There is a lot of talk about the Human Resource ‘seat at the executive table’. I’ve even been to SHRM meetings that have presentations on the topic. The problem seems to be one of cost, innovation, perception, and alignment.
How does HR show that they are so much more than the ‘utility’ that many CEO’s perceive them to be?
I had a fascinating conversation with an owner of an industrial contracting business at the recent HR Southwest conference. This person regularly bids on large industrial projects requiring staff, materials & machinery for lengthy periods. Before submitting proposals, he asks every member of his team to review the bid and optimize it for competitiveness and profit. Everyone redlines and changes but he says HR typically either passes or has no idea how to add value. Do they see this as a marketing or sales activity? Have they focused so much on people that they can’t grapple with the financials?
Here lies part of the problem. There are certainly ways that HR can add value (how about safety and insurance premiums for an industrial project?) but more importantly where is it written that HR has to stay ‘inside the box’ of their domain. My own personal belief is that every employee in a company should have a fundamental understanding of how the organization makes money, where its costs are, what customers think, etc. It’s the only way that you can connect what you do (even if you’re a riveter or underwriter) to the big company goals. In other words, I think the seat at the table becomes more deserved as HR becomes part of the whole, rather than settling for being the ‘necessary evil’ cost center that many CEO’s think it to be.
It’s all a bit self-fulfilling: the more CEO’s pigeonhole HR, the more internalized and risk averse they become. The more internalized they become, the more CEO’s pigeonhole. It’s a great shame because HR has the ability to bring massive amounts of innovation to the table. There are so many great tools and solutions out there, but the truth is that they all cost money and CEO’s would more readily invest in marketing and sales than the utility of HR.
What do we say? Continue to push and bring new ideas to the table and do NOT accept the utility role that some perceived you to have. When championing new ideas, look at the business case and make sure that projects align with current company goals and initiatives (think ‘revenue’ not ‘cost’ – if it drives business then cost is justified). Go back and review everything in your domain to see how it impacts the bottom line. Prove to the exec team that HR has had a direct impact on company growth and push for the dialog of how HR can continue to add value.
Our own experience has shown that innovation can transform the perception of HR. Since behavioral benchmarking is one of these new breed of solutions that focus on rapid value we have been pleased to see HR starting to be seen in a new light. Nothing catches the attention more than revenue declining, or customer satisfaction slipping due to employee turnover. Effective solutions like Shadowmatch help HR directly make a difference to the company growth by enhancing the best teams, developing the right employees, and predictably hiring the best fit employees.