Does HR need professional standards?
Katie Jacobs, November 12, 2013
At the British Standards Institution (BSI), you can find a standard for almost anything. From customer satisfaction and textile colour fastness to the governance of organisations to responsible fishing – a group of experts has created a definitive guide to doing it the right way. There’s even a standard for writing a standard (BS 0 if you’re interested).
Business functions such as accounting, risk management and IT all adhere to professional standards. Until now, however, HR has been exempt, free to practise pretty much however it wants. But could that be about to change? A global movement to establish professional HR standards is gathering pace. Not aware of it? In a few years, you might have no choice.
Like many new business ideas, it originated in the US. And like many new business ideas, it involved a lot of acronyms. In 2009, ANSI (American National Standards Institute) designated SHRM (the Society of Human Resource Management) the exclusive developer of HR standards in the US. In 2011, the ISO (International Organization for Standardization) ratified a proposal for SHRM to lead a group charged with creating global HR standards.
Since then, SHRM has published three HR standards: cost-per-hire, workplace violence prevention and intervention, and performance management. However, it hasn't been easy and things have gotten a bit nasty. The US's HR Policy Association, a lobbying group whose members include HR directors at more than 300 large companies, has publicly asked SHRM to withdraw its proposal on investor metrics, which would ask companies to disclose how much they invested in their people. It claims the standards would place a huge, unnecessary bureaucratic burden on companies.
Setting the standard
Deb Cohen, SHRM's senior vice-president of knowledge development, tactfully agrees it's "taking longer" than originally expected and that feedback has been "mixed", but says the organisation will push ahead.
"It's a long process, but creating standards for the profession is part of the bylaws for SHRM," she says. "What you're looking for is to have an agreed way of doing something, agreed by people who know the industry and the needs of the organisations they work for. Even though there are different laws and cultures in different countries, I'd say about 80% of HR is HR, whether you're in the US, India or the UK."
It might sound obvious, but it's worth covering what a standard is. The word is often loosely defined, pertaining to either the individual or the function. SHRM is focused on the function, as is the ISO technical committee.
Anne Hayes, head of market development for governance and risk at BSI, explains further: "A standard is an agreed way of doing something or an agreed process. BSI standards are developed by experts in their field who develop a code of practice on how to go about something."
Research finds standards are good for business. According to a 2005 report by the now-defunct Department of Trade and Industry, standards contribute £2.5 billion a year to the UK economy.
Any agreed ISO standards for HR would have a big impact on UK organisations. Most countries are members of the ISO and, with the spread of multinationals, the standards movement could cause widespread change for HR and business in general, says Wilson Wong, head of insight and futures at the CIPD, who is representing the UK on the ISO technical committee.
"A lot of companies aren't conscious this is going on," he says. "Or they see it as regulation or cost. But if multinationals adopt these standards and require suppliers to do the same, there will be a seismic shift in the profession, and we don't know if it will be for the better."
Each country involved in the ISO technical group seems to have its own, distinct idea of what good HR looks like. When I meet Wong, who recently attended a meeting of the ISO technical committee in Frankfurt, he paints a vivid picture of how concerns vary internationally. Emerging economies, he says, are concerned that ISO HR standards will be overly bureaucratic and affect their competitiveness. The Scandinavian countries are concerned about the employee voice, the French want to talk about human governance and the Netherlands is keen on the nebulous notion of "sustainable employability".
The Americans, Wong says, are more concerned with metrics and cost-focused HR processes. He is dismissive of such an approach. "US standards are transactional," he says. "If that vision for HR is true, we're all doomed to be technicians. Everything will be done by algorithms and HR becomes a machine in the basement."
Wong does laud SHRM for being the first body to put the concept of HR standards on the table. "SHRM has woken everyone else up to raising their game," he says.
CIPD CEO Peter Cheese adds HR is more mature and better respected in the UK. "We've got to get our voice heard on the global stage," he says. "What's coming from the US is not what we believe is going to add value."
However, Cohen points out, there can be merit in differences between national and international standards. "If an ISO standard comes out before a national one - or vice versa - a nation can take a look to see if they want to adopt it or tweak it," she says. "The differences can reflect the culture of the country."
Wong claims the UK and European view of what HR standards could look like is more values-driven and principles-based than the US's commercial and cost-centric view. Not to suggest this is an arms race, but the Brits have begun blazing their own trail, with a BSI committee now discussing what a British HR standard could consist of. Committee members are a mix of practitioners, academics and representatives from bodies including trade unions and the CIPD.
Paul Kearns, chair of the committee and co-founder of the Institute for HR Maturity (IHRM), says: "We're working from a blank piece of paper. Our purpose is not to sell standards or tick boxes - we're starting from a values proposition."
The road to standardisation is long and, as evidenced by SHRM's headaches, tortuous. For the HR profession, is it worth it? Or would it lead to yet another mountain of paperwork and unnecessary bureaucracy, to be avoided at all costs? Nick Holley, co-director of the Centre for HR Excellence at Henley Business School, thinks "there's something to be learned from the fact it's running out of steam in the US", and insists HR standards-setting may be more trouble than it's worth.
