Copyright © 2001 by Ethan A. Winning
With some people, wisdom comes with age; with others, age comes alone.
[January 9, 2001: A slight modification had to be made to this article after the withdrawal of Linda Chavez's nomination for Secretary of Labor.]
[January 9, 2008: More modifications should have been made seven years ago with the appointment of Elaine Chao as Secretary of Labor, perhaps the worst Secretary of Labor since the position was established in 1933.]
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Note: What follows are thoughts that came as a reaction to a number of my peers who have taken me to task for being old fashioned, of not being "with it," and of being negative just because of the failure of a few dot-coms and some high tech companies (not to mention troubles in pharmaceuticals, automobiles, and a few others). I have also been berated because I do indeed hearken to the old days, days when what was known as "personnel" was a broader discipline than today's Human Resources.
So, if you don't want to hear about what else we used to do and should be doing today, namely, accounting, some finance, and all other management functions rather than "just" recruiting, retention, and keeping people happy, do not read on. But if you want to read about what can (and perhaps should be) outsourced, and why the emphasis on Hr management should be on management, here's my opinion. As usual, it's free, so what have you to lose?
Jan. 3, 2001. I just got back from a luncheon meeting where I was the guest speaker. The topic was where HR's future lay but, from what I heard from the participants, perhaps the meeting should have started yesterday with a topic of where HR has been or perhaps, is HR a has been? I think what surprised me most is how few participants knew anything about HR prior to 1985, and there were quite a few who thought that HR/Personnel started in the 1980s. Whatever preceded had only to do with insurance benefits and other "administrative" stuff, of little value to employees or employers.
New flash(es): 1. Personnel has been around in similar guise to today (minus corporate baby and pet sitting) since the early 1920s. 2. Although personnel was a kind of employee advocate, it held the much more difficult function of balancing corporate and employee needs and, in nonunion companies, meeting both needs while keeping the company nonunion. 3. In the late 1960s, personnel focused on compliance issues, to a great extent brought about by Affirmative Action, Title VII, and Executive Order dictates. Policies and procedure manuals were written internally and specifically for the company. Few went outside the company to see if there was a handbook that could be used internally. 4. Personnel became a true management function, often an advisory function to senior management and certainly, in smaller companies, the management advisor to the president or other senior managers. At the same time, in many company, Personnel became the stepping stone for a career in the senior most positions in companies.
As I explained this to the participants, I could tell that many didn't believe me. I am not bothered by those in HR who think that 1985 was the demarcation point between pencil pushing personnel and HR, but I am concerned that these are the same people who ask the questions, "What should we call our employees?" or "Other than stock options, signing bonuses, and child care, can you think of anything else to retain employees?"
HR is not or should not be the employee's advocate. It should assist employees in meeting objectives and living up to the "psychological contract." It should provide for training. It should provide guidance. It should even help employees complete insurance and tax forms, and it should do all of these things in much smaller companies (under 60 employees) because much of these activities (not functions) are outsourced.
There are two parts of the new vernacular that drive me nuts: (1) It was so fun. What happened to the word "much?" And, (2) "I have been tasked with..." Well, the truth of the matter is that if you've been tasked, you are not a full-fledged HR manager. The HR manager is an advisor, meaning that not only does s/he have to know the basics of HR, but more than the basics of management, i.e., planning, organizing, directing and controlling.
With due apologies, many HR managers and personnel are naive, perhaps because they have led such sheltered lives during the economic boom of the past five to seven years. Those of us who went through the recession of '91, '87, or the potato famine of 1840 know better than to think that these good times would last forever. More important, there are those who could see the signs of slowdowns, of the fact that bringing pets to work, boarding pets for employees, paying for day care in a 20-person company, buying every person in the company an $800 ergonomic chair, etc. would some day come back to haunt them ... financially if not in other ways (see article on "Loyalty in 2000").
[I'm harping on the pets at work which I have always thought was a dumb idea -- for everyone else -- because on January 2, 2001, five of the largest companies who espoused such niceties banned pets from work. Something about fleas, hairballs, and kennel cough -- and that was just the employees.]
I have now been in HR and Personnel for 34 years. I have conducted skills training and management development courses; I have been tasked with the United Fund campaign; I have managed the benefits section of an HR department and I've managed "full-service" HR Departments. But as far back as 1970, I was a Personnel Manager/Internal Management Consultant (my actual title). And, my responsibilities? Primarily to help other managers with everything from career path planning to compliance to preventing and solving employee problems. When it came to employees with problems, I might have provided a sounding board, but primarily that belong to their immediate supervisors. My job was to advise managers all the way up to Executive Vice President.
