11 Jun Why owners and managers need to put the boot into HR
Chief executives have sat back for too long – it’s time to take control over HR and share the responsibility with their managers.
If Bill Shakespeare was rewriting his play about the great King Henry, undoubtedly he would change his corporate rejuvenation directive from “first kill all the lawyers” (now that they are on the downward slide) to putting the boot into human resources.
In a tougher corporate environment, with challenging competitive threats and demanding customers, much of the human resources system of the last decade or so can be seen as dangerously derelict.
With few exceptions, it has become overly systemised, disconnected from the real corporate needs of capable human beings and their skills, too dependent on touchy-freely trends out of sync with a hard-arsed shop floor and too slow to react to tectonic changes of technology and customers in sectors.
The rise of HR managers and consultants over the last two decades has been driven by the appalling state of industrial relations and human resource legislation and interference from governments. Chief executives and company owners, fearful of litigation and brand damage, as well as wearied by unfair dismissal rorts and poorly legislated and regulated workplace agreements, have too often just handed the whole mess over to HR managers or consultants, or contracted out as many staff as possible.
That worked for a while as traditional wage pressures eased, especially in the services sectors.
But now that owners and CEOs have to run their businesses smarter and harder to get them into the ever-moving sweet spots (replicable, profitable growth), they find that when they try to shift the corporate levers, the people factor does not react very well.
Bring it back in-house
Mining companies are switching expensive contractors and labour hire teams for direct hiring to improve efficiency. BHP and Xstrata are rapidly moving back to direct hiring and putting field workers back under direct control of field managers.
That has required a rethink of what sort of people to hire and how to create a new corporate culture with direct communication . . . and no excuses. It requires field managers who have HR skills built into their range of management abilities, rather than hospital-passing to an outsourced or distant HR department.
That’s a learning curve.
This is being replicated across food processing, transport and retail. Companies are realising managers need a much stronger connection with their teams, including the ability to choose their own people that suit their style and needs.
Much of the angst has arisen from HR setting job descriptions which tick all their boxes, but don’t describe what operational managers need. HR can be touchy-feely but managers have to deal with the ugly coalface of work and humanity.
Certainly, internet job searches and screening have created a class of workers who can game the system, none more so than middle managers and contract workers. HR reacts to the gaming and changing legislation with more tests and screenings.
But the result is increasingly seen by operational managers as delivering people further away, in real skills and attitude, from those they need.
It has bred a class of employees and middle managers who “know their rights” and can just check into HR if they get any pressure on the shop floor.
And there’s heaps of pressure at the coalface.
Missing the main game
Operational managers need much more flexibility and speed to react to changes with their teams, and that goes much further than the ideological IR debate.
This requires owners and CEOs to take back much more control of HR and share the responsibility with their operational managers and workers.
A recent example of this not happening was a $240,000 a year HR exec who would not support my effort to have a $400,000 manager come in on a weekend to reorganise his systems, in particular staffing, in a loss-making and increasingly ineffective business unit.
After persuasion by the HR exec, who did not believe operational managers should work on days off even in crisis, and certainly that they should not interfere with her obsolete job descriptions, the CEO simply backed off.
Such is the power of HR. Talk about missing the main game – making the business successful to provide sustainable jobs.
Instead, this potentially super growth area is flatlining in revenue and continued loss-making.
The HR exec would not have helped King Henry beat the French against overwhelming odds. He spoke directly to his foot soldiers.
Entrepreneur Andrew Stewart started with $3000 in 1979 and developed three companies from micro to medium-size businesses in publishing, online IT and construction. Two sold to public companies and one to management in 2007.