WHY HR continues to be a COST CENTER - Mind Game

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The biggest challenge & opportunity for anyone and everyone in modern times is to ‘Stay Relevant’.

This conversation is about HR staying relevant, not so much about existential crisis.

HR (Human Resources) or HCM (Human Capital Management), HR Partner, or any other similar term represents the department that is expected to engage with people in an organisation from hire to fire or hire to retire. It is a number driven organisation as HR deals with headcount. Ever since, HR has reported to the person at the helm of the affairs in an organisation. Traditionally, till date, HR has been a cost center; fundamentally funded by the business teams.

Few observations, subject to exceptions, to build some of the conversations here:

1.??????HR teams have grown horizontally and vertically, i.e. new roles & positions and bigger teams.

2.??????Majority of companies have been expecting the HR teams to focus on and enhance efforts on newer trends and practices by sparing them from mundane activities. This is done through outsourcing of certain jobs and/or adoption of modern days tools and technologies.

3.??????HR heads have been termed with new and fancy titles to attach newer and different expectations from them and their teams.

4.??????Some of the new trends wrt. Organisation and People are Mental Health, Employee Well-being, Learning and Development, Digital organisations, LGBT team members, Work from Home (WFH during and post Covid’19), ever-evolving organisation business models & matrixes, Change Management like a continuous journey, Diversity and Inclusion, Safe and healthy workplace, be future-ready are just few to name among the key challenges and opportunities for HR teams of today’s times.

5.??????Some of the noises: new roles, new jobs, people’s redundancy, robots and other modern technologies taking away jobs, people are expected to perform multiple roles & responsibilities, use of newer technology-aids at workplace, enhanced focus on outcome, and other similar terms & concepts are happening around.

The biggest challenges among all are the continuous rapid journey of transformation and disruptive transformations; these disruptions are mostly technology-driven and many triggered by innovations by start-ups. It is no more change or incremental change. Keeping pace and alignment with the scenario is a non-negotiable big must, it is easier said than done. It is inevitable reality to stay relevant for businesses.

Irrespective of emergence and adoption of newer technologies continuously and disruptively, People will continue to be at the center of any new business models, growth strategy, transformational journey, disruptions, and all such fancy matters. If so, HR will continue to be recession-proof.

The fundamental and significant question is “What can HR do to stay Relevant?”. Is HR geared enough to face this challenge and convert into an opportunity? It is a lifetime ‘Do or Die’ dilemma.

One fact, HR is one function that has horizontal visibility of entire business and people across the organisation.

Some of the basic questions remain, i.e.

1.??????Has HR been able to leverage and gain from the enhanced role-definition and expectations raised by the companies?

2.??????Being continually a cost center, has HR been assertive or can HR be assertive?

3.??????Has HR been able to stand for their purpose and stakeholder in the business, i.e., employees?

4.??????What has been HR’s active and effective role-paly in business transformation journey from conceptualisation through execution?

5.??????Has HR been able to be in driver seat of business with risk-sharing, or continue to be a bogie?

6.??????Is HR future-ready or continues to be “#MeToo”?

7.??????Has HR ever taken target to:

a.??????Enhance employee productivity by certain %age (beyond cost reduction).

b.??????Lowered or maintained attrition @ certain level by design.

c.??????Adopt or introduced innovative means to enhance outcome of employees.

8.??????How can HR make entire employee assessment process more objective, absolute measurable thru month-on-month achievements matrix, and little of discretion beyond favouritism.

9.??????There is a focus on soft or behavioural skills and enhanced empathy beyond hard skills.

10.??If HR has been trusted confidant of CEO and Board?

It may be worth looking some of the fundamental questions in the context of prevailing practices being practiced across the board, irrespective of the geography or nature of business or size of the organisation or any other factor differentiating one business from another.

1.??????It is the line managers, who knows or expected to know all or maximum possible about an employee in terms of his/her personal-social-professional life. It can be best, if line managers are enabled as HR managers.

a.??????In real life scenario, neither majority of line managers across functions are seen as even close to be HR manager nor HR has been seen making explicit efforts enabling line managers as effective HR persons and professionals.

b.??????Most line managers act with whims and fancies, and their bias towards people. It is largely quite an undisputable truth.

