HR needs to change to survive
Recent comments on the future of HR from senior professionals in the public sector, both HR and indeed non HR, suggest that the future of HR hangs in the balance in many ways. Deep cuts have to be made in expenditure and these will be made on the basis of impact on front line services and cost benefit. Both of these present even good HR functions with a challenge, let alone those not performing well. HR itself is not a visible front line service so must prove it delivers value essential to the delivery of those services and in a way that has a positive cost benefit.
There are significant specific challenges ahead, for example in the NHS Primary Care Trusts which have to reduce management spend by 30%. Where is the "fat" likely to be perceived by the Chief Executive and Finance Director to be? Front line activity or HR? The past failure of HR to credibly present its clear organisational and bottom line value has now come back to haunt many in HR, justifiably so some might say.
How many HR functions have presented a clear case to their FD on the financial value they are likely to be adding? How many have identified specific initiatives that have delivered specific value to improve service to end users or customers?
I have delivered many presentations on the organisational and bottom line value of some of the things HR does, eg leadership, engagement and alignment of effort, to non HR audiences, mainly Finance Directors, Chief Executives and NEDs. These senior people tell me that virtually all the information I introduce on the Return on Investment from this activity is new to them. They ask why their HR functions have not given them this already. To that question I have no answer.
Those outside HR have a number of perfectly logical arguments to remove HR from the scene almost totally. Many quote the Armed Forces who are able to do such amazing tasks and succeed without almost any HR function at all save a minimal pay and record keeping function. How can this possibly work? Should there not be HR business partners running round in uniform at the front line? One reason it works is because there is total clarity of role around who does what with people and the line managers, ie officers and NCOs, take full responsibility for their people unlike some non Forces line managers.
It could be argued that the HR function should put itself out of a job if it did its job properly. With great leaders at all levels in the organisation inspiring, transforming and driving performance why do you need HR Business Partners? So if there is an initial implementation of a good quality system to develop leaders, engage and align staff to critical organisational deliverables, which is then handed over to and run by those leaders, you could argue that HR becomes a minimal transactional service team with occasional transformational input in times of specific need. This latter component could be provided just as well via high quality external as well as internal support. Using outsourced service centres transactional delivery could be provided as well. Thus do we really need internal HR functions at all? some might ask.
How have we got to this point anyway? A major problem is that the value added from HR activity in not naturally clear to those not in HR. The value delivered needs to be identified, quantified, communicated and used as a launch pad for the next step to achieve your vision. What is this Vision? Those who say it’s to create a great HR system have already missed the point. It’s to make the organisation perform at its best through its people, not just to have a great HR system.
Yes, possibly some HR functions are too big for what they have to deliver. Some are too big as they have to deliver things they shouldn’t deliver, some are the right size but delivering the wrong things, some are even too small to effectively deliver what they are asked for. HR functions come in a myriad of forms even in the same industries or sectors. So what does HR need to do so survive, in both public and private sector?
- Propose change and savings before they are thrust upon you. Assess what HR is really there for and deliver appropriate structure and strategy.
- Proactively focus on key organisational deliverables above all else.
- Forget HR best practice. First deliver what needs to be there to get the job done, then add to it step by step to become top quality.
- Communicate in a clear, concise and business focused way.
- Repeatedly demonstrate the organisational benefit of HR delivery every day.
- Make sure line managers take on their responsibilities for people.
- Keep it simple. Look for easy wins and low cost but high quality solutions.
- Increase the effort on relationship building with key organisational players. They need to be your champions not your critics in these difficult times.
The next few years is going to be a rollercoaster for HR, especially in the public sector. This time we have to get it right or in the future HR may not be there at all.
Chris Roebuck is Visiting Professor of Transformational Leadership at Cass Business School London and has held senior HR roles in London Underground, KPMG, HSBC and UBS.