Reprinted with minor edits from Financial Times, Saturday, January 7, 2006.
The boom in the new economy industries and the service sector has brought human resources (HR) center stage. In recent years, the HR profession has captured the mind share of top management and boards. This sudden importance has come along with high expectations that are slowly exposing some shortcomings in the discipline as well as the profession. Giving vent to the undercurrents of disaffection is an article titled `Why We Hate HR’ by Keith Hammonds, deputy editor of Fast Company, which is doing the gleeful rounds among the ill-disposed.
Hammonds lambasts that “after close to 20 years of hopeful rhetoric about becoming strategic partners with a “seat on the table” where business decisions are made, most human-resources professionals aren’t nearly there.” He finds ‘Strategic HR Leadership’, the theme of a Las Vegas meet, as “a conceit” and “plain laughable”. He also believes that most of HR function would be outsourced by 2008 as nearly 94% of large employers have reported outsourcing at least one HR activity.
This article renews the controversy that raged some years ago when some had forecast that HR function would wind down in the years to come. The unfortunate lambasting that uses prejudiced language can indeed be twisted around to criticise any other function forcefully. Despite the anger that it may generate in the HR community, it must be taken as a provocation for reconstruction of human resource management (HRM) approach and content.
Many have begun to wonder if the rise in HR rhetoric is matched sufficiently with advances in robust techniques. Even as the CEOs say pompous things about the importance of human resources in annual reports, shareholder meetings, research analysts’ meets and the endless conferences, there are gnawing doubts if these match with practice at all. One is not able to reconcile the growing trends of inequities, disparities and unbridled greed with HR philosophy. Approaches to people-issues are often in direct contrast to professed HR values—they appear softened by pragmatism and finance.
As many companies reel under the stress of high employee turnover, there is suspicion that retention of people is more a function of demand and supply than HR intervention strategies. There have been concerns on the integrity of some HR professionals in the face of aggressive recruitments and connections with market intermediaries. Veterans in the field have also noticed the scientific basis of HR practice giving way to ill-fitting fashion, fad and self-serving assertions. Thus, the industrial engineering-led job evaluation systems and incentive mechanisms have slowly disappeared from HR knowledge base, favouring a market mechanism that can be justified any which way. Manpower forecasting, modeling, cost-benefit-analyses and long term plans have been given up in favour of just-in-time tactics.
Progressing from traditional personnel management, HRM held much promise as a new approach to dealing with employees and leveraging on their capabilities. Sub-sequently, when strategic HRM was adv-anced as a powerful idea in the context of competitiveness of companies, the dream was that HR can be made so unique as to give a distinctive advantage to a firm against competition. The “resource based view” held the promise that a HR professional will be able to configure ways of attracting, managing, and retaining hum-an capital uniquely than the competitors. And that such quality resources would be un-poachable and that competitors would not easily replicate the unique practices.
Despite two decades of the strategic HRM ideal, there is a lurking suspicion that the intervention of HR professionals continues to be mainly tactical to merely maintain hygiene. Some critics also wonder if HR practices of failed companies are any different from those being advocated as best practices. Perceptive people in the field also find much sleaze and snake oil being peddled as new ware, displacing the scientific basis of HR. Caught in a vortex of verbosity and dissipating scientific temper, some have taken a low-road to their own competence building.
Under these conditions, the threat of massive outsourcing of HR is not imaginary—and I had warned international congresses of HR professionals of the impending credibility crises. The immediate agenda, therefore, should be to have HR veterans, CEOs and academicians brainstorm, reconstruct and realign the core of HR before it migrates to small-time vendors for being routine fare.