global talent management firm Lumesse.
In another worldwide survey of some 1,300 HR leaders, 52 percent strongly agreed that the complexity of their jobs has grown significantly. The survey also found that 61 percent reported feeling overwhelmed by the complexity and that 52 percent said they lacked the ability to fully cope with it. Respondents represented employers from 11 different countries with workforces ranging from less than 1,000 employees to more than 50,000.
These statistics correlate strongly with my own observations. Relentless changes to the way businesses work coupled with convoluted compliance standards keep HR leaders chronically off balance. Regulations regarding equality and diversity, discrimination, and data protection only complicate matters. From the steep fines levied by public agencies to exceedingly expensive civil suits launched by employees, employers must pay far more attention to standards of conduct than was required in the past.
HR professionals have a lot on their plates. Wearing multiple hats and dealing with tight deadlines is causing substantial stress and negative energy, leaving many HR professionals susceptible to burnout.
To top it off, tack on the burden of staying current with legislative entitlements and other areas of labour law, benchmarking compensation rates, and creating training and development programs. And last but not least, HR bears the cross of delivering terrible news in a climate of near constant downsizing.
Welch on Human Resources
According to the late GE CEO Jack Welch, HR must be as important as any other function in the company:
‘Elevate HR to a position of power and primacy in the organization, and make sure HR people have the special qualities to help managers build leaders and careers. In fact, the best HR types are pastors and parents in the same package.’
If I may, allow me to add a modifier to Mr.Welch’s comment: elevate HR to a position of REAL power. This means something more than bestowing a pretense of influence, but actually integrate the HR function into strategic decision-making by giving it a true voice.
When Mr.Welch was asked during a convention about the role of HR in a company, he answered immediately:
‘Without doubt, the head of HR should be the second most important person in any organization. From the point of view of the CEO, the director of HR should be at least equal to the CFO. And why wouldn’t HR be as important as finance? After all, if you managed a baseball team, would you listen more closely to the team accountant or director of player personnel? The input of the team accountant matters—he sure knows how much they can pay a player. But his input certainly doesn’t count more than input from the director of player personnel, who knows just how good each player is. Both belong, alongside the CEO, at the table where decisions are made’.
Yeah but HR doesn’t know the business
It’s often said of HR people that they “know HR” but don’t know anything about the business they work for. That’s a fair point. But, when HR is shut out of important meetings, and generally treated like an outsider, how could they be expected to understand their employer’s business model?
Ideally, HR staff should rise organically through the ranks. Forward-thinking companies will rotate HR juniors through various assignments, letting them shadow and cross-train in other departments as part of their professional development. Time spent in the field, on job sites, and customer interaction should each be regarded as rites of passage. This wide-angle exposure will serve the employer well, endowing HR staff with the context necessary to meaningfully participate in higher level strategic conversation. Conversely, HR types who wish to become integral must demonstrate initiative—i.e; volunteer for assignments, engage in self-directed learning, ask questions—to show their employers they’re worthy of the investment.
The WCB trap
Through no fault of their own, HR and HSE often become victims of scope creep—i.e; volun-told to coordinate the company BBQ, plan the Xmas party, count widgets at year end, etc. Jack Welch on scope creep:
‘HR too often gets relegated or pushed into a benefits trap, administering insurance plans and overseeing scheduling issues like vacation and flextime. It also gets saddled with health and happiness activities like organizing the summer picnic. Someone has to take care of these tasks, but if HR gets stuck doing them all the time, its stature will never be what it should’.
I hear from many frazzled HR and Safety people who’ve lost their way in the WCB labyrinth. The Board’s policy manual is some 1,500 pages in length, and recent changes (i.e. Bill 30) impose new and onerous obligations on employers. Compounding the misery is presumptive coverage for psychological injuries, meaning that employers are on the hook for worker anxiety, depression, and burnout. As time passes, WCB and other disability-related matters will continue consuming ever-greater amounts of time from HR and Safety, distracting them from attracting top talent and preventing injuries.
Summing it up
The true value added by HR has little to do with what is classically considered core HR work such as payroll, benefits administration, salary benchmarking, so forth. Instead, HR’s core function should be strategic in nature, as in supporting and enabling the execution of strategy through building organizational capability.
The great advantage that HR has in this area is that, ultimately, all strategy is executed by people – people who need to be supported, trained and equipped to fulfill the strategic vision. This is the real role of HR, and even though some people remain skeptical of its bottom-line importance, in fact its relevance cannot be underestimated.