Published by MBA Skool Team, Published on June 12, 2013
A recent article in a leading HR magazine brought about a very shocking revelation. It seems that if we type “why we hate...” in search engines, the word “HR” appears automatically as the first option that completes the sentence. This is not an isolated case alone. The famous comic strip Dilbert has a character named Catbert: the “Evil Director of Human Resources”. People all over the world do not seem to like HR. Many people believe HR adds no value to business, worse still that it is only a cost function! Over the past few years a number of articles, columns and books have debated “Should we do away with HR?” This is a silly question and a senseless debate. Of course we should do away with HR if it adds no value to business. However if HR adds value to Business, then we should keep it and nurture it. This can only be achieved by a paradigm shift from the ways in which HR currently functions. HR should stop working in silos and work in an organizational context. But before we move onto that, let us look as to how HR has grown as a function.
Quite contrary to popular belief, over time, the functions of an HR manager have only evolved.
The evolution of HR as a function over the years has been remarkable. Before the 1900s none of the organizations that existed then had a separate function called ‘HR’, the owners of the businesses owned the function that we call today as Human Resources Development as they didn’t find any merit in dedicating a separate department to handle functions relating to their employees. With industrialization gaining momentum in the early decades of the twentieth century and the outbreak of World War I, organizations started feeling the need for a function or department that would look into and address the issues pertaining to labour and industrial relations with a focus was on the welfare of the workers. All the processes pertaining to the workers were formalized. The function officially came to be known as ‘Industrial Relations’. The impact of ‘Scientific Management’ reached significant levels in the 1940s; this period also witnessed the Second World War. During this period, efficiency of the workers had become the focal point of organizations and was given high prominence. HR donned the role of a ‘Personnel Administrator’ thereby giving his or her function the name of personnel administration. As business and time evolved, the scope of the personnel administration department grew. From just labour welfare the function became responsible for processes like Compensation Planning, Training and Development, Legal Compliance, Talent Management and Performance Management to name a few. Today the role of HR is that of a strategic partner, impacting the business directly and effectively contributing to its growth.
As we can see, the contribution of HR to business has progressively increased. Seeing this trend in the functions of HR, Dave Ulrich came up with a theory. He believed HR functions in four different ways (as depicted in the figure below). He was the first person to coin the term “Business Partner”.
A business partner as evident has a high strategic and high process focus. A business partner does not sit in an ivory tower oblivious to business, but helps in aligning HR plans to business plans to deliver more value. Let us take an example to explain the same. Let us imagine that the business aims at bringing about sustained revenue growth, HR business partner can deliver value in the same objective by
Identifying talent strategies for entering new markets
Predicting requirements and source critical talent to grow
Helping in mergers and acquisitions.
As an outcome of successful business partnering, the business objective can be achieved. Below is a list of a few ways in which HR business partnering can add value to business objectives
However all said and done, the question that really prevails is that if HR business partner is a reality? Or is it an oxymoron? Is it a management jargon which is far from the truth? Let us look at some statistics here:
High performance organizations predict the growth of HR Centers of Excellence. A center of excellence model is aimed to help an HR practitioner to devote maximum time to strategic roles. A COE is dedicated to take care of transactional roles, thereby giving the HR more time to deliver value in achieving the organizational objectives. It is believed that currently 34% use COE’s and in the next 5 years it is expected to jump to a handsome 59%.(Source i4cp)
Many high performance organizations predict that the growth in the business partner role is going to increase from 43% (in 2012) to 53%( in 2017) (Source i4cp)
There are other statistics which reveal that time spent by an HR in business partnering has increased from 9.6% to 23.5% and the time spent in maintaining records has gone down from 25.9% to 13.2%. However certain skeptics believe that HR as a business partner is far from reality. Roffey Park research reveals that as many as 47% of managers said that business partnering was not successful. One in four suggests that the model itself was ineffective. Mc Kinsey on the other hand reported “Companies appear to be struggling to find human resources professionals with the right mix of skills to support business unit manager”. So how does one deal with it? How does one turn Business Partering into a reality?
A few ways to help fructifying the concept of business partnering is :
Creating a Balanced Score Card- The impact of an HR professional should not just be measured in terms of its value add to learning and development. HR should also stop just taking up ownership of learning and development and focus equally on value creation in terms of internal processes, financials and help improve customer focus.
Saying “NO” to quick fixes- HR should constantly remind itself of the organizational objective and say no to quick “band-aid” fixes which serve no purpose in the long run.
Avoid placing strategic plans on top shelves- Strategic plans, missions and vision statements look fancy, but they all become victims of dusty top shelves never to be used again! HR should make sure that Strategy is put into practice in every element of its function-be it learning and development, recruitment, succession planning etc. Everything that an HR does should be in line with strategy.
Focusing on core competencies-HR should know what the core competence of the organization is. Once it identifies the core competence, it should leverage on that to help bring about organizational effectiveness.
Align align align- The mantra is to align HR plans to Business Plans. HR strategies are developed as a post scriptum to business strategies and that creates a mis-match. HR plans should be made side by side along business plans, so that both complement each other and not contradict!
Use HR metrics-“You cannot manage what you cannot measure”- Peter Drucker. HR used to be considered as an intangible asset, not anymore. One can measure anything from employee turnover, to satisfaction to motivation and assign a number to it. This not only helps in decision making but also helps in bringing about clarity and direction. A business partner should use HR metrics as his mantra!
HR should be judged by its future than be bound by its past. The future of HR is here. HR Business Partner is an oxymoron no more!
The article has been authored by Pooja Mazumdar and Samuel Nirmal-LIBA, Chennai
Human Resource Champions- Dave Ulrich
The HR Business Partner: An oxymoron no more: Kevin Oakes
Evolution of the HR Function: Tushar Bhatia
The evolution of HR: Developing HR as an internal consulting organization: Richard M. Vosburgh
Business Driven HR, Unlock the value of HR Business Partners: Deloitte Consulting
Views expressed in the article are personal. The articles are for educational & academic purpose only, and have been uploaded by the MBA Skool Team.
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