The Business Purpose of HR

Thankfully, there are business leaders out there who "get it" when it comes to the real business purpose of Human Resources. Bob Dumouchel, is one of those business leaders, as he mentions in PEO Insider from November 2005: http://www.napeo.org/members/insider/nov05/justmyopinion.cfm?.

Much more than rule enforcers, and often incorrectly cast that way in many organizations, HR plays such a critical role in adding value by helping company leadership attract and retain top talent. That's Job #1 for HR, he says. I definitely agree.

Dumouchel implores us to look at HR strategically - especially if you're in HR and want a "seat at the management table", which he compares to what IT professionals faced 30 years ago. The IT professionals got there by creating value - converting the asset of data into valuable, and strategic, business information. HR is still struggling to get there, because they're still the definer and defender of "the rules box." That has to change he says, and makes this bold statement:

"The business purpose of HR is not to follow the rules." Huh? Stay with me...He goes on to say:

"The business purpose of HR is to develop a world-class workforce that creates substantial competitive advantage for the business, and the opportunity to advance that agenda happens every day.

"Every time a business hires or fires, it is an opportunity to improve the quality of its workforce. HR professionals must understand the competitive situation of the organization within the market and develop a workforce strategy. This includes seeking diverse candidates who will sharpen the competitive edge of the business and increase the overall corporate knowledge.

HR must continually cull the workforce and either correct or remove substandard performance. HR must coach and develop people within the organization, and create clear career paths to enhance retention of the right people.

HR needs to understand the complex web of state and federal employment laws and regulations and use this knowledge to help the business navigate to its goals.

HR must stop telling management what they cannot do and tell them instead how to reach their goals within the rules."

Right on, Bob. Now could you tell that to all of those organizations that still don't get it?

The good news is that this expertise doesn't have to be developed in-house. HR outsourcing (HRO) is one of the fastest-growing industries in this country, projected by Gartner to be a $55B (yes, that's billion) dollar industry by the end of 2007. Consider HRO a strategic business decision, as you consider ways for your company to be more productive & profitable, while saving time on non-core administrative HR tasks. If you're already in HR, you can add significant value to your role, and get that seat at the management table, because at the end of the day, HRO is just an implementation strategy of the HR function - and a darned good one!