Your business may be many things, but regardless of its industry or size, it’s nothing without its people.
Partnering with, or working in, Human Resources is a reality for many workers. Quite often they are your employees first contact with the company. They are also there to farewell employees – with many touchpoints in between.
There are often unflattering opinions of said department – “They are only there to make our lives difficult”; “you only hear from them when there is a problem” through to “you know HR stands for Human Remains”. Wow! What a reputation! Yet they continue to show up time and time again with little thanks or praise.
Whatever your opinion, HR (aka People & Culture or People Operations) exists for a multitude of reasons. There is definitely a compliance arm to what they do with many compulsory training sessions but they also do so much more. More broadly described by AIHR as involving 7 basic functions:
- Recruitment & selection
- Performance management
- Learning & development
- Succession planning
- Compensation and benefits
- Human Resources Information Systems
- HR data and analytics
A brief history of HR
The massive growth of companies as a result of the Industrial Revolution meant there was no longer direct contact from bosses to employees. Employees became increasingly frustrated that their concerns (largely about unsafe working conditions) weren’t being heard. This resulted in mass strikes and employee walkouts. It’s said employee wellbeing was seen to have a direct impact on their productivity and the HR movement was born.
HR is an uncommon department within an organisation as the roles have traditionally been largely occupied by women. Sometimes believed to have originated from women traditionally seen as being more empathetic and caring, or simply coming down to the timing of more women entering the workforce around the time the movement started, there continues to be speculation as to why it is still this way. Currently standing around 80% female, interestingly there is still a gender pay gap. Women outnumber men in HR, but a new survey suggests a gender pay gap still exists.
A catch 22 situation
HR has the difficult task of being there for employees, whilst simultaneously towing the company line. It’s not unusual that these two are mutually exclusive.
HR Leaders may have been made aware of inappropriate behaviour of a Leader. In an attempt to take it further they’ve discovered that the higher echelons don’t have their back. Not only this, but they are supporting the alleged perpetrator for any multitude of reasons. These HR Leaders then have a very difficult predicament. To not proceed with the complaint (and as they wouldn’t be able to discuss this, they could then face a backlash among the employees for not supporting them), or calling it out knowing full well they may have to look for alternate employment.
Depending on the outcome, this could lead to employees thinking that HR is not there to listen to their concerns or support them, instead only worried about keeping the C-Suite happy. It can certainly be a difficult task to have the trust and transparency necessary for this department when there are potential conflicts of interest.
Difficult to quantify
It’s not unusual for other department heads to be able to quantify any ROI to the CEO or Board, but with HR that’s not always the case. How can you determine the true gains that are achieved by employee wellbeing, or an amazing company culture?
There are instances where a financial cost can be quantified by perhaps employing a successful retention strategy (cost of hiring, L&D and internal career progression vs cost of hiring, L&D and attrition), but largely programs are put in place to benefit the overall culture of the organisation. A certain ‘vibe’ is difficult to measure, yet is priceless. The culture can be the reason people want to join your organisation and why those already there want to stay. And yes, there is a massive impact to the bottom and top line in this respect.
So how does HR fit into the C-Suite?
The last few years have brought about significant change. Many of the sudden pivots companies were forced into were almost instantly envisioned and deployed by HR. Formerly, it was common to report to a senior level manager, while other heads were reporting directly to the CEO. Thankfully we are starting to see a change with more and more companies and Boards realising the benefits of having a CHRO. But this is still an evolving space.
According to a report from KPMG, 3 of the 5 biggest challenges Australian companies are facing are directly related to HR. Arguably the biggest challenge (77% of Leaders responding it is keeping them up at night) being cited as ‘Talent acquisition, retention and re/upskilling staff to meet a more digitised future’. It is crucial that HR is part of the C-Suite as they are the direct conduit to the company’s people as well as being the team directly responsible for the implementation of any people focused initiatives.
HR exists to represent both the employees and the company. Keeping them at a distance from the top leadership team is a disservice to the department and the organisation. They are a strategic business partner focused on putting people first, without which there is no company.
Every company is different and has different needs through their lifecycle, so choose the right HR partners for your business and empower them. See what a difference aligned people and culture leadership can make to your business and your Humans. After all – they are your greatest asset.
For more information about how Humanico can help you understand and celebrate your people, get in touch with us below.