Will the HR function have a seat at the corporate table in 2008?

Mark Stelzner, author of organizational-development blog Inflexion Point (and did that gravelly voice-over for Southwest Airlines) sees 2008 as a make or break year for the role of Human Resources:

"Like Toby on NBC’s The Office, HR continues to have a bad name in the eyes of business units, managers and employees.  Often viewed as either enforcers, legal risk mitigators or transactors, the human resources department is not the first place business leaders turn to for advice and guidance in meeting strategic goals and objectives.  They are generally perceived to lack basic business acumen (root cause analysis, business case skills, comparative analytics, etc.) despite years of trying to shift internal and external perception.  I believe this is a make-or-break year for HR.  If consistent, demonstrable examples of strategic value add do not break the glass ceiling in 2008, we will see the continued absorption of HR responsibilities into legal, finance, IT and outsourced service providers, effectively resurrecting the “personnel department” of old."

The HR function has been under increasing scrutiny in recent years, typified by the now-infamous 2005 Fast Company article "Why We Hate HR", by Keith Hammonds.  Stelzner does hit upon a very important point that HR strategy is becoming a core competency that is needed by managers in all corporate departments.  Any successful business manager today should have a solid grounding in HR skills when managing talent, in addition to a degree of understanding of finance to allocate and determine budget for his/her area, and some understanding on the IT needs of his/her function.  Hence, "HR strategy" is not something that is silo-ed into a single HR department, but is pervasive across an organization's management.  The HR department should be the driver and facilitator of sound HR practice across the management team, and ensure these HR practices are aligned with their organizations' strategic goals.  By demonstrating this alignment between solid HR and business performance (i.e. linking customer metrics with employee performance), HR will regain it's "seat at the table" when corporate decisions are made.  Moreover, with many businesses undergoing complex change with outsourcing, globalization and this predicted economic downturn, the role of HR has never been so important as it is today (I outlined the role HR needs to play in a company's outsourcing environment in this article for the IAOP earlier this year).

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'    ......not yet free to have a seat at the table

   

Comments

[Rich]

The "stereotype" of HR is the problem. Like IT or Payroll, these functions have been viewed tradionally as overhead and cost centers. The questions is - how do you link HR to strategy and profits? It's about sourcing the best people no matter where they are in the world, keeping them happy, paying them a fair wage, and identifying subject matter experts with the right knowledge that fit particular projects or initiatives going on in the organization.

[A.Paulo]

I am a student of the business school in rotterdam(Holland), and I just wanted to thank so far, everyone who has commented on this subject. Because I had to hand in an assignment about this subjet and it helped me a lot. Thank you once more and,I hope I still count on this website on finding more great material like this one. Good year for all of you.

[Sunil Sharma]

Unquestionably yes because the issue is a strategic one that impacts your entire organization and its performance. Fundamentally, the most sustainable competitive advantages are those that are not transparent or easily duplicated (e.g. supply change linkages that allow you to meet demand more dynamically or the tacit knowledge developed by a highly skilled work force). Let's focus on the development of a highly skilled workforce: It does you no good to train and develop employees if they leave and apply their expertise to help some other company because you will be incurring the initial costs of a benefit that someone else reaps. And I can virtually guarantee you that you will not retain top people if your company does not continually look for ways to provide these people the opportunity to grow professionally in addition to providing the proper combination of incentives, benefits, compensation, and connectivity with the organization and its values. In order to accomplish this, workforce development and retention needs to be an ongoing strategic issue supported by the CEO as a high priority. This requires visibility (i.e. a seat at the table). In other words, the executive team, as well as the employees, need to understand that workforce development cannot be "glossed over" and will not be swept aside. Thus, HR must be given a seat at the table and given the strategic assignment of leading workforce development rather than simply acting as a tactical function. Of course, this requires that you have a qualified, executive level person in this position.

As a management consultant with experience in many industries, I would strongly encourage viewing HR through this strategic prism because doing so will ultimately impact your organization by attracting and retaining better talent. If someone tells you that workforce development and its ultimate impact on your organization and its ability to attract top talent is marginal, then my suggestion would be to stop taking advice from that person. With that said, effective workforce development is much more difficult than most companies realize. However, that is an issue for another day.

