Time to abolish the HR department?

Published: 13 January 2020

As companies are confronted with today’s big challenges, ranging from global trade wars to local political, economic and social impacts to the Fourth Industrial Revolution, they need HR Executives who are strategic, business minded, own organisational effectiveness and are able to demonstrate measurable business impact. The C-Suite, however, seems skeptical that the profession will rise to the occasion. 

Blog Post Banner Image Time to abolish the HR department

A DDI report in 2016 found that CEO’s and board level executives rank the Sales Function as the most strategic function and HR as the least strategic. The Society for Human Resource Managers (SHRM) commented in a 2018 website article that the C-Suite views 41% of HR practitioners as reactive and only 11% as anticipators. They think that less than half are effective business partners. 

A recent KPMG global survey reports that a high degree of inertia and uncertainty exists among the majority of HR Practitioners. It seems as if the speed of change, the challenges posed by 4IR and the pressures on business of political, social, and economic trends are paralysing many in the profession. The same report stated that 48% of practitioners viewed their roles as unchanged over a period of time and only 49% believed that they were effective. In other words, HR is not keeping up. 

For decades, the HR function has been caught somewhere in the twilight zone between transactional work and strategic impact. The urgency and critical importance of transactional functions like payroll management, recruitment, the development and implementation of policies and procedures and managing workplace issues, have kept HR with their hands in the engine and their heads away from future focused and business minded contribution. 

The critical work of high impact strategic HR will only be made possible if a wedge is driven between tactical and transformative HR. Tactical and compliance-based HR functions should be set up as an Employee Services Centre, supported by e-HRM. The transformative work of HR should be rolled up into STRATEGY ENABLEMENT. HR as we know it, should be abolished altogether. 

The skills set, cognitive abilities and thinking preferences demanded of tactical HR, differs vastly from those required from strategic and transformative HR. 

Strategy Enablement is a broader and deeper role than HR strategy and as such will bring the gravitas and credibility to step up into the C-Suite to lead change with the CEO. When one analyses the requirements that CEO’s list when asked what they want from their HR Executives, four sets of competencies emerge. These are Daring Leadership, People Centricity, an Exponential Mindset and Digital Savvy.   

With the majority of HR practitioners rating themselves below par on these skills sets, the time has come for CEO’s to trigger the revolution and abolish HR. There is no time to wait for HR to evolve. The need is now, and it is critical. 

Demands around execution leadership, change facilitation and transformative impact, require DARING LEADERSHIP from the incumbent. Many CEO’s now call for the skill and character to lead any transformation, including M&A. The accountable executive is required to match or indeed exceed the speed of change in the rest of the organisation. 

PEOPLE CENTRICITY and specifically a noteworthy competency around creation of competitive advantage through an engaging employee experience is a core requirement. It is this competence in an organisation, that will enable success in the attraction and retention of high calibre staff, building morale and driving up performance.  

Furthermore, the demand is for a cross-functional, pan-organisational role player with a future focused, can-do mindset - an EXPONENTIAL MINDSET.  

DIGITAL SAVVY has become a non-negotiable competency for any C-Suite executive. A strategic approach to the role and contribution of people to the current and future success of their organisations, requires insightful responses to knowledge gained from data analytics. Aspects like predictive analytics in the attraction and retention of staff, intelligent performance analysis and quantification of HR value add, among others, require a 4IR adept practitioner. 

A mere re-brand of the HR function will not suffice. A re-brand is aimed at changing the image of something, changing the way it is seen by others. Transitioning the HR function into Strategy Enablement is not a re-birth, it is a new birth. 

Strategy Enablement will encompass strategic and transformative HR, but the mandate should include : Holistic performance measurement – both financial and non-financial; Confidence building across ALL stakeholder groups (beyond employees, to include customers, suppliers, shareholders); Target operating model design; Business review; Innovation measurement and Continuous improvement. 

In some organisations, the current HR executive would be capable of the new role. In many more, they might not, and the CEO should make the necessary, daring decision on the way forward. 

As a C-Suite executive, you are a forward thinker, a challenger of the status quo, a maverick at times. Here is a provocation for you: If you have an HR Department in your organisation, consider the benefit of abolishing it in favour of Strategy Enablement as described here. If you do not have an HR Department, keep it like that. Rather appoint a Strategy Enablement Executive to help propel your business into an accelerated execution mindset.

 Written by René Roos

Photo by Andreas Klassen on Unsplash

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