Thursday, 5 February 2009

HR's main priority?


   HR's main priority? - It's dealing with the recession, stupid!

Well actually, no, I don't think it is.  To me, HR's biggest challenge, and opportunity, is to facilitate conversations within their businesses about if and how the way these organisations run needs to look different from now on.

My last post on the global reset suggested that businesses are now going to have to change.  As Cary Cooper, writing in Human Resources magazine explains: "The last two decades have been about the acquisition of material goods, about excess, about a ‘me-oriented' as opposed to a ‘we-oriented' society."  We're now moving rapidly towards a more 'we' focused environment.

It's not going to be easy.  HR still needs to deal reactively with the negative consequences of the recession - which is already taking up a lot of extra time.  But it needs to plan for the upturn and to take account of sweeping societal changes too - or as Ulrich phrased it last night, "In the current climate, HR is faced with a series of paradoxes and may, as a result, become confused as to whether to do nothing or everything; or to take a short-term view or a long-term view".

HR teams need to do both, but in my view, it's the long-term piece which will have the biggest overall impact (longer-term).

An example of the opportunity provide by thinking longer-term is described in the Economist this week.  Explaining the need for banking bonuses to be based on average performance over several years, the magazine notes:

"Impossible, the banks might say: our star employees will never tolerate such restrictions. But if there is ever going to be a time to reorganise the incentive structure now must be it. A threat to quit will be pretty hollow, given the state of investment banking. And few traders will have the clout to set up their own hedge funds in today’s market conditions. In any case, the greediest employees may be the ones most likely to usher in the next banking crisis. Better to wave them goodbye and wish good luck to their next employer."


The general opportunity is also expressed well by Cooper:

"This recession could be the making of HR. During this period HR will be challenged like never before...  The challenge for HR is potentially more meaningful, to ensure that we create the right organisational climates where people can flourish, where we retain and truly develop our human talent, where we humanely deal with people when the times get tough, that we don't avoid confronting senior management when we need to, on the important ‘people issues ‘of the time, rather meekly accepting top management diktat that we know to be wrong. HR should be at the forefront of our recovery, not just a compliant functional support system.  It is now time to put into practice action the often-heard HR rhetoric: ‘The most valuable resource is our human resource'."


What do you think?  Are businesses going to have to fundamentally change (say, within the next fivce years)?  Should this change be HR's main priority?  Does HR have the capability to lead this change?

I'd value your comments below, and / or I've also set up a poll on my sidebar (top right corner of my blog) for the first of these questions.  It would be great to hear your views.



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  1. Are businesses going to have to fundamentally change? Of course. There are too many developments in the global external business environment (economic, technological, demographic, organisational fragmentation). The complexity of the environment demands equally complex responses. Current management practices are not fit for purpose.

    Does HR have the capability to lead this change? No, it doesn't.

  2. HR will (and should) be involved in the change, but the extent of that involvement is reliant on how HR is perceived in the organization. HR must have a respected seat at the executive table to, in your words, "have the capability to lead this change." This is certainly not the case in many organizations today.

    I just blogged on this topic this week, talking about some recent CIPD findings that mirror the results of our own survey:

    Charles Cotton, reward advisor at the CIPD, had this to say:

    “If organisations do not have a complete handle on where their staff spending goes, it makes it far more difficult to prioritise investment in the measures that will retain and motivate talented individuals. Reward, if implemented correctly, can engage staff at a time when pay freezes and redundancies are prevalent, boosting the chances of the organisations coming out of the recession in good shape to benefit from the recovery."

    A hallmark of strategic recognition is saving organizations money by carefully targeting the funds invested in recognition to boost morale and productivity. How important is this? Accountemps, a US recruiting firm, recently conducted a survey of senior executives, finding “failure to recognize employee achievements” ranked second only to communication as the thing that had the most negative impact on employee morale. Similarly, senior executives recognized recognition as a best remedy for low morale, again second only to communication.

    What this all tells me is senior executives acknowledge the importance of recognition to boost morale and performance. Yet they are also unaware of their investment in the means to recognize employees and have no measurement or proof of success of those investments against goals.

    The rest of the post is available here:

  3. Thanks Anne Marie, your point about complexity's a good one. And thanks too Derek. I don't think your comment deals quite with the point I was making, but is a good one nevertheless, and may even provoke another later post from me.

    In the meantime, keep your comments and poll responses coming. We've had 4 responses so far (this isn't You Gov!)- all supporting the view that there is going to be fundamental change.

  4. I think your questions are too general, Jon.

    The questions are (IMHO) what changes are coming, what are the first steps we have to take, and how can we assist each other to take those first tottering steps?

  5. If HR is to remain - or in many organisations become - relevant, it will have to change. It will have to prove that it genuinely adds value, rather than simply assert this to be the case - which has been the story of the last few years.

    Structures, seats at the table and the like risk being a distraction. What matters is the calibre of person/people in situ. And HR's track record in this respect, on both sides of the ocean, has been pretty dismal. One HR director I know says that she can count on two hands the number of serious, genuinely strategic and value-adding HR directors in the whole of the UK.

    There is a long, long way to go. Derek's point about perception is spot on. But the problem is that often the perception of HR is matched by reality - and that's been the rub.

    The sector has simply not had anything like the level of quality it needs in order to change this perception.

    The banking bonus scandal is a case in point - see



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