[Jay Reischl]

I think the HR function is gaining ground toward a seat at the table because of the tremendous importance of the human capital contribution toward the financial returns of organizations. I believe, “what’s missing” are the hard measurements. Heads of sales measure revenue; COO’s measure widgets, units of output and hours of productive billings; CFO’s measure everything financial. I think HR leaders need to start measuring human impact. There lots of efforts going on to measure human performance and some companies are getting it done. I think it will take time to refine and replicate. It will also take time for the cultures of companies to adopt such a shift.

[Darwin Gillett]

HR will finally have an important seat at the corporate table....

1) When Boards of Directors realize that the true source of competitive advantage comes not just from the greatest technology, the shrewdist business strategy, "best business practices", etc, - but also from Best People and Best Cultures - and when these Boards hold their CEOs accountable for the people dimension as well as the financial dimension,

2) When CEOs - especially those charged with revitalizing their companies' business performance realize that revitalizing companies means revitalizing people - and leading them - and thus create and lead a Management System that fosters collaborative decision-making and fast execution,

3) When HR Directors start taking an interest in - and taking risks in
a) proposing strategies and processes for hiring people with great character as well as great business skills,
b) championing employee morale surveys - and attention to ways their companies can raise that morale,
c) building Values into the culture - and the processes of appraisal, reward and promotion,
c) providing leadership development (and career development) opportunities for employees,
etc.

You get the gyst. I believe it all comes down to people - and thus HR directors should lead the charge - at least in companies where the CEO gets this and lives it.

Examples abound, but some companies just don't get it yet!

What's your own answer, Phil?

Dar

[Arie Versluis]

Hallo Philip,

Organisations that want to be innovative, agile, maybe even excellent can only be so because of the contribution of the employees working for that organisation. Whatever strategic choice is made it can only come true when employees contribute to the execution of that strategy.
For organisations it is therefore important that they can attract and retain the employees who are qualified for the job and willing to work for the organisation. The strategic role of Human Resources is therefore twofold:
. have a good insight in the labor market, the developments in that market and contribute to a positive and strong image of the company in that market. In importance that might be comparable to the marketing of products and services.
. have a good insight in which factors make a company attractive for potential employees. Attractiveness of an organisation is largely determined by the opportunities employees get to use and develop their knowledge and skills. Therefore Human Resources must have a strong influence on how processes, jobs and organizational structures are designed, in order to offer opportunities for employees.
So strategic value of Human Resources is in knowledge of the Labor Market and in defining specifications for the design of processes, jobs and organizational structure. By filling in this strategic role Human Resources will most probably be seen as the bridge between the Board and the employees. They understand both sides and will (or must) be able to balance the interests of both sides in very different circumstances. I am therefore not in favour of giving Human Resources a position in the Board, that would disturb the balance. I prefer them to be one of the most important advisors of the Board.

Arie

[vinnie mirchandani]

why not ask Dirty Harry? -)

http://dealarchitect.typepad.com/deal_architect/2007/11/please-dont-cal.html

[Don Herrmann]

As with many things it depends. In this instance it depends upon both the abilities (read competencies) of the incumbent HR leader but also in the receptiveness of the organization. Many companies know the words but not all can live by those words. The same holds true for HR practitioners. There are many HR practitioners who simply cannot make the shift between social advocacy and business practice. They too know the words but sadly most do not comprehend those words and therefore lack the ability to put them into action. The promotion of anybody can do HR by individuals and organizations ensure the validity of this. There are global organizations that pretend to promote the ubiquitous seat at the table all the while promoting itself as the panacea to all with an interest in HR. Yet until this profession makes a clear distinction between clerical personnel functions and true business leadership these charlatan organizations will continue to bilk the gullible out of $160 a year.

Should HR "regain" it's seat. Unfortunately in the vast majority of instances it never had the seat to begin with, even if that seat was physically present. When HR can financially demonstrate the value of human capital without trying to replace management then it will gain a seat. Until then it is just another expression that somebody can write another book about and enjoy the profits from.