2.??????There are new terms and concepts being introduced by the companies like Mental Health, Employee Well-being, Diversity, and others.

a.??????The question remains, how prepared HR is understand-comprehend-implement these new concepts?

b.??????Introduction and induction of right professionals in the system to perform these roles, and existing HR team’s ability & capability to appropriately comprehend and implement effectively.

c.??????These new concepts are quite deep, not transactional, requires hell of insights-study-analysis-implementation-monitoring. This is to deal with human being, who is among most dynamic creature on the earth, subject to change moods many times in a day.

It shall not be seen as negative view; however, it is equally critical to make realistic assessment and find answers.

3.??????There are new jobs and new roles. Most of these new jobs and roles require very different skillsets and people coming with different backgrounds & environments. Their actions and performances are outcome focused than input led.

a.??????Defining these job roles, work environment, integration in overall organisation context, measurement criteria, career roadmap, and others is a new challenge. Some of these roles are expected to be disruptive and innovation-oriented in nature.

b.??????Not too sure, how current HR teams are geared to engage and deal with this workforce; and offer optimal and desirable workplace.

4.??????Companies fire employees when multi-type of compliances related matters is brought to the table for more than one reasons.

a.??????Take the case of non-compliances practiced acquiring the business. Whenever such situations are unearthed and brought to the table for whatever the reasons, the company terminate the employees involved in or aware of such acts.

b.??????Who is HR’s existence reasons? an employee.

c.??????Company retains the acquired business and continue to benefit from the revenues and profits of said business transaction, however sacks employees.

Has HR been ever able to stand-up and ask business to also let the business transaction go? Never!

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5.??????Hire and Fire.

a.??????Companies hire left-right-center when going is good under the garb of growth and expansion strategy.

b.??????In slightest of rough weather, companies fire same way left-right-center.

c.??????This happens and has been happening over years, repeatedly.

d.??????Has HR ever been able to be critical of such hiring? esp. reference earlier times and/or similar situations within the Industry or market otherwise? Possible Never!

6.??????The annual appraisals, variable compensation distribution, and appraisal rewards.

a.??????Like it or not, HR is a silent spectator and just an executor of the annual appraisals done by business. HR fails to ask relevant and appropriate questions, though being a so-called physically present member of the process. HR even fails to ask question or object to blatant biases – positive or negative.

b.??????HR should ask self, if they have been able to implement meaningful and effective 360-degree appraisal system. The answer lies within.

c.??????In many cases, the managers are allowed to distribute annual kitty of reward money disproportionately just among some people.

7.??????Employee Exits.

a.??????Offers on EXITs. Has HR ever evaluated and done the introspection ‘how can 30-50% salary jump and promotions’ be given when an employee resigns; while same employee was given zero increment and rewards over years. Does this trigger a realistic review and policies and prevailing practices.

8.??????Employee representation.

a.??????Under the garb of new and fashionable trends, teams are introduced in the system to listen to employee’s noises & voices for their well-being, mental health, and be better productive.

b.??????How HR genuinely means all this. May be, MTTR (Mean Time To Respond) is ensured, and possibly it stays there. Mostly, no meaningful introspection and action beyond.

9.??????Exit interviews and feedback.

a.??????Exit interview are done at multiple level within the organisation. Now, even such exit interviews are performed by external agencies.

b.??????How effectively, HR is able to present to the organisation leadership with actionable intelligence.

c.??????Has HR been able to nail challenges with business leaders, internal processes & practices, and other controllable factors?

d.??????If HR can stand up for their core, i.e., employees to serve them and larger interest of the organisation?

10.??Has HR ever been able to accept and work on SLA(s) to its customers. Traditionally, HR had internal people as their customers. However, in ever-changing scenario, HR has even external customers – their ecosystem partners.

a.??????Most times, respective business owners start managing their affairs to serve their business interests.

b.??????Point remains, has HR been able to define objective and measurable SLAs for themselves and deliver in reportable manner.

It is NOT about asking a question or answering to anyone else, it is all about engaging with self to find answers to the massive challenge. It needs to be disruptive, everything needs to be seen through the glasses of ‘design thinking’. It is time to act and get out of comfort zone by trying to understand, decode, and be part of disruptive transformational change.

What %age of HR professionals has achieved the title of CEO or reached at the helm of affairs, subject to two kind of exceptions (a) rarest of the rare, where it did happen and (b) where the business model facilitated.