Link This | Email this | Blog This | Comments (0)

HR Departments: Make Your Structure Make Sense
February 3, 2008

My career so far has pretty much been split 50/50 between working on the front line in sales and on the back end in HR.  Between having walked in the shoes of both, and now running my own business, I’ve come to believe that HR departments are not being optimized because of the way they tend to be structured.   

Usually “HR” refers to things like benefits, payroll, hiring, firing, training, reviews, compensation and the like.  But I think that we missed an opportunity to better organize Human Resources as it was growing away from its roots in “Personnel.”  Back in the day, employees were considered an expense above all.  Over time though, attitudes changed as employers began to appreciate that the humans who worked for them were a resource.   Suddenly Human Resources Departments were born (or Personnel Departments were renamed) and the views attached were that employees were investments and should be treated and valued like any other asset.  But therein lies the conflict, because remnants of the old school still remain where employees are considered a liability to the extent that they are a major cost to the company.  What makes it tricky is that both are true.  So while the understanding of human resources has evolved into a sophisticated and strategic practice, its underlying structure has not kept up.
 
The best way to think about the right structure for your business is to think about the “type” of work coming out of HR and the people best suited for carry out the tasks. For the most part, the skills that individuals need to bring to the money side are not the same (in fact they are often the opposite) as those needed to do well on the warmer-fuzzier side where it’s all about interaction with people and interpersonal skills.

The good news is that it’s an easy fix.  All you have to do is take the things like benefits administration and payroll and align them with accounting because their primary implication to the company is financial and they require transactional minds to handle them best. Then, on the other hand, the people-development initiatives can make up your Human Resources Department where you'd have people who excel at building relationships, creating innovative employee programs and developing talent to support your business’s goals. 

And finally, the two worlds intersect when it comes time to evaluate performance (HR) and make compensation decisions (Finance).   It's the perfect blend of expertise to be mutually complementary and produce the best possible results for your company.

Posted by Donna Flagg on February 3, 2008 | Comments (0)