Does HR Really Matter?
It has often been bon ton to bash HR and criticise the lack of proof of its impact. And surely enough, it would be fair to admit that HR is partly to blame for this. But every time someone clamours that HR should be abolished they talk about a function. And very often that person has had a personal frustrating experience with an HR professional in the past. Talk about bias!
6 reasons why HR is not well seen
- HRM is not a function; it is a process that deals with human issues within any given organisation. This process is not the fiefdom of HR, who is at best the care-taker, who organises, steers, designs the best way to realise objectives.
- HR and Leadership are overlapping if HR is about making sure that people are willing and able to perform sustainably to create value for all stakeholders.
- HR – as a function – has multiple stakeholders. Many people are mistaken when they think HR should be at the service of the individual employees. HR has many customers: the organisation as a whole, the customers of the organisation, the employees and the leadership team. All of these have expectations, and HR has their work cut out for them trying to satisfy everyone at any time on all the issues.
- HR – as a function – has multiple and often conflicting targets. In a broad sense, these targets are about enabling the organisation, but they are also about compliance. HR will often have to balance opportunities with regulation and values. And this balancing act often results in an unclear position.
- HR is about people. Leaders, employees and customers behave in a human way. This means that behaviour is biased, determined by human skills, and powered by motivation. The muddy cocktail of human behaviour makes it difficult to proceed. But let’s be aware that denying this is worse than embracing it. The worst thing we could do is start treating people as robots and ignoring the human fickleness.
- And finally, it is difficult to establish best practices. There is not one way. Hr practices are both impacted by culture and shaping the culture. Copying one successful practice can lead to devastating impacts. And there have been many fads that HR has followed without any evidence or careful examination if the practice would have relevance. The stampede towards autonomous work teams is an example of that.
Show me the money
These 6 points might sound like petty excuses why the HR function or process is difficult. Yet it is not for pity that I am asking. Leaders might ask HR to show them the money. And that question is admittedly fair in a business context.
It is not easy to link HR practices to firm performance. But this is also valid for other functions such as marketing and CSR. It is so difficult to isolate variables, correct for contextual differences and prove a causal relationship between what a company does and the final performance. Moreover, most studies are not longitudinal nor predictive.
There is however increasing evidence that HR practices have a significant impact on both operational and firm performance *(Saridakis e.a. 2017).
Back to strategy
The relentless demand to prove the relevance of HR practices is puzzling. And so the proof that is presenting itself seems to be falling on deaf ears.
So let me go back to the more strategic arguments, and away from the monetary proof.
- Imagine your company is not able to attract and retain talented people. What would happen then?
- How many processes are fully digitalised and where do you still need human intervention? How long will that last?
- If you look at failure of strategies, to what extent is that related to human behaviour?
- When your organisation needs to change course, what is the impact of the people on how well your company is able to do so?
- When you have to innovate, how important is it to have people cooperate, be creative and span boundaries?
- And when customers are not satisfied, to what extent is that related to human interaction?
I could go on for a while. Strategy is about human behaviour, and if we are talking about human behaviour, then we need to make sure that people are successful in what they do. It matters little if you call that HR Management, people management or whatever name you could come up with to designate a very strategic process, which can be best described as creating value through people.
So the future is very bright for HR, now that business leaders realize that digitalisation is not about technology but about people, and moreover that talent is scarce. Those of you who are critical about the relevance of HR, I’d like to challenge you to prove that the organisation you are working for does not do anything that remotely resembles HR.
Solvay Practice for HR and People Strategy
All of the above are but a few of the reasons why Solvay Executive Education has undertaken to launch a new HR initiative, combining two pillars: the HR Circle and HR trainings. The former aims at reuniting all those who want to explore the possibilities of building (better) people practices in their organisations. That is why in its events and dedicated member workshops the HR circle deals with 3 questions:
- Why is what we do important?
- What does the science say?
- How does it work in practice?
The HR trainings are a series of one to two day-sessions focused on a very specific and salient topic of interest, debuting with "Motivation Strategy: How We Can Sustainably Motivate People" in May, followed by "Evidence-Based HR: Improving The Decisions We Make" in June.
Discover the new Solvay Practice for HR and People Strategy, and embark on a journey of discovery that is rich in content, full of learning opportunities and a hands-on approach to people management.
Because HR really matters.
David Ducheyne, HR Practice Leader, experienced CHRO and co-founder & chairman of hrpro.be, the first national Belgian Association of HR Professionals.
*George Saridakis a,⁎, Yanqing Lai b, Cary L. Cooper (2017). Exploring the relationship between HRM and firm performance: A meta-analysis of longitudinal studies. Human Resource Management Review 27 (2017) 87–96