Nigel Cassidy: What's the point of HR, is it time for a change to make its purpose better known and understood? I'm Nigel Cassidy and this is the CIPD podcast.
Not for the first time. The role that HR plays in organisations has been in the news, recently it was the Octopus Energy chief Greg Jackson who brought things to a head when he said, human resource departments don't make staff happier or more productive, so his billion-pound energy company doesn't have one. So, one moment people professionals get applauded for going beyond employment form filling and compliance to make the workplace better, but then they get it in the neck for what's seen as mission creep into public agenda crusading on equality wellbeing or other topics. So, what should HR really encompass and what's the right way for it to evolve? We've three top guests to get to grips with this one, firstly from Henley Business School we welcome Associate Professor Dr Washika Haak-Saheem who came to academia bringing a wealth of management experience with international businesses. Hello.
Washika Haak-Saheem: Hello Nigel.
NC: It's a welcome return to the podcast for the CIPDs Membership Director David D'Souza. Hi.
David D'Souza: Hello.
NC: But first to a business change specialist who has some, sometimes controversial, views on HR. She's certainly challenged the need for it to be always run inhouse, she's Kat Navarro. Hello.
Kat Navarro: Hi Nigel.
NC: So, Kat, come on, give it to us straight, reading your posts you've often found inhouse HR departments slightly getting in the way of the job you do when you go into an organisation. So OK, what's wrong with HR in your view, to the point where, as we've heard, some leaders are actually making a thing about trying to get rid of it?
KN: That's right. Look I, I think there's actually two things that I would say is possibly wrong with HR as we know it today and one of those is about the history and the setup of it and the other is about the focus. So, if we think about history and setup, HR was created a really long time ago when the workplace was very, very different. People stayed in one job for a long time and HR was there to ensure contracts got created, people got paid, companies were compliant, and today the workplace is hugely different, mostly due to the booming dot coms and technology. You've got more companies than ever before, meaning more competition, it's harder to hire and retain talent. You've got greater demands on individuals because they're needing to innovate and create faster than ever before. Knowledge is much more accessible, so you've got, which is great because you've got topics like mental health and diversity and inclusion, which are at the forefront of everyone's mind, but it also means that people have this growth mindset and they're learning independently and they're expecting so much more from employers. So suddenly it's not just a need for personnel admin and ensuring that employment law is adhered to, there's also a need to ensure that people are being sourced and hired and engaged and developed and retained well. And the issue we have is that some companies lumped all of that together. So, they thought, great, well we have a team that looks after people related things and we have all these new people needs, so let's put them all together. Which to me is a mistake because they're fundamentally different things. So adherence to employment law is a very, very specialist field and, to me, it needs to remain 100% objective and separate from the day to day running of the business, in the sense that those that are there to give guidance on that, shouldn't necessarily become friends with other employees and it does need to be kept quite separate, to the point where I would argue that it's actually a lot better to outsource that to specialists so that it can remain so impartial. Whereas the talent engagement side, how we hire and engage and develop talent, to me this is the exact opposite, it needs to be fully embedded within the workplace because it's about the hearts and minds of individuals.
NC: Do you mean not done by HR at all?
KN: I mean it's done by different people, call it what you will, but it needs to be done by very different specialists. And if you try and merge the two and have one individual trying to be impartial, objective and ensure that the business is complying with the laws of employment and then you have that same person trying to win the hearts and minds of managers and individuals and trying to help engage and retain and develop talent, naturally going to see a conflict.
NC: All right, well there's a lot there and perhaps we can unpack some of the detail in a few moments, but just looking broadly at this reaction against HR and I wonder whether it's got anything to do with that massive growth like topsy that you've described. David D'Souza, what do you see as the reasons for these media attacks and in particular, organisations like Octopus wanting to publicly say they've done away with the HR function altogether, even if well maybe they haven't entirely?
DDS: So I think there's a few interesting things going on, just following from Kat, so there's a question around what you're trying to achieve. So, what are you trying to enable in organisations and what are you trying to deliver? And then there's a question around how the resources of the organisation are set up and organised to deliver that. And if you look at some of the organisations saying they don't have HR, in fact what they've got is a different delivery method for that, or they have a disaggregation of some of those parts of the function. At the CIPD, we talk about nine different specialisms that go up to make the people profession as a whole. And actually you can deliver some of those in very different ways and you can organise and collate or disaggregate them in different ways as well.
NC: I was just amused to see the piece, you described something as, Schrödinger's HR, what did you mean by that?