There were two other areas that we knew about (and were trained in): compensation and costs, and we knew that a new employee cost us 34-38% of his or her annual salary in benefits. That meant that a person making $30,000 a year had to produce a minimum of $45,560 in returns just for the company to break even. Staffing was never done helter-skelter. In fact, it's one of the functions that led to my design of the "Personnel Requisition Form" which required every manager requesting staff to justify the addition or replacement and tell us how much this was going to cost. We also set budgets, something I don't hear about much in today's businesses, let alone HR departments.
Think it doesn't "fit" today? Well, perhaps you're right. I've had a few (mostly high tech) know-it-alls. I advised one now defunct, i.e., belly up, client who would not take my advice about not moving from a $4.25 square foot office space in Texas to a $45 a square foot office space in Palo Alto, CA. The president said, "Let's not go there." To which I replied, "Exactly!" He didn't get it. He may not get it now, a year later. He also did not understand when I told him that he couldn't afford signing bonuses, and that they wouldn't gain any more loyalty than the promise of growth and survival. Instead, he was intent on stock options, worth less even 12 months ago than AOL disks that used to come in the mail five times a week.
Okay, so every once in a while, the client (your president) shoots the messenger. It comes with the territory. Always has. In olden days, we called it "politicks." Win some, lose some. When we lost some, it was career development since we often had to switch companies.
Even in the old days, HR Managers were not the cruise directors that many are today. Picnics, company functions, pool parties, buying foosball games, whatever. Keep the employee happy or, if you can't keep them happy, retain them through motivational techniques that have never worked. Call employees "Associates." More important, spend a year or so trying to figure out what to call the HR Manager. Sorry, but the silliest one so far is "Chief People Officer" which became sillier when a recruiter was titled, "People Purveyor." In some cities, they're known as hookers but, as my Chapter 7 client would say, "Let's not go there."
Truth be told, we were much more broadly educated and trained in the old days. Even those of us coming out of "liberal arts" backgrounds took courses in accounting, management, and other business areas. HR would be better off and better prepared today if the HR managers were more broadly trained, better able to manage "crises," and less concerned with semantics and one aspect of HR rather than the five or six that exist.
I can't recall ever trying to redefine myself or my title ... or anyone else's in Personnel. Oh, yes, there were times and many meetings when we had to come up with a reason for being. Thanks to the federal government, almost as soon as a senior manager would ask, "Why do we have a Personnel Department?", the federal government would pass another convoluted law that only the convoluted to figure out. Civil Rights, AAPs, EEO-1, ADA, FMLA, and now the OSHA ergonomic standards. (Before you go off halfcocked, there is some hope that the new administration will hold off on much of the provisions of this new raison d'être. And, before you get fully embroiled, engulfed, or enticed into any AAP, the new Secretary of Labor, Linda Chavez, is a known "enemy" of Affirmative Action. I don't care about AA, but If only she disliked the EEOC... One can hope.*)
What I'm telling you is that HR's future is in the past. Before you can run... Well, get some solid foundation to what you see as the HR function. It is not simply a series of tasks. It is an advisory function based upon knowledge that you've gained from doing everything from the mundane to that which contributes to the profitability of the company. If you do not contribute, you may well suffer the same fate as others. You are a knowledge worker, and that assumes that you have the knowledge that is needed and desired in the company. If you read in today's Wall Street Journal that office space in major metro areas has increased considerably (page A2), now's the time to say to the president, "I think there's a way to save money, increase the bottom line, and retain employees. Let's move to Texas."
You've just been through a revolution. The question is whether or not you've evolved with it. When a stock goes down 97%, make sure that you understand that it went from $1.00 a share to 3¢, and when the market soars 8%, remember that it went down 39% for the last year. Perspective. Always retain a perspective. Skepticism is good. Cynicism is not. Venting is good. Well, I feel better.
*It seems that today, if you don't go off halfcocked, you may not go off at all. Six days after posting this article, Linda Chavez had to withdraw as a nominee for Secretary of Labor in the Bush Administration, a "gotcha back" for the old Zoe Baird fiasco. Who the next nominee will be, I don't know and, although I disagreed with many of Chavez's stands, I agreed with many more. I only hope that I do not have to rewrite the article on OSHA's ergonomic standards in the subscriber's section. I wouldn't even mind deleting it.