You remember the personnel department, don’t you? That’s what the human resources department used to be called, when 90 percent of its function was collecting and filing new hire paperwork from employees.
If you don’t remember the personnel department, it might be because it was rendered obsolete around the 1980s and 1990s. It turns out businesses needed a higher level of sophistication than just paperwork. CEOs in particular needed experts in the areas of labor compliance, enforcing corporate rules and regulations, as well as responding to benefits questions from employees and paperwork. So the personnel department evolved to become known as HR.
Now, it’s HR’s turn to evolve. Today, I’d argue that HR is nearly, if not completely, obsolete. That’s because, once again, businesses and executives need a lot more from their HR team than “you can’t do that.” Today’s CEOs see HR not as a strategic partner, but as a person or group who handles paperwork and administration; is the rules enforcer of the organization; and keeps companies from being sued, fined or its executives thrown in jail.
In today’s era of business, what CEOs want to see from HR is a group that can develop the organization culturally; strategically advise the company’s leadership on talent; and consult and help employees on personal development, growth and performance.
In fact, the Society for Human Resource Management released its competency model last year, and only one of its nine competencies involved standard what we might consider traditional HR activity. The new competencies included business acumen, global and cultural effectiveness and consultation — not what most HR practitioners are doing today.
Moreover, just two years ago, Deloitte’s “Global Human Capital Trends” report noted that “HR needs an extreme makeover driven by the need to deliver greater business impact and drive HR and business innovation.” There is a yawning gap between what business leaders want and the capabilities of HR to deliver.
In my own practice, we find that about 80 percent of HR professionals aren’t equipped to effectively lead these new expectations. In fact, most HR professionals are perceived to be obstacles to growth. At even the most basic level, we hear excuses like, “We’ve always done it that way” or “You can’t do that.” They’ve become the “Department of No” in an era where executives and entrepreneurs are looking for innovative ways to say “Yes.”
A 2014 Harvard Business Review article even suggested breaking the HR department into two parts. The first part would be administration (basically the traditional notion of HR), reporting to the CFO, and the second would be HR-LO (for leadership and organization), which would focus on improving the people capabilities of the business and would report to the CEO.
What’s more, the future of business and organizational performance isn’t going to need as many tacticians. Just as robots will soon replace professional taxi and truck drivers and manufacturing jobs, artificial intelligence is poised to replace many HR professionals in many of the back-office administrative tasks they’re used to completing.
There are some encouraging signs of change. Disrupt HR, an organization similar to Tedx, holds conferences to discuss new ways to manage talent. It believes that how we’ve approached people and talent in the past won’t be the best way to approach it in the future.
Many entrepreneurial companies now eschew the term “human resources” for “people” and “culture” in attempts to make the old seem new. This is an acknowledgement by cutting-edge CEOs that HR isn’t working and that reimagining its title is the first step if rethinking the role.
Still, the most fundamental changes will need to take place among HR professionals themselves. For starters, HR people need to stop being dictators and start being consultants. A strategic consultant offers options, not negativity. That’s what HR needs to become.
Additionally, redefining HR also means getting out of the weeds and focusing on the bigger picture. For instance, a major discussion in the talent world recently has been the rethinking of performance reviews. I spoke at an HR conference last year in favor of eliminating them, and you could hear the crickets. The following month, I gave the same presentation to a group of banking executives and got a standing ovation.
Many HR professionals tend to be process-oriented in an era that demands creative and strategic thinking. Workforces today are less about control and more about self-management and direction. For these professionals to enhance their credibility and elevate their standing in the organization, it’s time they take the initiative and start moving their own development in this direction.
Eric Swenson is the managing director RSJ/Swenson LLC, a human capital advisory firm based in Encino, California. To comment, email firstname.lastname@example.org.