After a
career working in management, leadership and as a consultant with hundreds of
companies of all sizes, I’ve found a vast difference between those with cutting
edge, next-generation human resources departments and those trapped in the
past.
Do you know
what differentiates highly successful companies like Zappos, Google and TraderJoe’s from their competitors? They not
only have great employees, but they know how to get them, keep them, and engage
them. That’s the differentiator. The first thing Marissa Mayer did upon
becoming CEO of Yahoo was get a new HR Director. She knew the biggest
difference between Yahoo! and Google (her previous employer) was the quality of
people, and great people begin with human resources.
Whether your
company has 5,000 people or 25, I’ve observed 9 easy ways to know if you’re HR
Department is obsolete. Here they are:
1.
The head of human resources reports to the
CFO. Where do I begin? If human capital viewed has truly crucial to the
success of a business, then the head of human capital needs to report to the
CEO and not the CFO. CFOs usually have
no experience in human resources and have a tendency to judge success solely by
metrics such as ROI. If the CFO does not see standard return on investment,
they tend to dismiss, or even worse dissuade innovative human resources
functions from taking place in the organization. Forty years ago, HR reported
to the CFO. Not today.
2.
Your employee handbook is titled, “Personnel
& Policy Manual”. The term
‘personnel’ was dated in the 1980s when I entered the workforce, and now it's
really, really dated. My company reviews and writes approximately 75 to 100
employee handbooks yearly, and when we see an handbook that’s called personnel or policy manual, we know it either
hasn't been revised in decades, or more likely the culture of the company treats
employees not as talent but as widgets; it presents a management style and
corporate culture rooted in the 1950s.
3.
Your employee handbook is longer than the
United States Tax Code. In the few
years, we've seen employee handbooks as long as 175 pages long. If you need
five pages to describe all of the items an employee can’t wear according to
your dress code, you're probably doing it wrong, and you're definitely
obsolete. I once had a CEO ask me to put a policy in his handbook prohibiting
all former employees from ever re-applying for a job at his company. When I
asked him why, he mentioned a former, fairly incompetent employee who wanted to
come back. The CEO wanted to make sure there was a policy prohibiting that from
happening. You don't need a policy for that, you need courageous management.
What would happen if a terrific employee is forced to leave your company, due,
for example, to a relocation of their spouse? Then after two years, the
employee wanted to come back? Now you
have a policy prohibiting that great employee from ever coming back. Be
courageous. Make decisions. Understand you can’t have a policy for every
conceivable circumstance; that’s what managers and leaders are for.
4.
HR spends more than 50% of their time on
compliance and benefits management. In many small and medium-size companies
we work with, the “director of human resources” is little more than an
administrator making sure that benefits paperwork is completed and that nobody
breaks rules. Not only is your HR
department obsolete, you’re not getting enough ROI. I can find you a terrific HR Management
System that can perform most of the benefits management stuff that person does
at a quarter of the cost. Then, the
focus needs to be on doing things you ought to do, in terms of talent
development and management. For if you
do things you ought to, you’ll spend
far less time doing things you have
to do. If employees feel they’re treated well, fairly compensated, and that
management has their back, they are far less likely to file grievances or
lawsuits. And they are far more likely to stay with your company and perform at
a highly engaged level, which is usually the differentiator between an average
performance company and a great performance company. Ask yourself: does your HR
department spend over half their time doing things they have to do? And do they know the things they ought to do?
5.
None of your executives have heard of the term
“talent management". Talent management, or workforce development, or a
variation of the above is now the preferred sobriquet for human resources, a
term which replaced personnel years ago. These new terms demonstrate a desire
by CEOs and executives who visibly appreciate and support great employees, from
acquiring, developing, mentoring to promoting and retaining that talent. Human resources is no longer the “bad guy”,
they're the force that can drive the company to greatness. Take a look at job
postings online. I recently saw a job title for a hospital called “Director of
Compliance and Personnel”. Who would
want to work for a company like that? More and more companies are going to
terms like “Vice President of Talent Management” or “Director of People &
Culture”. It may be only a title, but
they reflect a desire to create a workplace culture that values their biggest
expense – employees .
6.
“That's the way we've always done it.”
When my consultants or I go into a business for the first time and make observations
or recommendations, we often hear a CEO or the HR person say, “Well, that's the
way we've always done it”. We then know
the HR department is obsolete. You can
either embrace change or die resisting change.
There will be 1 billion people entering the global workforce in the next
7 years. You can bet none of them want
to hear “that’s the way we’ve always done it” from their executives. Do you think highly successful companies get
to where they are by saying that's the way we've always done it? In an era
where businesses either reinvent themselves or not, “that's the way we've
always done it” is a ticket to obsolescence or worse, extinction.
7.
HR is considered a cost center and not an
asset. This often goes hand-in-hand with #1. Today’s savvy CEOs know that cutting-edge
human resources techniques save companies money and create higher productivity
and not the opposite. Millenials, for
example insist upon training and development in a potential employer. If they get that development, they stay with
the company. The staggering cost of
employee turnover(which will become more problematic as the economy improves
and more jobs are created) is one of the most obvious ways human resources can
save the company money by recommending and implementing techniques to improve
talent selection, retention and development.
8.
It's been over three years since your executives
taken leadership training. I promise, if you have a manager who is been
their position for over 10 years, then the techniques and style they use to
lead people are completely obsolete. The nature of leadership and management of
people has undergone a sea change in the past decade and will continue to
evolve as we become more even diverse and more global. We now have four
generations in the workplace for the first time in our history. Do you really
think that somebody who was leading people 15 years ago has the skill set today
to take you to the next level tomorrow?
9.
Employees feel no one is listening to them.
In every employee survey I've ever conducted or reviewed, the number one
complaint of employees is “I don't get enough feedback from my boss” and “I
don't have an opportunity to voice my concerns candidly”. We have a client who
still uses suggestion boxes. The concept of the suggestion box is okay, but
today’s leaders, managers, line supervisors, and even the CEO should be a
Walking Talking Suggestion Box.
Corporate cultures that are cutting-edge understand leaders are
proactively soliciting candid feedback, and that the days of a lonely suggestion
box are over. When employees feel that their opinions are valued, that their
voices are heard, and that their jobs have meaning, they become engaged, happy
and successful.
In every
business, the way of leadership has changed. Businesses will have to re-invent
themselves over and over again to keep up with the speed of change. Unfortunately, HR seems to be the group to be
involved with that change. Whether it’s because executives feel that HR is a
nuisance and not an asset or because of “that’s the way we've always done it”,
it is essential that HR have a seat at the table – that they are valued at a
level of the CFO, CTO, or COO.
The next
generation of human resources requires a relentless focus on talent development
in a global workforce; the ability to identify, develop and promote
next-generation leaders. And, most
importantly, it means doing what you ought to do, not what you have to do.