DDS: Well yeah, Schrödinger's HR for me is the fact that there are some organisations that both claim to not have HR and have all of the HR capabilities at the same time. So I think it's quite attractive and it seems quite progressive, or disruptive, to say that you don't have it, but actually there a number of reasons that those capabilities are core to both growing organisations and established organisations. Sometimes it's about what you call them, sometimes it's about how you organise them, sometimes it's whether actually some of those, to Kat's point, are done external to the organisation. So, you might outsource some elements of it, or work in partnership. But the key is, they do tend to exist because they do tend to be needed. So what you're looking at is the requirement and then working out the best way to fulfil that. And that may change by sector, it might change by stage of growth and maturity of the organisation, but generally getting people in a legal way, making sure that you're dealing with them effectively, helping them and enabling them to grow and do their jobs exceptionally and having those things join up in a sensible way, so you don't end up with policies that are getting in the way of some of the other things you'd like to do. It's a sensible thing for any organisation that wants to succeed to do, the challenge is how are you best organise, how you best shape, how you best resource to do that.
NC: So Washika Haak-Saheem, if that's true then where have things gone slightly wrong, so that you do have these rather persistent stories about people wanting to get rid of a department, which one would've thought could serve the organisation in the ways that we've heard from David?
WHS: I would start with the HR by itself, as Kat was rightly saying, businesses evolve. Unfortunately, many HR functions could not maintain the same pace of development and direction. Today we, still when we talk about HR, we still think about this paper pushing function which is very much considered with filling the forms and making sure that everything is correctly recorded. My view would be that, many of these functions could be outsourced, such as payroll, for me, it doesn't make sense to maintain payroll in house, but well HR makes great sense. And I believe the pandemic was a great eye opener. When it comes to the human factor in an organisation we need to build HR capabilities around, how could people contribute, add value, to the bottom line to the organisation. We can call it engagement, we can talk about strategic alignment, we can talk about who is delivering HR in an organisation. It is, it depends on organisations, it depends on the size of the organisation, for example when we compare HR capabilities in small medium enterprises to large multinationals, they look very, very different and there is a reason why they look different. But having said this, I think it is high time for HR to step out and to step up and make sure that they are known as a function. It could be a single individual, it could be, I work with Emirates Airlines for example here in Dubai at the moment, they have an HR department of 5,000 people.
NC: Wow.
WHS: It depends on the organisation by itself. But a bottom line is, it is a good time for HR, it's the right time for HR to step up
NC: Kat Navarro do you agree with that?
KN: I do, and it's actually a nice segue to what I see as the second issue and I think, why these teams are struggling so much. So if you are in a people team, HR team, talent team, whatever it's called, ask yourself this, who is it that you are trying to serve? Are you serving the employee or are you serving the manager? And I think it's a really interesting question, because I believe successful teams are the ones that focus on managers. It is the manager's role to attract, to hire, to engage, to develop, to retain talent, but they obviously can't do this without help. Much like if we want abs of steel, we hire a personal trainer, if we want perspective on our life, we bring on a therapist or a coach. You need a team who is there to partner with managers and help them achieve this, and ensure that it's done at a consistently high standard and that it's on brand, for the company but there are many teams that make the mistake of trying to ultimately manage staff themselves and that's where it leads to conflict. And I see this happening a lot. You see people teams, or HR teams, trying to take on training of staff, solving their problems, being the go-to for any issue in the workplace and in turn you see people going to them with those things, and all you're doing there is, you're stunting the growth of the manager. You're putting a wedge in the relationship between employee and their manager. You're causing tensions with the manager and you're stopping the company being able to scale, because there's ineffective managers who aren't able to do the job that they need to do for the company to be successful.
NC: I just want to take that up immediately with David D'Souza, does that not reduce the people, managers or the HR people, whatever you want to call it, to a kind of advisor to the managers, that's a slightly different vision of human resources when it works well, isn't it David?
DDS: I don't think it's wholly different for many organisations. I think the criticality of the line manager is clear, that's some of the day to day interaction happens there. I think HR and people profession more broadly, they're critical enabling functions. It's hard to do the work without them well, but actually you should be educating and supporting others to do them, we don't need to be the heart of that work and in fact it's almost impossible to do the heart of some of that work.
NC: And while I'm with you David, also this question of whether the human resources person is working for the manager, or has some special responsibility towards the staff, we were getting pretty clear message from Kat that they are working for the bosses basically.
