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HR Fiddles While Organizations Burn

HR leaders who strategically contribute to their organizations are making huge differences -- but they are few and far between. Too many HR professionals focus on compliance and HR metrics, when they should be focusing on crafting programs that can make a strategic difference to their organization. And they must lose their fear of taking risks.

Monday, July 11, 2011
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I am a management consultant who got my start in human resources, so I am firmly convinced that HR has the potential to push organizations forward light years -- if done correctly. However, it needs to change now and dramatically shift its focus to contribute in ways that genuinely enhance its value within organizations.

Consider this alarming trend: In 2009, approximately 25 percent of the top HR jobs in the United States were filled with individuals who have a non-HR background. In 2005, that number was 21 percent.

When I ask HR audiences what those statistics tell us as a profession, the overwhelming answer is, "They don't like us!" What kind of business answer is that? The painful truth is that organizations believe it is easier to invest in teaching someone technical HR knowledge than to undo the standard HR mind-set.

CEOs talk to me about their heads of HR, asking what they can do to help them become strategic contributors rather than compliance officers and administrators. They tell me, "I gave them a place at the table. But they don't do anything meaningful with it. I am embarrassed about what the other senior level executives say about them because of their tactical focus on details and execution instead of seeing the big picture."

Don't get me wrong, I love the HR profession!

Those individuals who are strategic contributors today are making huge differences in organizations. This is the best time to be in HR because many of the most crucial problems organizations will face in the future are those that HR can help solve.

When CEOs are surveyed about the top challenges they face in the years to come, talent management and succession planning are always at the top. Clearly, creating this competitive edge must be led by HR.

However, a survey by the Sloan Center on Aging and Work at Boston College found that more than three-quarters (77 percent) of employers have not analyzed projected employee retirement rates or assessed employee-career plans.

And more than half (56 percent) have not assessed the skill sets their organizations need today or in the future. Where are the HR people in these organizations and how can they not be all over this?

We can turn this situation around -- but only by focusing on the right things. Many of the things I am about to suggest are completely contrary to the current literature and focus in HR ... and that has been a huge part of the problem.

HR needs to concentrate on talent management and succession planning, rather than compliance, compensation and benefits.

Turnover is one of the most costly hidden drains on the bottom line. A survey by The Saratoga Institute reported that 72 percent of employees leave their organizations because they feel they are not recognized for their contributions or are not sufficiently respected and coached by their managers.

When HR began to talk about retention -- about plugging the talent drain -- the discussion migrated to questions such as, "Do we have the right compensation plans?" and "What else can we offer as benefits to attract and retain people?"

But notice the disconnect: Almost three-quarters of the turnover in organizations can be attributed to the employee/manager relationship! Compensation and benefits are certainly important, but they are a small part of what keeps people invested in an organization.

Current research reveals that 60 percent of employees intend to leave their organizations when the economy improves. The Conference Board reports that job satisfaction has fallen to a record low of 45 percent.

HR professionals should put these surveys in front of managers and challenge every one of them to identify employees they are in danger of losing, what the impact of that would be on the bottom line and how the organization can avoid major talent drains.

At the same time, HR should identify and build the business case for which managers need more training and which need to be let go because they are causing turnover.

Human resources should be deeply immersed in talent management and development, which means there should be hard discussions with executives and managers. HR needs to get out of the business of believing everybody deserves the same treatment and should spend their organization's precious resources on those who are the best raw talent within their organization.

This is not about playing favorites or discrimination. It is about skill sets, contribution and the future success of the organization!

HR needs to quit looking for the Holy Grail that earns them respect.

Human resource professionals need to adapt all they do to making their organizations viable for the next few decades -- and quit following the latest advice about how to earn respect for HR. The function has been through several iterations of this from diversity initiatives, to metrics, to branding, etc.

There was, and is, merit in all these programs. Unfortunately, we focused on implementing the program to prove our worth rather than on what pieces, if any, might be of strategic value to our particular organization.

Metrics and measuring make good sense. It is the only way to tell if you are moving your organization forward and creating sustainability. However, HR became metrics crazy and we buried our organizations in our metrics, the ones important to our HR agenda rather than metrics that focus on how HR contributes to the growth of our organization.