[Kevin Berchelmann]

I get a kick out of hearing from HR professionals that they want, “a seat at the table,” or even better, “How do I convince other executives
of HR’s value?”

Talk about missing the mark.

What seat?? Further, what table?? Having held senior roles in several organizations, it’s clear to me that most – if not all – businesses recognize value when they see value. Not when they hear it, but when they can actually see, touch and feel that value.

This "seat at the table" talk is futile. Those waiting to be "given" that seat need to wake up and smell the corporate coffee. Anyone who tells you that you’ll be “invited” to that table is selling snake oil, pure and simple.

Companies that put HR “at the table” do so because they've seen it be a real contributor to the success of the business, not because they read about it in some academic or consultant-authored glossy hardback.

It’s a similar situation with those who are looking for ways to explain their value to existing management. If you've got to explain it, it likely isn't as valuable as you believe.

Again, it goes back to value being recognized and earned -- no other reason. Not because of title, or functional name; not even the guilt-laden, “If they valued people, then…” comment. In short, for HR executives to be an integral part of a firm’s strategy and success, to be really successful and to add measurable value to their organization, they must start thinking like a CEO.

A business needs human resources (people, talent) to survive; it does NOT however necessarily “need” Human Resources (the function) to do so, and it's incumbent on those senior HR professionals to demonstrate real, measurable business value.

My opinion, anyway...
:)

KB
Kevin Berchelmann
www.triangleperformance.com

[Helene Wasserman]

ABSOLUTELY! Human resources should have a seat at the table in every year. That is, if the company wants to survive.

Many companies devalue human resources, considering it to be a "cost center," rather than seeing it as a true "profit center." The old adage "a penny saved is a penny earned" comes to mind. While human resources doesn't "earn" money for any company, per se, a well-run human resources department can save a company millions of dollars, sometimes saving the entire company.

As an employer-side employment attorney, I can say from experience that one poorly handled employee situation can put a company out of business. How those situations are handled typically falls squarely on the shoulders of human resources.

Being "at the table" means knowing how the other departments within the company function. This is as vital for human resources as it is for the other departments within the company to know how human resources functions.

A company may make the best widgets on the planet, but without the employees, and without a trained and knowledgable human resources department, the company would not exist.

At the very core of every organization is its human resources department. Human resources must be aware of its function, and how it relates to all other aspects of the organization. It is, truly, the only department that interfaces with everyone within the organization. As such, it must understand how all of the other departments function. Not so that the human resources practitioners can "cross train" to perform other functions, but instead to understand the needs of those departments that are within the purview of human resources.

A company's most valuable resources are its employees. And it is human resources' function to maintain those relationships in a lawful and human manner.

Hope this helps

Helene

Links:
http://www.fordharrison.com
http://www.employerhelpcast.com
http://www.employerhelpcast.blip.tv

[Sean Greathead]

If you change the question to "Should the HR Function have a seat?", the answer is Yes. Tragically, as both a Consultant and an HR Professional, I have yet to see enough HR folk who break the arguments of the Fast Company Article. HR People are generally not business focused enough. They focus on the wrong things. If they change focus in 2008, you will probably find that they will be called to the table more often!

My 10c Worth.

Sean

[Bet VanAtta, SPHR]

I had the priveledge of seeing Keith Hammonds deliver his speech on "Why we hate HR" in person. It was very funny and unfortunately in some cases the truth. It is not the whole truth though as there have been HR practitioners with seats at the table or that deserved them. I know of very few instances where a seat at the table was LOST therefore needed to be regained! Most are never given a chance.