DDS: Well, I think if you look at why an organisation would have a function like this. So if you step back a bit and think of it from the ultimate view, it's to do all of the things that Kat described, it's to do that range of activities, at times most of the time it's to the benefit of the organisation to treat people well, there will be occasions where actually there's a function that needs to do something that people wouldn't like. So, if you look at a redundancy situation, it may be absolutely necessary for the organisation to do it, no person would ever want to be in that position, but you need someone at that point. And this is where I think there's a slight distinction, you need that someone at that point, not just to run a process, but to help people through a process. And that's where the congruence with culture comes in, that even the things that are technical requirements, there are different ways of delivering them with compassion, with heart, with dignity, and that's why it's really important that actually, there's an overview as an organisation, of what you want that experience to be at every point in their value chain, or life cycle of the employee. And that's why I think it's imperative that these things are, even if they are slightly spread apart, even if you are outsourcing something, the cultural piece that sits at the heart of it, the employee will always associate that with you, when they've been treated well, whether they're treating badly you can't go, well that's not a bit we do, that is their experience in and of and given by you. And that's what's really important that, one it's joined up, two that it's congruent and consistent, but three that great care is taken with every single bit, because you only need one part not to stack up and people go, actually it doesn't quite feel right here.
NC: Yes, I absolutely get that. And talking about the different things that um people managers deliver, that HR has within its brief, I mentioned at the start this mission creep which is often singled out in the press, one of the things that seems to wind up its critics, for what it's worth we commissioned a poll in the CIPD's newsletter, we asked if people teams should respond to concerns about things like climate change, poverty, tackling racism, 52% said yes, 40% said no. So fairly evenly divided, some scepticism about that mission, Kat Navarro where do you stand on that?
KN: Like, as I said, the world is changing so much and there's so many and because we're consuming all this knowledge and we're exposed to it, it's naturally on the forefront of everyone's mind. And I do think these talent teams, people teams, have a responsibility to bring all that together and collectively say, work with senior managers of a business to decide, how are we going to address these things? But like any business objective, it comes down to prioritising some of them. Now that doesn't mean, do we prioritise profitability over people related topics? It means which of the topics can we tackle right now, that concern the wellbeing of our staff and partnering with managers to understand, this is how collectively we are going to do this as a business. And this is why I'm a big believer in thinking that actually, you do need these talent teams within a business, because they are the ones that are championing, what is, what's going to be on the agenda and working with the managers on how we actually bring this to life and embed it within the business. But it's not done by the talent team going out and doing that independently, it's done by educating managers, it's done by working out how to actually embed that within each distinct team in the business.
NC: So, this talent team you talk about, are they within human resources or are they essentially part of the management?
KN: Well, that's an interesting question. In my opinion they are a distinct team but, as I've said, their role is to partner with the manager, much in the same way that you would have a business coach. And this is the challenge, because I think some companies don't hire people in the role who are able to coach and advise and influence managers, but that is the skill that is needed for people within that team. Which to me is different from what is more typically known as HR and David used the example of a redundancy, and I think that's a really sort of nice example to use, not redundancy as in and of themselves, but the scenario. So when I've led redundancies, I would rely on my HR, the team that are specialists in understanding proper process, diligence, compliance, fairness and they will advise on how to do things. And then I've relied on this talent team to work with managers on how do you deliver this message, that's both compliant but has warmth and has humility and how do you then deal with the consequences of that? And this is a really nice example of how it's done, but to me why it's important that they're completely different teams. I'd put that in that HR team, more within, if it's not outsourced I'd be putting them within the legal and compliance teams.
NC: Washika lots of points to take up there.
WHS: I would disagree with this distinction between, whom does HR advise and support? Is it management or employee? In ideal case it's both. And then, coming back to what I wanted to say, David said it already, it's about delivering even the uncomfortable, unpleasant messages, but just what Kat was saying about the differentiation between HR and talent, this is a whole debate that's going on in academia, what is now talent management? Because to be very bold and frank, nobody really knows, still we have a lot of unanswered questions. But dividing HR in this technical and the more soft approach Kat was saying HR and talent management is nothing really new. We know about this for the past 30, 40 years, because we know that there is a hard approach in the field of HR and there is the soft approach as well. And what HR did over the course of the three decades is really to bring it together as close as possible, how could we merge this more technical expertise, with the soft skills of HR as well? And this is where we are at the moment and a lot of organisations get it really right and correct and, as I said, we need to elevate, we need to move forward within the profession as well. But again, the role of line managers and HR functions, nothing new as well, Dave Lowry from Michigan State University was talking about it for the past 20 years. And the forecast was, more and more responsibilities will be pushed towards line managers and this is exactly what happened, but HR managers, or line managers, are not equipped with the skills and competencies they need to deliver HR, or people management practices, or strategies. In my view we need a more decentralised HR function in support of line managers, because line managers are delivering on a day to day basis HR experiences, or employee experiences. But everything what was said up to now, it's not really new. We know it, we discussed it, we are fully aware of these distinctions, but the effort was always how to bring it together and not to divide it further.
