Years ago, as a newly minted human resources graduate, I was taken aback by an article in a business magazine titled “Let’s blow-up the HR Department”. As I was ready to take on the world and save business through human resources management, I was concerned that perhaps I had made the wrong career decision. The premise of that article was based on viewing the HR Department as an unnecessary overhead administrative expense that offered nothing to improve the bottom line. HR was so far removed from the business heart of the organization that it seemed that blowing it up wouldn’t make one iota of difference. As an HR consultant, I’ve seen countless organizations struggle with the role of human resources in their business. The move from tactical to strategic has been downright painful for HR. The agenda to get HR at the executive table has been ongoing for the HR profession for over 20 years and still the human resources profession struggles to re-make and re-align itself from a service provider to a key strategic player supporting the business agenda.
The Deloitte Global Human Capital Trends 2015, Leading in the new world of work reports that only 30% of business leaders believe that HR has a reputation for sound business decisions, only 28% feel that HR is highly efficient, and only 20% feel that HR can adequately plan for the company’s future talent needs. This is a gloomy report card for HR to say the least particularly since CEOs and senior executives continue to be concerned about talent, culture and employee engagement, the leadership pipeline, and workforce capabilities.
What needs to change in order to re-make HR? HR professionals need to be immersed in the business of their organizations and in the language of business. Business is about profit and growth. HR needs to develop a clear line of sight to profit and growth by developing a solid understanding of the needs of the business and delivering value-added and innovative solutions. Translating business strategic goals to HR strategic goals is a big part of demonstrating an understanding of the needs of the business. Also, measuring the impact of HR programs in dollars and cents will get the CEO and CFO’s attention. I have often considered the success of my fellow business school graduates who majored in finance and accounting and sit at the executive table. Did they receive any education about business that was considerably different from HR majors? All business school graduates learn the basics of business but the finance and accounting majors learn the “language” of business and the line of sight to the bottom line is clearer. Perhaps part of the solution is to have our post-secondary institutions assess education content for students majoring in HR to ensure that business acumen is part of the curriculum.
Blowing up the HR department was a so-called ‘solution’ to the ineffectiveness of HR 20 years ago. The current solution for HR professionals is to develop credibility and respect as business leaders. HR professionals need to step up their game and develop analytical skills, understand the line of sight from HR to the bottom line, and learn how to communicate in the business language that CEO’s and CFO’s understand. HR’s future credibility and reputation will be directly tied to demonstrated business acumen combined with foundational HR.