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Newsletter / August 30, 2022
Move Your HR Team from Support to a Driver of Top-Line Growth!
Does your company really need an HR Manager and staff? Or could the company get along better with another model?
Recently I was at a client visit with a CEO, and that was what she asked me. “I spend too much on HR when the department does not provide any top-line growth. We’re going into a recession, and that department does not provide any operational drivers that really push an ROI,” she said.
Whirlwind question! She was contemplating reducing costs and reducing HR headcount while replacing it with an HR Service for less money.
This gets into the competencies of Line & Staff Accountability under the leadership-management function of Teamwork. The Axiom holds that staff accountability (HR) is to support the line, and when this is not done, the line takes action in their own hands, and does not use staff. I suspect the line units at this company were pressuring the CEO because they were receiving little support from HR.
I was later to find out that was happening. HR was so consumed with the soft skills of Diversity, Equity, and Inclusion, that it forgot that operational areas spend 90% of their time on hard skills within their departments. Without hard-skill support from HR, you really should consider a different HR model, and with a coming slowdown/recession, it is a fair consideration by that CEO.
There is a corresponding opportunity which is transforming at some companies and we believe it has some merit instead of the current HR organizational structure: Move your HR team from support to a unit of top-line growth. With a potential recession, it not only offsets a headcount loss, but transforms a staff unit into a line unit.
In strategic managed companies, there is a high-level need to be accountable for several operational areas, and this offers a keen opportunity for both the company and the HR team. The areas of strategic planning and operational planning both fit into this profile. Think about it. The HR department probably has one of the more educated teams, and this would allow it to become operational.
There could be some resistance to change by HR personnel, but keep in mind that companies are transforming other departments, such as moving sales, marketing and customer service into one unit of Customer Engagement, and IT is being transformed with Engineering into R&D. It makes sense that HR could become more proficient and valuable with a transformation of its own. You might even start seeing HR managers being promoted into operational departments, a move seldom seen in executive suites.
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