Why Does Everyone Hate HR?

Last Updated Oct 19, 2010 9:06 AM EDT

Every leader knows that people are a firm's most precious asset. Every leader should know that investing in people is more efficient than investing in technology. And seven percent of CEOs say they don't have the talent they need to execute their strategy effectively.

So why is HR always the least important voice at the table? And why does everyone hate them?

In most companies, HR lacks organizational clout because it doesn't have its own P&L. No revenue = no influence. That some firms have outsourced their HR function goes to show just how low it can fall within the corporate power structure. Others claim that HR doesn't exist to do anything -- it's just there to prevent lawsuits. Focused on compliance, it has neither the mandate nor the will to go beyond mild-mannered policing, which just annoys everyone. And the poor naïve employees who think that HR is "on their side" soon discover the opposite: that HR exists to make bosses' lives easier when they want to get rid of someone.

No wonder HR professionals are frustrated. They know how important they could be. Often, intellectually and professionally, they are light years ahead of the departments they service. They can see clearly many of the issues that bedevil their organizations and would like the authority to direct change. But they almost never get it. Instead, they're forced to witness countless executions, insuring that terminations are conducted appropriately and desks cleared without a fuss. It's enough to make anyone hard and defeatist.

There is another way. The firms that think most seriously about this problem are professional services firms, because they rarely have any assets except people. They're innovative because they have to be. And their most recent innovation could change the HR game. It's a rule, within some firms, that no one can be considered for senior partner without serving at least one year in HR. If you want to lead your firm, you have to have first-hand experience overseeing the assets. You may know a lot about money, but you get nowhere if you don't know a lot about people, too.

A year isn't enough to turn an emotionally under-developed number cruncher into a people person, but it is long enough for them to absorb the economic importance of developing talent. Institutionally, the fact that any serious player sooner or later must work in HR means that all aspirants have to treat the function with at least a semblance of respect. And when people issues are discussed at board level, it means that even executives with massive P&L responsibilities have some concept of human beings. It's a cheap, effective game changer.

When I mention this rule to other kinds of organizations, the management is aghast -- and the HR executives are exultant.

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    Margaret Heffernan has been CEO of five businesses in the United States and United Kingdom. A speaker and writer, her most recent book Willful Blindness was shortlisted for the Financial Times Best Business Book 2011. Visit her on www.MHeffernan.com.

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