If HR Wants to Be Strategic, We Have to Let Go of Something Else
JULY 14, 2021
Have you ever thought about the complexity of the field of Human Resources? I'm not sure there is another field with as many variables, requiring such diverse skills, with so much at risk.
HR pros have to be organizational psychologists, systems thinkers, legal gurus, insightful advisors, data geeks, motivational theorists, performance consultants, developers of people, business analysts, and, if benefits are involved, accountants. That's a pretty big charge!
There's an upside and a downside to this. The upside is that HR has, or should have, a 30,000-foot view of the behavioral strengths and weaknesses of the organization, and can create an infrastructure to shape behavior.
The downside: It's really hard to meet all of these competing demands and needs at once.
When Business Strategy Gets Neglected
Some elements of HR require an understanding of human nature and the ability to apply systems thinking in a way that propels the performance and productivity of the workforce forward. Other elements of HR require exceptional diligence, accuracy, and a deep knowledge of program administration. This latter work must take precedence—the risk associated with poor regulation or failed compliance standards is just too great.
But over my many years as an HR executive, I've found that taking care of the "must-do" regulatory work leaves little time to do the "strategic" work of actually helping the workforce generate better business results.
For example, the administration of employee benefits is a huge usurper of time: you're dealing with brokers, preparing for and running the benefits administration committee, running scenarios, maintaining and auditing records, and responding to myriad questions from just about everyone.
Don't get me wrong—benefits are important. But does it truly make the most sense for benefits to fall under HR? Could this be an area where HR cedes oversight to another part of the organization and frees up time to focus on human performance improvement?
Breaking Down Benefits
Of course, HR cannot completely abdicate their role in defining and developing employee benefits, because benefits are one of the most important elements of the "attract and retain" workforce strategy. HR has critical information about employee expectations, and understands the latest innovations in benefit programs, regulatory requirements and profile of the workforce.
But I think it's a question worth discussing—and it starts with an agreement on the importance of HR's role in improving human performance, and the time required to do that well. Most HR executives are already engaging the finance department in the decision-making process and financial analysis. Could finance do even more?
There may be a way to dissect the complexity of benefits, and relieve HR of some of the highly administrative work.
Finding a 'People' Partner in Finance
Another similar area to benefits is payroll. In my first HR job in the retail industry, payroll was a finance role. They believed (quite firmly) in the separation of power: HR inputs salaries, finance cuts the check. A move to financial services changed that paradigm for me as payroll was a department reporting in to HR. When I started working in healthcare HR? Payroll was back in finance's hands.
If Payroll can successfully be part of the finance department, why can't benefits administration be too? Both require access to confidential employee data, which is typically housed in a combination of payroll and HR information systems.
Benefits and payroll require a strong understanding of the industry and tools, statistical knowhow and accounting skills, and an excellent command of the ever-changing regulatory environments.
So, I'll leave it open for discussion: Could there be a collaborative hand-off, requiring a partnership between HR and Finance? Could HR finally dig out from under the administration overload, and truly focus on strategic talent management?
Photo: Creative Commons
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