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Is it Time to Break Up Human Resources?

3-4 distinct parts might be better.

Posted on July 17, 2014

Ted Bauer writes periodically for Vocoli on various HR-related issues. He just finished a Masters in Organizational Development at the University of Minnesota and writes often about these topics on his own blog as well. His views on this topic are his own (they're meant to spur thought and conversation!), and do not necessarily reflect the views of Vocoli.

For a long time now, I've been thinking that the HR setup is wrong in most mid-size to large organizations. Many who enter the human resources field tend to be (this is a generalization and does not apply to every specific person in the field by any means) process-oriented generalists, or people who are very concerned with compliance. Yet, some of those same people become recruiters in the course of their work. This makes sense from a departmental context standpoint, but makes little sense from a logical standpoint. I've always thought there should be four distinct sections of HR in an organization, and in this post I’ll outline the reasons why and what those four areas are.

Section #1 - Administrative

First, there should be a straight administrative sector of human resources to own the day to day operations of the company as well as the compliance and personnel responsibilities. Compensation and benefits, often a company’s largest expense, could fit here as well. This section would report to a COO, ultimately, as it involves the day-to-day operations of the company as well as strategic financial and resource pieces.

Section #2 - Culture

The second section would be about leadership and organizational issues, i.e. culture. This is where you'd focus on engagement, quality of life, and people's performance once they're in the organization. This section should ultimately report to the CEO.

Section #3 - Recruiting and Talent Management

The third section would be recruiting and talent strategy. I believe recruiting should be made separate from engagement/organizational health (the people who own culture) because the process of dealing with people attempting to enter and the process of dealing with those already working there is actually quite different. This section should ideally report to the CEO . A really good CEO should spend about 20 percent of his/her time thinking about and engaging in hiring, although probably only a fraction of CEOs in the entire world ever do that.

Section #4 - Data Management

The final section would tie in this whole "big data" revolution. HR houses all the people and personnel data anyway, so why not have a few analysts in there analyzing and presenting on it? Consider this: Google is currently using people analytics to essentially revolutionize HR. This section could report to the CIO.

Why This Matters

In this way, HR isn't HR anymore. Now it's four units that report up through standard, people-have-understood-these-for-years business lines. Instead of spreading HR too thin like it is right now, you focus the responsibilities on distinct initiatives and lose the whole issue of HR "not getting a seat at the table" in terms of legitimate business decisions.

Honestly, you may not call it HR. The first group is admin, the second group is perhaps something like Organizational Health, the third group is Talent Strategy, and the fourth group are Data Analysts.

Could this work? Yes. It would take people some time to get comfortable with the definitions, but the same core functions would still be happening all over -- and probably, more would.

Is this a radical approach? No doubt. But I’m not the only one to suggest it. Harvard Business Review recently contemplated a similar idea:

“Such people have inspired the solution I have in mind. It is radical, but it is grounded in practicality. My proposal is to eliminate the position of CHRO and split HR into two strands. One—we might call it HR-A (for administration)—would primarily manage compensation and benefits. It would report to the CFO, who would have to see compensation as a talent magnet, not just a major cost. The other, HR-LO (for leadership and organization), would focus on improving the people capabilities of the business and would report to the CEO.”

Is this idea semi-radical? Yes. Could it be implemented in most places? No. But...would you argue that "Human Resources" as a word/concept is mostly viewed as a positive or a negative? Probably a negative, right? So maybe a re-conceptualizing wouldn't be a bad thing.

Next week, we’ll look at some comments to this article on various social platforms / this site and add some of our own additional ideas on how potential gaps could be reconciled.

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