NC: And talking of trying to bring people together, David have you any thoughts about how you can bring people together and not get bogged down on these structures, but get HR working in a better way for the benefit of the organisation as a whole?
DDS: So, I think it's highly contextual. And what I mean by that is, we're supposed to be the experts in helping organisations design structures and ways of working flows and understanding how people work best together. But actually, we need to turn that light on ourselves at times and think about the needs of the organisation at that phase and its growth or in the sector that it's in and the challenges that it's facing. And that's, historically would've been seen as an organisational development and design issue, how do you get the culture and the resources of the organisation set up to meet the external challenges? I think to Kat's point, it's very much in that space, but it is possible to have structures that are wildly different but work for their unique context. And that's where I think we need to keep pushing the agenda, so that we're not static, we're changing to the meeting needs, not just to the outside world but of different organisations. So, we saw in the pandemic, certainly in the UK, about 50% of people could work from home and about 50% of people still needed to go to their place of work. That means that actually thinking about things from the lens of a tech organisation for instance doesn’t work, we need to think about the unique situation the organisation’s in and design to and for that. And whether we call that OD, whether organisations looking at it in terms of people development, employee experience, or talent, however we label it, I think the job at hand is relatively consistent, how do you support the organisation best? In some organisations that might be supporting line managers more, in other organisations it might be appreciating that there are some things that they’re going to need less help with over time, to ensure that they’re building up the muscles to be able to deal with that.
NC: I wonder whether Kat or Washika in turn can give us any ideas from their own experience of how they’ve tried to solve this and get people managers working better in the business.
WHS: I personally worked with a couple of organisations where exactly this was the question on the table, how to move forward. And I can proudly say that there are some really successful examples where responsibilities people management. I’m talking less about HR technicalities like compliance, or governance, more about people management was pushed onto line managers, but at the same time there was a very active dynamic HR capabilities in an organisation. You can call it whatever you like, but important is what David was saying in the beginning, that you have these capabilities inhouse and these capabilities were available to line managers, to access to whenever there was a question. I think this could be one of the solutions. Another could be, to develop HR or help people managers to grow into the role of architects. What does it mean, that they will build networks, networks across the organisation where you really foster collaboration between line managers, employees, departments, so you really try to get rid of the silos and then it’s not just internally. I think the next step for HR would be as well and I think Kat would hopefully agree with me, to connect with the outside external environment as well and to bring talent, to connect with talent or with expertise even outside of the organisation. And this is something I believe a lot of HR professionals work right now on it, how to make these, this connection happen, how to build this network of different contributors and the aim is, as David was saying, to help businesses to grow and to remain competitive.
NC: Kat, does any of that resonate with you?
KN: Yeah. Well actually, Nigel, I was going to answer your earlier question. What's interesting is I've worked with about two organisations that did not have, call it HR, talent, whatever you want to call it, but didn't have those teams and we made a conscious decision for that to happen. And that was to really up level managers, suddenly it became very, very clear that their role was to attract candidates, to hire well, to make sure that they were high performing, to keep them engaged, to keep them retained. And we made a strong message to say your role is to manage, therefore we are not going to put people in this role who are the top performers in the team and therefore, you're a top performer we're going to promote you into manager, we're going to put the people that are capable of doing the role into the management role. And that really opened the eyes to everyone, because suddenly people were like, gosh, like managing is hard, managing is a full time role. And then what happened is, once that culture was embedded, we actually did start to bring in some talent professionals into the business and it was received so openly and with such open arms, because it was suddenly like you know what, I need a coach, I need someone to partner me and help me, someone I can have a sparring partner with who can actually help me do this and do it better, but I'm not going to delegate my responsibility to you, it is my responsibility, but I want to be pushed and inspired to do it better. And I think that's a really interesting way for businesses to look at it.
NC: David do you think one of the lessons from this discussion is that perhaps people managers could be better at both understanding the value they can bring to a business and so then spending time giving that message to people at every level of the organisation?
DDS: So, there's an awful lot that lands on the shoulders of people managers in businesses and not all businesses are able to have that model that Kat described, where there's a clear separation between technical skills and day to day requirement, and the building of a team over a length of time. It is absolutely critical that the people fresh in HR gets better at supporting managers dependent on their context. We're doing a lot more guidance for line managers because actually even if you think about it from the other side, when things go terribly wrong, HR teams can it don't go brilliant, excellent, more work. They would've preferred people managers to be more expert in the time and avoided situations coming about. And actually the job's a lot easier as well if they're developing their people through and you've got a talent pipeline coming through the organisation and clear view of it. So, everyone should be pulling in the same direction, the balance of responsibilities between those two groups we just need to be really careful with. So there was a really interesting piece done by Leanne Judge a few years ago where she compared the expectations maybe the HR function ten or 20 years ago to what they are now and there's a range of things from counsellor to coach to legal expert, right the way through. Wellbeing, an idea we've seen absolutely shoot up the agenda now as well. If you want that range of complexity dealt with, it's very hard to do all of that in a systemic way through line management populations. That doesn't mean they're not critical but it does mean the support to them is critical and the understanding of how that complex system fits together is also critical.
