On 2 December 2024, The Daily Telegraph joined in with the New Statesman and the Times to claim that the growth of HR is negatively impacting UK productivity. The CIPD reported 42% growth in the HR sector between 2011 and 2021, while productivity stalled, and absence and worklessness grew significantly during the same period.
Read more: Can HR prove it needs a seat on the board?
Having accidentally landed in an HR role 35 years ago and stayed ever since, across eight companies and seven fascinating industries, my first reaction to recent press was to defend the profession.
Yet, on reflection, I think that in those 35 years, HR has both risen and fallen as a key business leadership function with a deserved place at the senior table.
How HR has fallen
HR has become the 'governance police' focusing on chasing people to complete compliance training, following Enron and the 2008 financial crisis.
Ulrich's Three Box Model (1996) separated HR into 'strategic business partners', 'centres of excellence' and 'HR admin/operations', and led to a negative power shift, increased costs, and HR sterility, with centres of excellence driving the agenda away from the business front line.
HR is distracted by wellbeing and diversity, equity, inclusion and belonging (DIEB) projects, appointing 'experts' and creating noise instead of producing steady societal shifts and true equity for all.
The Covid-19 pandemic redefined HR as an admin function, promoting admin-minded HR professionals who couldn't contribute later as an equal business leader.
HR has become a woman’s career ghetto: firms fill HR vacancies with women to improve gender numbers and counterbalance male domination elsewhere (in the FTSE 250, CEOs are 94% male, CFOs are 86% male, and CTOs are 88% male), leading to an unhealthy 80% (and growing) female HR leadership.
How a stripped HR can rise again
Before leading any action in HR, ensure you can answer positively to two key questions:
- Will this make the business more successful and productive in its chosen markets?
- Are we doing right by our people?
We should focus every day on three activities that drive productivity. Firstly, organisation designs that will support future success. Second, work that drives improvement in talent and core organisational capabilities. And finally, leadership assessment and development at every level, to ensure that we are getting the best for and out of our people.
Read more: Agile: How HR is changing shape
To address the earlier points, consider each of the following:
- Governance Challenge the need for every compliance programme and streamline. Focus on embedding deep values throughout the company.
- HR model Centre the HR team around business partners who mirror the operational core of the business, and add back a few specialists in learning and development and reward and payroll.
- DIEB and wellbeing Good business partners will weave great hiring, DIEB, and wellbeing into the day-to-day fabric of the company and avoid creating bureaucracy in so doing. Remove single-issue roles such as DIEB leads.
- HR business leaders Hire and develop HR team members on their business skills/partnering, and recognise those who execute on change.
- HR diversity and gender demographics As for all other roles, constantly review the demographics in HR to ensure that we steadily remove barriers to diversity, mirroring society.
- Performance Use AI, skills and early careers as tools to drive business performance, not to lead elements of the HR strategy.
Taking the proposed steps above will streamline HR, align more closely to business goals, repair the reputation of the function, and promote a more inclusive and productive work environment.
Matthew Collington is open to work, after vacating the HR director role at food and beverage manufacturer Pilgrim's Food Masters
