How HR departments fail companies from inside and outside
Let’s start by analysing how HR departments sometimes “wrack havoc” on human resources of a company.
The infamous Fast Company article of 2005 “Why We Hate HR” is as discussed and relevant as before. It trashes HR people as dull-witted pen pushers, “The human-resources trade long ago proved itself, at best, a necessary evil — and at worst, a dark bureaucratic force that blindly enforces nonsensical rules, resists creativity, and impedes constructive change. HR is the corporate function with the greatest potential — the key driver, in theory, of business performance — and also the one that most consistently underdelivers.”
According to the same article, “a 2005 survey by consultancy Hay Group, just 40% of employees commended their companies for retaining high-quality workers. 41% agreed that performance evaluations were fair. 58% rated their job training as favorable…. Most telling, only about half of workers below the manager level believed their companies took a genuine interest in their well-being.” Only half of employees think HR cares about them?
HR staff are either perceived as harbingers of bad news or in “best case scenario” of doing a ‘useful’ activity, they are still a bureaucratic and legal bottleneck, usually slowing down operations and generating much negativity and pessimism among employees. Then I guess it shouldn’t surprise us that more and more companies observe more direct and stronger connections between employees and their managers as a result of eliminating the HR function. And one company – perhaps jaded from its previous HR department’s debilitating effect, hired one HR staff, but agreed on not calling her that – she goes without a title. Business is moving the other way, to reduce HR departments by outsourcing its paper-pushing functions; PriceWaterhouseCoopers estimates it can shave 15 to 25 percent off your HR costs. These humans are simply not resourceful enough.
Wow. Can it get any worse for the HR staff?
In one very public scandal, BBC’s HR manager Lucy Adams “was accused of presiding over ‘corporate fraud and cronyism’ over huge pay-offs to former executives” add a further insult to injury. Some of most notorious HR strategies such as PTOs, PIPs and performance reviews may even destroy a company.
It thus seems that existence of many HR departments defeats their very raison d’être as far ‘internal’ (i.e. inside a company) activities and corporate goals are concerned.
What about an HR department’s ‘external’ role, that of scouting for the best and the brightest? Company’s strategy is its culture (created by its employees), and its culture is its strategy, which is of course true and goes to say how essential it is to find the right people who would not only have skills-experience match but more importantly have a cultural fit for the company. Zappos, Pixar, Cirque du Soleil and others successful companies attribute their success primarily to their people.
Yet, despite the known and accepted fact that many applicants forge and offer polished cover letters and CVs, HR departments – the bigger/more famous the company, the bigger number of applicants apply for the company – continue to commit two essential mistakes:
- overly rely on data on CV/cover letter;
- look for as close a “literal” (as opposed to “big picture“) match to the job vacancy as possible.
In most cases, the first mistake yields much redundant work (for and by HR departments), disappointment (when, once accepted, it turns out the candidate didn’t have either good enough/pre-requisite skills or experience or was not a cultural fit), or lose (employee being fired or resigning shortly after joining the company).
The second mistake, equally or even more widespread, not only causes all the same problems, but, more importantly, discards candidates with profiles that are wider or somewhat different from the vacancy scope. In the modern age in which present and future belong to generalists, HR departments’ tunnel vision – the same tunnel vision that discredits HR as a department unable to see the big picture (company’s vision) nor assess or understand well enough business vision as to deserve a decision-making power inside the company – turns off many a qualified generalists (i.e. multidisciplinary people) or candidates with a wide cross-section of skills and experiences, who would have otherwise been (significantly) useful and thrived within the company.
Thus the conjunction of the two above-mentioned mistakes and standard HR internal practices end up costing the HR not only their reputation, but in a longer run, dissuade companies from the idea of having a dedicated HR department. Or, as my generalist friend Arnold suggested, given how standard matching algorithms work in general, it ain’t no big stretch to imagine that if HR continues on its current path, it will inevitably lead to HR function being automated via a software program with one of standard programs specially designed for that purpose.
Lastly, erroneous hire usually ends up being a waste of monetary, time and emotional investment both for a company and an (erroneously hired) employee, all the while as HR department is being paid to ‘recruit’ talent.