Fixing HR – How Should the Function Continue to Adapt?

Fixing HR – How Should the Function Continue to Adapt?

Charles Goretsky Charles Goretsky
17 minute read

We’ve recently come across a few older, but widely circulated and commented upon articles, blogs, and Linkedin comments that were down on the Human Resources function. In particular, the “why we hate HR” articles from Fast Company, Harvard Business Review, and Forbes will likely be familiar to anyone who’s been in the profession over the past 20 years. The messaging still stings to this day and got us thinking about what issues continue to exist, how real they are, and whether “fixing HR” is really an issue.  

Human Resources departments are viewed at times negatively for a number of reasons, although it's important to note that perceptions can vary depending on individual experiences and organizational contexts. The perceptions are often linked to a combination of top leadership expectations and a lack of understanding of the true role of HR in a contemporary company. While the function has certainly evolved from its “personnel” foundations in the early 20th-century industrial economy, there are still views that position HR as a primarily administrative driver of workplace rules and restrictions, and thus the perceived need for “fixing HR”.

Common concerns voiced about HR

Here are some common (misplaced) reasons why HR may be viewed negatively by employees:

  • Misrepresentation of HR as “employee-centric”: While at times believed by line employees, the notion that HR is the “employee advocate” is misunderstood. It is based upon the idea that HR’s role is to advocate for the individual employee, as opposed to representing the needs of the entirety of the employee population.

  • Enforcer of policies: HR departments are responsible for creating and guiding the enforcement of organizational policies and procedures. This can sometimes lead to employees perceiving them as rigid and bureaucratic, especially if they feel that policies are applied without consideration of their individual circumstances.

  • Focused on/biased towards management interests: Human Resources departments may be seen as prioritizing the interests of management over those of employees. This perception can arise when HR is involved in decisions related to layoffs, restructuring, or disciplinary actions that are not perceived as fair or impartial.

  • Inconsistent support: If HR is perceived as providing inconsistent or inadequate support to employees, it can lead to negative views. For example, if HR fails to address employee concerns or does not provide effective solutions, employees may feel unsupported or undervalued. With widely accepted ratios of one (1) HR staffer to every 100+ employees, individual attention may in fact fall short.

  • Lack of expertise or understanding: HR professionals are expected to have expertise in the full range of areas, such as employment law, compensation, and benefits, recruitment, career development, etc. If employees feel that their assigned HR support (e.g., an HR generalist) is unable or unwilling to assist them in handling their specific challenges, they can view the entire function as offering lower value.

  • Bureaucracy and red tape: HR processes, such as performance evaluations, merit salary processes, or training programs that are designed to meet the needs of every department, function, and location for the sake of consistency can be perceived as bureaucratic and time-consuming.  Non-integrated employee-facing systems often contribute to this dilemma.

  • View of HR as decision-makers: Human Resources departments are often viewed as responsible for making decisions that affect employees, such as hiring, promotions, and compensation. While HR professionals might create the processes and policies, those exist to support managerial behavior and guide decision-making in a fair and equitable manner.  However, HR often takes the blame for managers’ decision-making.

Managers may have their own frustrations or challenges when working with HR. Additional concerns commonly raised by managers include:

  • Increasing “HR Work” placed on managers: HR has increasingly automated its work and placed more self-service tasking on managers, with FAQs, automated processes, etc.  While it may be true that “in the old days” HR did some of the work that is now either automated or handled by managers (screening of resumes, career coaching), the current state of affairs and use of technologies are designed to be more supportive of efficiency in supporting administrative and managerial tasks.

  • Conflicting priorities: Managers may perceive HR as prioritizing policies and procedures over operational requirements or that HR's decisions do not align with the needs of their specific teams. Oftentimes, managers’ complaints about practices such as forced rating distributions, the need for oral and written warnings, and limited merit increase pools actually stem from top management concerns about accurate performance assessments, legal risks, or budgetary concerns.

  • Lack of flexibility: Managers sometimes express frustration when HR policies or procedures are inflexible and fail to accommodate unique or evolving circumstances within their teams. They may believe that HR should be more adaptable and responsive to the specific needs of their employees.

