Seeking Relevance

At the HRO Today Forum in Dublin during November, an undercurrent discussion occurred among a few people that was a combination of interesting, disturbing and, thought provoking. Will HR continue to be relevant?
 
 
The good news is that HR is relevant. It is hard to conceive of where the operating departments would be without the guidance of the HR department or the community of science related to people management that the HR department deciphers for them on an ongoing basis.
 
 
At first, I was inclined to think that the appropriate response to the relevancy question was, “how rude!” But I listened. And, at the least, a recasting of the challenge is instructive: What are the threats to the ongoing development of HR? I count at least three major issues:
 
 
Budget cuts. No one disputes that HR provides a needed regulatory and administrative function, but is that what HR professionals want to do with their time? That’s not the issue. It is the strategic service—such as organizational development products like engagement surveys or training—that are under fire. I also do not know why HR people do not rise up in righteous indignation against analysts like the Hackett Group that proclaim that “world-class” HR departments are ones that are less than a minuscule percentage of gross margin. Unless we fight back against this thinking, HR is doomed. I gave a speech last year in Barcelona during which I stated that I was not interested in discussing how small HR could get, I wanted to talk about how big the impact of HR should be. If HR, itself, does not debunk this connection between so called “world-class” status and a life in Lilliput, it is destined to shrink.
 
 
Technology. As they grow in sophistication and functionality, do employee and manager self-service portals pose a threat? Will the HR department become a veritable Wizard of Oz—a person or tiny group of people behind the curtain operating the machine? HR headcount is under huge pressure, and technology is one solution to providing service, but does it also pose the possibility of HR becoming anachronistic?
 
 
Measurement. Military snipers are taught to calculate their point of impact, and, if the point of impact is off, to “adjust their DOPE.” DOPE is an acronym for data on previous engagement. I am not sure that HR in many companies has enough data or spends enough time analyzing their current impact to “Adjust Their Dope.” The old business saw is, “If you cannot measure it, you must not care about it.” Well, if you cannot show your impact to the CFO, he or she will tell the CEO you are a “dope.” But measuring HR impacts will not be good enough to stave off the discussion of relevance. HR needs to develop systems and algorithms for tying HR metrics into corporate performance. No CEO reports things such as employee engagement scores on their earnings call. Think about how to link HR metrics to the numbers reported on an earnings call, and that will be a quantum step forward. Only a few companies can do this today. I also do not believe HR need measure everything for revenue and profit impact, but should be able to directly measure some of its activity.
 
 
Ultimately, there is research that I know is being done on whether the widely accepted Ulrich models for HR are still appropriate and if HR itself will be as relevant 10 or 20 years from now as it is today. To that end we are planning an Oxford-style debate on this subject at the upcoming North American HRO Today Forum (www.hrotoday.com/forum) in Philadelphia, PA taking place April 30 – May 2, 2013. I think it is an interesting and controversial topic. Ultimately, the question should not be is HR relevant, but how does HR continue to be relevant? All departments of all companies should endeavor to answer this question every day. Let’s have the debate and see how we all feel at the end.
 
 
Since HRO Today is hosting the debate, I will not say whether I am pro or con, but I will say I am pro being relevant. I hope you can join us for the debate.
 
–Elliot Clark