“A seat at the table”

by Michael on August 3, 2010

 Knock Knock

Who’s there?

HR?

HR WHO?

HR “ wants a seat at the table.” 

I’m sure most of you have heard some variation of that in the recent months, that “HR wants a seat at the table of your company.” The cliched saying is all the rage in the HR world, but before you invite these folks to the table, ask yourself these questions: Is my current HR department equipped to handle what I need them to do? If not, what should our company do?

As we begin to answer those questions let’s delve a little deeper into who typically ends up in the human resource department these days:

A)     “Outgoing” personalities: While these individuals may have been hired for sales roles or account management roles within companies, they were quickly jettisoned off into corporate HR to take advantage of their “people skills.” In essence this was an easy way for a company to put a good face forward in their recruiting efforts.

B)    Corporate social workers: Individuals who say “I want to work with people” in an interview. Yes, it’s those individuals who want to make employees happy and plan the office holiday party.  

C)    Administrators:  This is especially true in companies that experienced a major downsizing during the recession. Former office managers, benefits administrators, and human resource generalist are being thrown into the new role of “talent acquisition manager” or “HR manager” even though they have no experience in these roles.

Here are some more interesting statistics as highlighted by the famous Fast Company article by Keith Hammonds “Why we hate HR” http://bit.ly/dcLHt.

  •    According to the University of Michigan Ross School of Business, just 1.2% of 2004 grads majored in HR. It is fair to theorize that number is reflected at other top business school throughout the country whose curriculum had been geared towards preparing top students for the lucrative fields of finance and consulting.
  •      SHRM data suggests that when HR professionals were asked about the worth of specific academic courses toward a successful career in HR only 32% indicated strategic management and finance was ONLY 2%. That bears repeating, of those in HR only 2% believed it was important to understand finance!!! You’ll be happy to know that 83% believed it was important to have course work teaching them good interpersonal skills.

Based on the aforementioned statistics it’s easy to see why so many companies are hesitant to “give up a seat at their table.” As Jim Collins famously noted in Good to Great, the best companies focus first on the “who” then on “what.”  In fact the “who” is so important to organizations and their ability to adapt that Professor Edward Lawler has noted, “business strategy should be determined by talent considerations and it in turn should drive human capital management practices.” Most executives recognize now more than ever, having someone who can strategically acquire, engage, and retain the top talent is a must for their organization to grow.  However, they are left to ask themselves but whom can I trust to be the guardian of all of our talent?

The fact is that the great majority of HR professionals are ill-equipped to handle the responsibilities of what the role of HR has really become. Here’s an example of a job description that sums up perfectly the evolution of what is expected of an HR leader moving forward: http://budurl.com/agvphr. It’s pretty easy to see that a solid understanding of finance and strategic management are essential. Unfortunately, for the vast majority of companies today HR has become akin to a pizza delivery driver who just drops off the pizza but doesn’t stand behind the product he’s delivering.

The way I see it this leaves companies with two options to solving this HR problem

1)      Partner with consultants

AND/OR

2)      Hire an all-star who can deliver what you need. 

The recent trend of the most talented workers becoming Free Agents (http://bit.ly/9tcfBP) is here to stay. This gives companies a wonderful opportunity to leverage the exact skills necessary at inflexion points for their company without making them commit to the individual or organization for the long term. The recent acquisition of Hewitt by AON for $4.9 billion is evidence that the HR consulting/outsourcing industry is growing at a rapid pace. Many of the Fortune 500 already have leveraged this trend and outsource a portion of their HR, as well as work with consultants on strategic HR matters. Among the many benefits of working with a consultant or outsourcing your HR are as follows: 

A.    Specialist: You are getting an expert with a wealth of experience, who can provide you with unique, innovative, and timely solutions. Often times these consultants can be hired for one-off services within a particular field of expertise wherein they can share best practices.

B.    Pricing: As opposed to having the sunk cost of HR on your books you can make it a variable expense for your business. Additionally, you don’t have to offer benefits to consultants, which is another area of tremendous cost savings to your business.

C.    Focus on Core Deliverable:  Whereas HR is most likely not a core deliverable for your business, it is for those consultants whom you elect to work with. By partnering with consultants or outsourcing your HR function entirely, your time is freed up to focus on the big picture items and strategy that drives your business growth.  

In addition to the opportunity to partner with consultants or outsource your HR, many companies have gone the route of hiring the true all-stars in the HR field. While I earlier highlighted several of the issues with the generic/traditional HR individual, the fact remains there are some amazingly talented people in this field. The companies whom can identify and attract these people to their organization need to hire them as soon as possible (*Here’s a hint for how to identify them, search the blogosphere!). These select individuals are highly coveted and deserve compensation and responsibilities commensurate with what they can bring to your organization. 

So does HR belong at the table? Yes. It’s up to you and your organization to make sure that your “guest” deserves to be there. Otherwise, it could be

“Knock Knock”

“Who’s there”

“Your competition”

“Your competition who?”

“Your competition just passed you bye”

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