A Slippery Slope to HR Emasculation

If you don’t check what you caught, how do you know you’re using the right fishing tackle? Otto Pretorius, MD of HR consultancy QBIT looks at how self-serving technology has led to HR losing the plot.

The HR director is in a massive Catch 22. In every company, it is the people that ultimately do the work and make the money, but compared to the sales director, the financial director…even the IT director, the HR director wields very little clout in the boardroom and in many of the operation decisions of the firm. One of the key reasons is that “people” issues are often very soft issues… it’s hard to quantify value and where it lies in human resources, and it’s difficult to see cause-and-effect relationships in any but the simplest systems. But not impossible.

If HR directors can demonstrate clear business imperatives for a specific strategy, and have hard numbers to validate the choice of one gambit over another, they would be in a much stronger position. In larger companies, new HR-specific computer technologies have started to address this need for feedback of the results of an initiative back into the strategy-making, but many (if not most) organisations have gone off on the wrong tangent, and allowed technology to become part of the problem. It’s time for a rethink by those who plan to spend millions (or have already!) on large scale business process projects.
The IT manager often takes less interest in HR, preferring to oil the squeakiest wheels: the urgent demands of financial, transactional, operational and sales systems. The HR manager often takes little interest in technology and what it could do for them if they applied a strategic view to it.

This has led us to businesses where technology is mostly used by HR to automate or formalise processes, not as an information tool to help guide and validate strategic direction at board level. Most technology used today in HR is applied to process, and it’s often an unwieldy failure, because it helps create ‘process bloat’, where the automation of HR process becomes an end rather than as a means of increasing efficiency.

A completely different approach needs to be taken, where technology is used by HR to provide information feedback to justify decisions made at the thought leadership level. If you look at a three-tier model, the top tier is strategy and thought leadership at the board and senior management level. The second tier is the actual processes and technology enablement of HR. The third tier is analysis and information mining, which is fed back into the HR strategy process.

In most businesses thought leadership is based on accepted norms and assumptions, but is not rigorously validated by results. Information and execution is typically open-loop, where HR managers learn nothing about what is working or not. Nothing is left to drive process but expediency. Instead of strategy, HR process is led by the demands of the most senior managers that make the most noise to get what they want (a particular remuneration package for top sales people; a recruitment drive to solve manufacturing delays, etc).

If the thought leadership tier does not rely on results fed back by the HR technology systems, the HR practice will not be driven by sound business reasons, and the end result will almost inevitably be bloat. Processes get more complicated, using more and more complicated (and expensive) HR technology, because it gives the feeling that work is being done.
For the HR director to take back control, and be able to manage people to drive the business more effectively (rather than being the bloke other managers call when they need to recruit some new staff), the HR director needs to get technology working for them. Right now the bulk of HR technology systems are almost all applied at the middle: process.
If focus is now placed on tier three, ensuring that mechanisms are put in place to measure the effectiveness of HR strategies (churn at different salary levels, job satisfaction changes with changing policies, department profitability or customer satisfaction correlated with headcount or training in that department), then thought leadership at tier one can be based on hard information, and strategies justified in business terms. These strategies would then in turn justify processes at tier two… not allow them to be driven by the demands of a particularly obstreperous sales director.
In many cases the technology to start this rebalancing of the HR decision chain is already installed at companies: most HR technology systems already have powerful information gathering and analysis capabilities, they are just not used. System are architected to “e-enable” process, rather than to bring technology to bear on the whole HR decision-making chain. It is HR’s call to understand what the business wants from them and make it happen.

Generally the best advice for a business mired in an overly expensive and under-performing HR technology enablement project is to take a step back, and first make an investment in time and expertise to devise the HR strategy and how it meets the business’ requirements. Think through the “people stuff” first, and then only think about how to “e-enable” it. E-enabling a broken system will not fix it. E-enabling an HR strategy that feeds into processes that feeds back via information analysis gives large scale enterprise resource planning projects a fighting chance of coming in on time and within budget.