NC: Great and Washika I'd just like to go back to that story that Kat was telling us a moment ago, this novel idea of managers doing managing, this is still only aspirational for many, isn't it?
WHS: I would go back and look at the educational background of those managers. Those managers are in those specific roles because they bring some technical expertise to the role. They are not necessarily educated in people management and looking back at my work now at Henley Business School where I'm responsible for a number of modules at the MBA and executive MBA level, those managers are coming to us and then we are delivering these modules which is called people management and they're fascinated, because they know that this is part of the job as well, but at the same time they're not very comfortable of doing it, because they lack the expertise. And I think moving forward it's, again, it's nothing really new here, we have these discussions now for the past, for sure two decades, on how could line managers take over people management responsibilities. But I think on the educational side, we need to make some changes.
NC: OK. And David D'Souza, just trying to bring this discussion to some conclusion, change is nothing new in the profession, since the pandemic we know it's happened at breakneck speed, hasn't it? And as we saw at the CIPD Festival of Work, outsourcing solutions, new Wizzy Technology, it was all there and I wonder whether we should see all this as a new call for the profession to look at how it should best respond to changing needs to the global context, all this stuff that's going on. Maybe even delivering a bit of a riposte to its critics along the way.
DDS: So, I think the profession will always be undervalued because it’s easier to point out when it’s going wrong and it’s more attractive to point out when it’s going wrong than when it’s doing a great job. What I would say is, part of the job is constantly reinventing the, our proposition to make sure it’s meeting the needs of organisations. So, and that involves looking at structures, that involves looking at technologies, but keeping at the centre of it, the importance of the work and the essential role that it plays for organisations. We can discuss and we should discuss different methods of delivery and different long term ambitions, but at the CIPD we talk about championing better working, working lives, fundamentally believing that work can be better for millions, if not billions of people. That’s the problem we’re trying to solve, there may be different ways of doing it and we should look at all of those options as we go along.
NC: OK. So good thought to end on from you. Kat Navarro from your own experience, do people managers, human resources people have anything to fear from this change we are hearing about?
KN: I think we should always be thinking we have something to fear because we should always be uplevelling ourselves. So absolutely. I think we all have to up our game managers and talent teams alike. It’s not enough to just be doing the tasks that we’re comfortable with. We need to be looking at how we can make, we talked earlier about how this is, this discussion has been happening for 20 years, I actually feel that the fact that we’re having this discussion and we’ve been having it for 20 years is a really big concern to me. The fact that we’re saying that we’ve got managers where this might be uncomfortable for them, frankly to me that’s not good enough. I actually think if you’re going to be in the role of a manager, you have to do the role of a manager. And therefore what we need from people in these talent teams, are people that have the expertise and the specialism to be able to advise and coach managers on how to do this better. So, they almost have to be super managers in order to be able to coach other managers. So, is uplevelling required? Yeah. And should people be fearful that maybe they need to upskill themselves? Then yes. But is that a bad thing? I don't think so.
NC: So Washika, pretty blunt from Kat then, the fear factor keeping us on our toes.
WHS: I agree. I agree 100%, because this brings HR again into the position, all right what can we do next? Because doing the same thing over a long period of time, this is not fun, but I think it's a good time for HR professionals to really redefine and reinvent themselves and their contributions to the organisation, absolutely. Fear? I wouldn't say fear, but it's more about being aware and being prepared and, yeah, developing a resilient to respond to what's coming next.
NC: Well, what a brilliant eye-opening discussion this has been and we've touched on a lot of things people professionals almost dare not think about as they go about their daily duties. What have we learnt? Well, if the question is do we need an HR team, the response surely has to be, how can we find better ways to support and value the people function to have the impact that we want? Our grateful thanks to Kat Navarro, Washika Haak-Saheem and David D'Souza. If you've not heard it yet, do check out our last bonus podcast which we recorded live at the Festival of Work at London's Olympia. It was great to meet some of you there. Meanwhile, please subscribe to the CIPD podcast so you don't miss out. From me, Nigel Cassidy, until next time, it's goodbye.