  • Limited understanding of operational challenges: Managers may feel that HR professionals lack a deep understanding of the operational aspects of their teams or departments. This can lead to perceptions that HR initiatives or policies do not adequately address the practical realities and challenges faced by managers and their teams.

  • Lack of strategic alignment: Managers may expect HR to be more proactive in aligning HR strategies with the overall business objectives and providing insights and recommendations that contribute to organizational success. If HR is perceived as being more administrative or transactional, it can create a disconnect with managers who seek strategic partnerships.

So what is the reality?  

The reality of the situation is, as usual, somewhere in between the perceptions of employees and managers and the circumstances surrounding the actual activities and contributions of HR teams in any given company. Fixing HR is a theme for those HR teams that lack clear and consistent strategic alignment, those that prioritize addressing the needs and preferences of executives over the employee population, and others who focus primarily on meeting employee concerns and needs. That said, experience tells us that fixing HR is a more nuanced consideration for the many HR teams who consciously seek to strike a balance between the strategic business needs of leadership and the preferences of employees alike. Those still have opportunities as in every other function, but not as severely as the others.    

One also must factor in the preferences and requirements of top leadership, including their perceptions and willingness to listen to and consider input and innovations from their HR team.  This comes out in the assignment of budgets and headcount, the amount of discretion that individual managers have over their own operations, and the role of HR (or any other corporate function) relative to operating managers’ job design.  It is a bit of a tightrope to walk, with changes in top leadership often requiring renegotiations and matching of expectations and perceptions/biases.   

Some good news however, comes from a 2018 survey by BambooHR which offers insights into the current state of affairs that suggests that fixing HR is not an issue.  The study revealed that 83% of executives feel that HR was effective in improving the workplace, and 84% believe they offer excellent support – so far, so good.  However, the percentage of managers and employees who agree with those statements drop off considerably, indicating that they are less satisfied with the type and quality of support received.  

The data further reveals that the older the employee, the less likely they are to agree with those statements.  With the increasing retirements of Baby Boomer and GenX populations and the rise of Millenial and Gen Z employees (and managers), there is hope for the near future.  A positive view of HR’s commitment to balanced outcomes that drive increased productivity and business results offers opportunities for increased HR innovation and contributions to the meeting of business objectives.  

That’s why the employee (and manager) experience is so vital to the improvement of perceptions of HR contributions.  A focus in many advanced companies on the employee experience, such as with improved technology implementations, and the increasing use of listening and talent measurement systems might well be contributing to this improved perception among younger workers and managers.

What can be done to address these perceptions?

A key pair of moves to take while fixing HR is to build an HR brand and rejuvenate the HR operating model to balance expectations for what is being delivered and who is being served. Leaders and managers need confidence that the focus is on supporting business growth, productivity improvement, and stability.  Employees need to know that their needs and preferences are being heard and considered in the design and development of processes, systems, and programs that support their employment. Take positive steps depending on your organization’s set of circumstances, to potentially include:

1. Separate out compliance, administrative, policy, and disciplinary work from strategic work. 

Restructure HR roles away from generalists to specialists, even if that leaves only a couple (in lean teams) of true HR Business Partners. Aside from the more traditional separation of payroll, benefits, onboarding, exit processing, and related tasking being moved into a shared services function, consider having employee relation specialists who focus on guiding managers and employees through the management of individual performance issues, policy violations, and the like. Plan on leveraging data from HR records to report on trends that indicate the need to improve programs and create interventions and organization development efforts for enhancements.

2. Focus a few HR Business Partners as strategic allies.

Create internal consulting capabilities that are designed to integrate the efforts and use of the skill sets of the functional experts in recruiting, compensation, learning & development, HRIS, etc. Build capabilities based upon performance consulting, business driver and operational expertise, core analytics and reporting, employee listening, and organization development (OD) skill sets.  Promote their work and contributions regularly.