In my career I have experienced the environment of having the seat and not being given the chance because of some unenlighted Sr Leadership. Even when I did not have the seat at the top I was able to make a difference in building partnerships with key leaders to move the business forward. I will always describe myself as a business partner first that brings HR expertise to the table. HR practitioners with the business acumen to tie HR strategies and delivery to the business needs and goals and help others to see, drive and influence this will be successful in being part of decision makling at the top of organizations.... SO I agree HR that practices with business acumen are critical to business decisions should have a seat at the table... I am not necessarily seeing the "regain" part... Here is how I describe myself to others professionally...A progressive Human Resources leader and consultant with a successful 20 year track record supporting complex organizations with diverse employee populations in the manufacturing and service industries at the corporate, business group, division and site levels. Recognized as a trusted advisor and highly collaborative functional executive with a notable ability to position human resources as a critical partner in delivering top tier business performance. Demonstrated success in:

HR Strategy and Planning, HR Transformation & Outsourcing, Leadership Development and Succession Planning, Talent Management and Staffing
Organizational Effectiveness, Design and Development Business Process Transformation, Executive & Management Coach, Strategic Business Partner, Change Management, Performance Management, Labor & Employee Relations, Compensation Planning & Design.

If you doubt an HR practitioner can deliver in this way visit my Linked In profile and read some of the recomendations from Managers, Leaders and employees I have supported!

[Pradipt Kapoor]

At the end of the day. All businesses, specially service businesses , are about people and processes. Unfortunately in todays world the focus has shifted to project management rather than people management.

Having said that irrespective of Outsourcing or Offshoring the HR function is one which probably has the biggest challenge on hand. Most organisations / industries currently are such rapid change and the management of change and this transformation puts big pressures on the HR. And stated or unstated the best CEO's also tend to be great leaders with right people policies. Hence successful organisations will continue to have the right investment and right commitment to HR.

[Lowell Williams]

HR has never been more critical in the 25 years I have been "at the table." US demographics show that the Baby Boomers are not being carried out on stretchers but instead are retiring in droves and early. With them go the implicit leadership and explicit job knowledge that many of them have employed in their senior staff jobs for many, many years. HR's role is to source, train and develop the new leadership of their organizations, and that role has not been more critical at any time since the Second World War.
Outsourcing has not changed that. HRO is merely another tool in organizational effectiveness, and one well understood by HR executives because they have been outsourcing since the 1980's (find me the person who started doing their own record keeping and account administration when 401k plans became legal in the US).
Find, train, develop and retain - that is the mantra of every seasoned, focused HR executive as we begin 2008. Any CEO who does not understand that should be checking the straps on her/his parachute.

[Ed Rankin]

If HR is still trying to get a "seat at the table" then the function is in deep, deep trouble. I think the activities related to human resource management are as important as ever to business. However, I think the role of the corporate intermal human resource management function will continue to shift from administrative to strategic. Corporate HR leaders will continue to rely more and more on external advisors and outsource services providers. I think you will see functional line managers assume more and more responsiblity for leading their functions. The HR function itself will continue to shift from "internal police force" to broker of HR subject matter expertise and resources.

[Shanker Pershad]

I agree whole heartedly with Ray Miller. All too often HR is more than willing to play second fiddle to egotistical and micro-managing chieftains in corporate world.

In my opinion, to earn a seat at the so-called table, HR would have to bring added value to their function.

Cheers!

Happy New Year!

[Hugh Strickland]

I have never valued the opinion of HR. Why flatter them with a seat at the corporate table?

[Jason Corsello]

HR should never have a seat at the table. In fact, those 4 words, "seat at the table", are a joke and make me cringe. Managing talent should have a seat at the table however it is managed or directed.

If your are an HR executive and complaining about not having a "seat at the table", 1) you are focus too much on "human resources" and not enough on "talent" 2) you are at the wrong company if the leadership does not support, emphasis and differentiate from its workforce, or 3) you simply are in the wrong position if you are complaining about not being included in key company decisions. The table is crowded and the only way to get their is to earn it.

[Jill Dunn]

The seat should be there for any professional that adds value to the organization. When this value does not exist then a seat should not be there.

To earn value in the HR relam, it is closely related to identifying where we can add value and where the company needs it most. Industry trends and market trends overall are important as well. Turning a blind eye to either would not be good and hence the out of touch HR person is born.

[Wayne Tarken]

It may be a very small seat. In my experience 10% of HR leaders do make an impact and do have a large seat at the table. CEOs don't make a move without them.

The others to a varying degree are not at the table and many do not want to be at the table. This percentage probably hasn't changed much over the years.

When CEOs start going expect more from the profession, this percentage will rise.