For all staffing directors that lament that they can’t get a strategic seat at the table, Keith Hammonds of Fast Company magazine has an answer for them: “HR people are, for most practical purposes, neither strategic nor leaders.” It’s time to consider recruiting’s role in why companies hate their HR departments – and if leaving HR for good is the answer.
It’s quite fashionable these days to bash HR departments for all of their failings. Last year, Fast Company magazine infamously took this to an extreme, pasting the headline “Why We Hate HR” on their front cover. The shock and outrage from the inflammatory tone of the piece continues to this day (60% of readers “hated it” according to Hammonds), yet there has been widespread support for the points he brings up (91% of people polled during a recent online interview with Hammonds generally agreed with him). Hammonds’s silver lining here is that “HR is the corporate function with the greatest potential – the key driver, in theory of business performance. In a knowledge economy, companies that have the best talent win.”
One look at the New York Times article (registration required) on Microsoft and Google’s grapple for supremacy confirms that talent has driven corporate performance since the beginning of the industrial age. Yet, what constrains the function from getting respected in most organizations is a focus on being good at “administrivia,” and not “the more important strategic role of raising the reputational and intellectual capital of the company.”
Secede or Die?
Most of the bigger complaints in the article are aimed at the people who manage issues like pay, benefits, training, performance management, and retirement. Does that mean recruiting is really just guilty by association? Not exactly. Some of the same criticisms could apply to many recruiting departments as well: using efficiency-focused, rather than value-focused, metrics that demonstrate business impact; restrictive bureaucracy, often driven by fear of legal repercussions and compliance; a focus on activities versus outcomes; and a push for short-term cost efficiency over longer-term value. Yet, in many other cases cited in the article, recruiting is merely guilty by association.
In fact, several recruiting leaders I’ve spoken with are as frustrated with HR as the rest of their company – the policies, the restrictions, and the myopic thinking. What was surprising to me was that, among the talk of employee engagement, benefits, and mentoring programs, recruiting was rarely even mentioned in the article. So here’s a radical thought. Instead of being HR’s red-headed stepchild that’s locked away in the basement (only to see the HR team take all the credit for the big accomplishments of your team), it’s time for truly strategic talent management departments to secede from HR. To stop sitting at the “people-people” table and start sitting with the “businesspeople.” To take the initiative and show the business impact of effective employer branding, referrals, strategic sourcing, and talent-supply-chain management. To think and act like a profit center, not a cost center. And, to report directly to the CEO or vice president of corporate strategy, not the VP of HR. As the HR outsourcing tide continues to rise and swallow anything in its path, secession may be the best possible option for recruiting and talent management – perhaps the only functions in HR that a company should not fully outsource if it wants to maintain a competitive advantage in a knowledge-based economy.
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The HR Death Spiral
As part of the HR silo, it is inevitable that recruiting will be vulnerable to HR outsourcing initiatives. Today, many companies (94% of them, according to a Hewitt Associates survey of large employers) are already examining how to reduce the administrative costs of HR by outsourcing administrative-heavy functions like compensation, benefits, and retirement. It’s still somewhat rare that recruiting falls under that same axe – partially due to the poor product offerings in this area from HRO vendors (who often repackage their same broken internal recruiting processes and tools), and at times to a realization that staffing is in fact a very strategic business function that is best done by in-house experts in each organization. But the writing is on the wall.
According to the same study, by 2008 many organizations plan to expand outsourcing initiatives to cover other HR activities like learning and development, health and welfare, global mobility, and, yes, recruiting. The real rub, however, is that companies that want to get strategic about talent are starting to hire businesspeople from outside the staffing world to run departments. This is a growing trend I have seen across the country. Other organizations have gone the other way, bringing in HR managers with little to no recruiting background to run staffing as part of a rotational program.
To avoid any of the above fates, I highly suggest you read Kevin Wheeler’s recent article, “Will Your In-House Recruiting Be Outsourced?” and John Sullivan’s excellent profile of Valero Energy (both of which fall into the “I really wish I’d written that” category). Both are excellent reminders of the type of thinking that will be needed for recruiting to become a vital business partner inside a company. It is unfortunate, but I have yet to see a convincing case study of a company systematically tying recruiting initiatives to increased revenue and profit, although I am hopeful that several exist. You will be forever judged by your current accomplishments, not by your potential. By becoming an inseparable part of your company’s business strategy, your job is likely secure. If you’re limited in your ambitions by ineffective or even hated HR leadership, it’s time to build your secession plan.