3. Rename the function.  

Market HR as a driver of people-centric program development and operations. Leverage terms such as “People”, “Culture”, “Performance”, “Talent Optimization”, “Workforce Strategy (or Solutions)”, etc. Separate out the strategic part of the operation from the compliance and administrative functions. HR-shared services could be renamed as “employee services” to separate those and set expectations that they are specifically worker-focused.

4. Engage employees in the design of their experiences.  

Conduct surveys and process reviews with managers and employees alike to get their feedback on processes, policies and programs that have a major impact on the quality of their employment lives.  Create a sense of ownership (and control) over how they are managed with post-process reviews of the annual performance assessment workflow, hiring processes (including those not selected), benefits re-enrollment, training programs, etc. Leverage design thinking concepts for a disciplined approach.

5. Communicate, communicate, communicate. 

Develop capabilities for regular updates and actions being taken in the name of improving the business and employee experience.  Think of how to develop and spread awareness of the employee value proposition, especially in those areas that employees are most concerned about.  Topics to focus on might include the promotion of learning program offerings, career development opportunities, or updates on HR process simplification. Provide insights from employee listening efforts and most importantly, take employee feedback from surveys and listening sessions to heart by making improvements and communicating those upgrades widely.

These actions communicate that HR is focusing on building and improving the business, open and proactive in considering end-user feedback and perspectives, and agile in managing its operations.

Prepare to address disruptive work trends

The biggest part of “fixing HR” is just doing what the pundits have been saying for years – thinking strategically.  With so many large-scale changes either currently emerging or being foreseen (e.g., those labeled under the “Future of Work”), taking stock of what will be needed to respond and adapt to these trends in the coming years will help in the planning of a responsive and up-to-date HR function. Key changes that are either current, evolving, or projected include:    

  • Continuing talent shortages and skill requirement changes. Increasing difficulties locating (and hiring) suitable candidates for open positions, compounded by unprecedented turnover rates and rapidly changing skill mixes will continue to challenge leadership teams for the foreseeable future.

  • Remote work. Balancing the strong and widespread employee desire for alternate work locations (e.g., home) with the need to develop and manage organizational culture, collaboration, and team-centric ethos, employee engagement, innovation, and aggregated productivity are creating new challenges (and headaches) for HR and leadership teams.

  • Increasing workforce diversity. Workforce population shifts are occurring worldwide, with immigration, changing birthrates, decreases in post-secondary education participation, financial pressures to delay retirement, etc. directly impacting workforce availability and driving recruiters to less traditional labor pools.

  • Flexible team structures. The need for more agile organizational structures that allow for highly responsive and flexible product and service design, development, and deployment are increasing in popularity.

  • Artificial Intelligence. Opportunities are increasing to integrate AI and machine learning technologies into workflows and job designs that are taking over routine tasks across all functions and operations of a business.

  • Increasing prevalence and call for insights from digital systems. Systems capabilities that generate data related to employee skills and capabilities, perceptions, engagement, productivity/monitoring, etc. are driving increased demand for a better and more objective understanding of talent capabilities, trends, and occurrences.

  • New challenges facing people managers. Unprecedented shifts in worker location, work monitoring biases, productivity concerns, team composition (of contractors and employees), turnover rates, and worker expectations are rapidly changing the requirements and demands from people managers.

  • The cultural impact of increased outsourcing/partitioned work. Maintenance of corporate and team culture in the face of hybrid work, increasing use of gig or project workers and subcontractor teams create new challenges for the management of loyalties, work ethics, and the desired employee value proposition.

  • Increasing environmental threats. Changes in weather and climate-related trends and events, public health-related outbreaks, socio-political upheaval and divisiveness, etc. are driving the need for scenario planning and facility/work location preparedness.

  • Employee and candidate concerns over social awareness. New generational preferences and calls for active corporate social and community awareness and action (environmental, social, and corporate governance (ESG)) are driving the issue into the forefront as talent attraction and retention activities.

