Thursday 1 November 2012

Another way to make Human Resources strategic.

In my recent blog “Easy ways to make HR strategic” I forgot about another popular route to instant strategic Nirvana.
Get rid of the low-level activity.
This one has been a best seller with HR since the 1990’s. It’s ineffective, and irritates our colleagues intensely, but it will impress other HR people.  You look at the time-consuming routine activities of the HR department, and push them onto line managers. This move is often accompanied by earnest declarations that the task is line management’s responsibility anyway, and HR should never have taken it on in the first place.
Having dumped it on the line managers, you can now declare that you have freed up your time to concentrate on the strategic issues. It’s that simple!
In practice, it is not that simple. Let’s take sickness records as an example. You transfer that over to the line, give them some training in how to do return-to-work interviews, show them the forms, and retreat to HR to be Strategic. Six months later, some managers complain to you that they have some employees with high absence levels, and ask you to help them with a review meeting. As a first step, you ask to see the sickness record and surprise, surprise, they have stopped recording sickness absence.  You can’t help them. A year after the change, the CEO asks whether sickness absence has risen or fallen since transfer of responsibility to the line. You have no evidence to base your answer on, which will make you look incompetent, rather than strategic.
The low-level routine activity is the base of a pyramid. On top of the routine transaction of recording sickness absences ( or doing first round interviews in recruitment, or advice on employment conditions, etc) is a level of reporting and professional service. That might be advising managers on trends and employment costs, or helping managers with difficult cases. Above the level of those advising and reporting services, you can look at the bigger picture, and advise on policy. Taking away the base of the pyramid does not make the apex any higher.
If this strategy was a useful way to get strategic, what have other professional disciplines in the organisation done? They might constantly find ways of doing the low level routine more efficiently, but there always seems to be a hierarchy from strategic, through tactical, down to transactional. In Finance, the strategic issues might be about securing long-term finance, and measuring return on capital. So has the Finance Director got rid of most of his department, and pushed responsibility for cash collection, audit and treasury out to the line managers? Probably not! There is still a hierarchy of activity, with the strategic thinking at the top, supported advisory levels of management accounts, Sarbanes-Oxley compliance, audit, etc in the middle, and a lot of invoice-processing and expense claim checking at the bottom.
You will find a similar hierarchy in Marketing, with the Marketing Director occasionally thinking about “what business should we be in”, but with a department doing a lot of running small promotions and drafting press releases underneath.
This is not the road to instant strategy, but could make it easy to replace in-house HR with an occasional visit from an external HR consultant. I suggest you look at “Easy ways to make HR strategic” to find an alternative.