"In theory, it's a good idea, but good HR isn't just defined by knowledge, but by the application of that knowledge," he says. "And how would you even accredit it? That's what worries me." Moreover, he has little truck with the idea of 'badging' organisations with a quasi AAA rating for best-practice HR. "Just because you have it doesn't mean you're a quality organisation," he says. "I can't believe any organisation would only work with another organisation because it had an HR standard."
However, according to Hayes, businesses adhering to standards should see the benefits on their bottom line and reputation. "Standards can give credibility to industries and sectors," she says. "Equally, industries and sectors can choose to turn their back on them, but why would you do that? Why would an industry say an internationally recognised standard isn't relevant?" Standards aren't just for big businesses, she adds. "It's an opportunity for SMEs to use the knowledge of larger organisations. Not every small business can have an HR director, but they can use standards built by those people."
She also reiterates it's critical the UK plays an active role in international standards-setting: "We have so many global businesses based here or UK companies doing business across the world that it's important we put our views across. The UK should take a lead on prioritising where the ISO focuses."
Most of the HR directors giving their views on HR standards for this feature were in favour, agreeing that standards could raise the profession's credibility internally and externally, even if they didn't agree on what they might look like. "Standards help the HR profession as a whole," says SHRM's Cohen. "Whether you're talking about the US, the UK or globally, it helps bring credibility to the profession."
Rob Scott, who co-founded the IHRM with Kearns, uses the analogy of the medical profession. "In medicine, standards are created and accepted. It's a culture of compliance," he says. "HR is missing that. We're the quacks." Kearns agrees: "Can you imagine a surgeon saying, 'I'm not interested in making this theatre sterile'?"
Then there's the fact that, as business becomes increasingly global, international standards could ensure good practice is consistent. "Global companies that can implement a standard recognised around the world gain real strength," says Hayes. Cohen uses the example of executives from a multinational discussing workforce planning. "Wouldn't it be great if leaders from 20 countries were talking about, in concept, the same thing?" she says. Wong agrees: "There are lots of reasons to suggest HR has to be bespoke but, with more companies working transnationally, they want to be able to compare like with like."
And there's no forgetting data analytics. Could standards help HR get it right? Scott believes so. "Underneath any predictive analytics assumptions you need clear standards and research," he says.
"Proper standards will be important for any organisation trying to create real business measures out of HR activity, such as measuring the effect of training," he adds. "Some say people measurements aren't the same as accountancy ones - but the next time you go through a downturn and the CEO wants to cut training, what will you say? That's why you need standards." As previously reported in HR, any move towards more integrated reporting will pile pressure on HR departments to deliver metrics investors value.
A values-based approach
The issue with the British approach to standards is that the ideas are so complex, rooted in theories of evidence-managed management and whole-systems thinking, it's hard to imagine how the finished standards would look. But the British HR directors who gave their views all cited the importance of values, ethics and employee voice. The problem with SHRM's cost-per-hire metric, says Kearns, is that, on its own, it tells you nothing beyond initial recruitment costs - nothing about subsequent performance or quality of the hire.
"A standard for performance management shouldn't be around how many appraisals you do a year, but the quality of those appraisals," says Stuart Woollard, director of King's College London's HRM Learning Board and third founder of IHRM. "There's a long way to go before any common standards will be developed that will provide information to the outside world about what's going on in an organisation in terms of people. Accept the complexity. There isn't an easy answer."
Kearns would like organisations to be able to measure culture. "If you're saying the culture is wrong, what are the numbers that prove that?" he says. "And how will you know if gets better? That's the bit that has always been missing." (The IHRM is currently developing a scale of organisational maturity to allow organisations to measure this kind of concept.)
For Wong, one of the main purposes of the UK standards committee is to develop overarching principles to humanise the standards so they become about values, not just cost. "We've got to find a way of making this work in a progressive way," he says. Wong also believes HR standards are inevitable, if a long time coming (he gives 15 years as his estimate for ISO standards, although outcomes from the BSI committee are expected in three).
"We live in a world of standards," he says. "There's nothing we do that isn't held to standards, and it's only a matter of time until HR management is within that reach. In most cases, standards have been helpful, helping businesses to reduce costs and work across borders. In time, standards for HR will happen. Wouldn't you rather be part of the team that shapes them for everyone? There's a competitive advantage to getting involved early."
Hayes emphasises that, although some think BSI discussions are going on "behind closed doors", this is far from the truth. "Once the standards are published, they are quite hard to change," she warns. "The next three years are key. We want people in the industry to get involved."
Wong and Kearns also encourage industry involvement and feedback. "People are developing their own careers, but they are not developing the HR profession," says Kearns. "We urge companies to maintain an open mind," adds Wong. "It's about steering the organisation into a space where it can hold its head high and deliver new value. It's a hard journey but this could shape the profession in a way that will give it value for decades to come and will put us at the forefront of people management."
Have your say
HR magazine want to know what our readers think about HR standards. Are they a good thing for the profession, or will they create unnecessary bureaucracy? And if they are inevitable, what should HR professional standards look like?
To take part in our qualitative research project and have your say, visit http://bit.ly/1dmhtv9
Tomorrow: six HR directors share their views on whether the profession needs standards