And there is a continuation of key trends in:

  • Digitization. New types of systems (talent marketplaces, learning experience, AR/VR, open education platforms, etc.) are bringing associated new opportunities for insights, continued pressure on HR to leverage data and analysis, speed-to-competency, a democratization of skill development and mobility, and increasing changes in the composition/needs for existing job roles.

  • HR Business focus. The pressure for HR to demonstrate its value to driving and managing business outcomes has not changed, and in fact, should increase as businesses face and address many of the trends outlined above. 

How to start addressing the emerging requirements now

In addition to building a brand and updating the HR operating model, move beyond "fixing HR" and start preparing for the future by building staff capabilities that will be able to address the new realities.  This can come in the shape of hiring employees with different skill sets, transferring in people from other departments with the needed skill sets, developing the existing staff’s expertise, partnering with other functions and departments to jointly develop capabilities, and/or identify external people or organizations with whom to jointly develop and deliver those capabilities.       

Based upon the organization’s strategic plans and any relevant industry/market segment trends, consider building (or buying or borrowing, etc.) competencies in the following strategically important areas of expertise:

1. Employee experience (EX).

Retaining existing employees is an essential element of managing a turbulent labor market. Having staff member(s) who are comfortable with a combination of employee listening (e.g., surveys, focus groups) and process design and improvement (e.g., Six Sigma, Lean) is essential as a result.  Create a continuous focus on improving how employees interact with the processes and systems that matter most to their daily work lives.

2. Coaching of managers and leadership. 

Taking a disciplined and structured approach to developing managerial capabilities across the company through the measurement and ongoing development of people managers to enhance EX, engagement, retention, well-being and productivity/output.

3. Talent Planning.

The prevalence of talent shortages is driving more focus on understanding and projecting staffing requirements and locating alternative labor sources. Basic workforce and talent planning can both be accomplished without heavy investments.

4. Employee well-being. 

Being prepared to identify issues related to burnout, stress, and related causes and make referrals to the appropriate resources for employees who work either onsite and/or remotely. This includes challenges related to mental, physical, emotional, and even financial health management.

5. Data literacy. 

Hiring and developing skills in the use of quantitative analyses to identify trends and issues, opportunities for enhancements, and impact on the most valued talent and business outcomes. Seek to develop more highly integrated people, transaction, sentiment, business, financial, operational data and analytics for the HR team to leverage.

6. Emergency preparedness.

Working with health and safety, IT, finance, communications, and facilities teams (plus local government agencies) to develop formal plans, processes and partnerships in preparation for the next pandemic, ecological/weather-related disaster, etc.

7. Human/machine interactions.

Hiring staff knowledgeable in, and creating cross-functional teams to address the use and implications of AI, robotics, chatbots, etc. They should explore future applications and impacts on targeted jobs/functions, training/upskilling requirements, and technology/financial/headcount budgets.  Consider processes to audit HR applications to ensure that the algorithms are unbiased.

8. Talent ecosystem management.

An increasing need exists for knowledge and connections related to identifying and managing where talent can be “bought, built, borrowed”, etc. This involves talent partnership identification, deal-making, and management for “gig” or temporary workers, and should be conducted in close association with the procurement function. Consider tapping talent acquisition (TA) professionals for this capability.

9. Business expertise.

The HRBP role is the core lever to increased business focus and impact.  Requiring a level of operational knowledge similar to the line managers being supported, HRBP’s should also push such knowledge to the center of excellence (COE) partners they bring in with coordinated responses to talent challenges.  Consideration of non-HR professionals to fill HR roles should only increase.

10. Team selection.

With the projected movement towards increased cross-functional, team-based work, the ability (and tools) to match employees to project charters for optimized team makeup will become essential elements of success. This includes the use of talent marketplace technologies, work style, and skill assessments, network building, etc. for project teams that form and then disband.

11. Diversity management. 

Given increased diversity in the workforce, a proactive ability to build pathways to work effectively with others, especially with the integration of multi-location and partner organization cultures together.  With non-native workforce growth, melding the diverse workers into a single, cohesive, and productive workforce will take strong leadership and guidance. Traditional organization development (OD) intervention skill sets can work well here.

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