Your organizational needs -- not the HR profession -- should set the agenda for what HR pursues.

HR needs to stop benchmarking.

Today, virtually all HR literature talks about benchmarking your organization against other organizations.

This means HR professionals are implementing programs or strategies that are being touted as the latest and greatest HR programs simply because these things worked in some other organization -- but may not work well within the cultures of their organizations.

Rather than benchmarking, HR needs to spend time envisioning what their organization will look like 10 years in the future, and create novel, innovative solutions that will speed up their organization's transformation.

Talent development and management is a multi-year process with one year building upon the next. You should look at what others are doing in order to stimulate original thinking, but with a goal of creating something new for your organization.

Benchmarking is a beginning, not the end product. Stop asking, "Who else is doing this" and blaze the trail!

HR needs to be a risk-taker, rather than a compliance officer.

Stop saying, "We can't. We'll get sued." What are the chances an employer will get sued today? Close to 100 percent. So, if it is inevitable, isn't it better to ask these questions:

* Is there anything morally or ethically wrong with what we wish to do?

* What are the odds (as a percentage) we will get sued if we do this?

* What will it cost us if we get sued and lose (average jury verdict in the jurisdiction)?

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* How much flexibility will our organization gain from doing this?

* Does the flexibility outweigh the risk of being sued?

Determine what the risk/reward is and make the call. I once expressed this thought in an interview and the interviewer asked, "But isn't that the kind of thing you can get fired for if you assess the risk incorrectly?" Of course it is!

CEOs and all other senior executives constantly make decisions that may put their jobs at risk if they are wrong. You cannot have it both ways. You cannot be a strategic player with a seat at the table and play it safe at the same time.

None of the other executives can do that, so why should HR be any different? It is always risky at the top!

HR needs to stop fooling themselves that they "know their business."

I often ask in HR groups, "How many of you really know your business?" Three quarter of the hands in the room usually go up.

Then I ask, "How many of you understand the financials well enough to know when a number indicates a positive or negative trend?"

Then I ask, "How many of you know your products or services so well you could make a sales call by yourself and get an order? How many of you have ever delivered a piece of revenue to your organization?"

Usually at this stage there are almost no hands in the air.

All HR issues need to be framed in business terms -- preferably numbers -- because they are the life blood of any organization. We cannot merely say things such as, "Morale is down." That generally results in five minutes of discussion in the senior-management meeting, after which the meeting moves on to "more important issues," leaving the morale problem to HR to resolve.

However, if HR says, "We lost three employees last month and it will cost $213,000 to replace those employees," the discussion becomes much lengthier and more valuable, as everyone gets focused and takes responsibility for reducing the turnover draining the bottom line.

HR professionals need to get themselves out of HR -- either on a project basis or as an assignment -- and learn their business. This means working in an entirely different area or areas of the organization, and not simply handling HR for another internal business unit.

We need HR professionals to move out of HR and get real experience in other areas of their organizations -- not just an MBA or SPHR designation.

We need to quit taking seminars taught by academics and researchers, and apprentice ourselves to executives in other disciplines who are successfully running organizations -- people who are doing it, not simply talking about it.

We need to quit looking at HR surveys such as "The Top 10 Problems HR Will Face in the Future" or "The Top 10 HR Trends for the Next Decade." Instead, we need to focus on the top 10 issues and/or trends organizations will face in the future and do something about them.

HR needs to be the answer, not the administration. As a means of doing this, HR professionals should recruit mentors who do not come out of HR, individuals who can broaden their practical business knowledge.

Nothing can replace the boots-on-the-ground experience of helping run an organization. It brings about the focus HR needs not only to have a seat at the table, but to be heard and respected -- and to help set the agenda for the organization's long-term future. 

Margaret Morford is president of The HR Edge, a Brentwood, Tenn.-based management training and consulting firm serving clients across the United States and Canada. She is the author of Management Courage -- Having the Heart of a Lion and The Hidden Language of Business -- Workplace Politics, Power & Influence.

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