In the ever-evolving landscape of business and corporate leadership, the Human Resources (HR) function has faced a conundrum when it comes to its perceived roles within organizations. Renowned HR scholar Dave Ulrich's model outlined four distinct roles for HR: Strategic Business Partner, Employee Champion, Change Agent, and Expert Administrator. However, the reality often diverges from these proposed roles, leading to an ongoing disparity in how HR wishes to be seen and how it is actually perceived by CEOs and business leaders.
The Gap in Perception
Over the years, HR has found itself frequently perceived as Expert Administrators and Employee Advocates by CEOs and business leaders. While these roles are essential for the smooth functioning of an organization, HR aspires to be recognized as Strategic Business Partners and Change Agents. The gap in perception between what HR wants to be and how it is currently perceived is not merely a matter of semantics; it represents a missed opportunity for both HR professionals and the organizations they serve.
The Challenge of Demonstrating Value
The primary reason for this perceptual gap lies in HR's struggle to consistently and quantitatively demonstrate its impact on value creation within the organization. A report by the Society for Human Resource Management (SHRM) titled "Human Capital Analytics and Metrics" highlights this challenge. Many CEOs and CFOs remain skeptical about HR's role, often viewing it as a necessary expense rather than a strategic asset. This skepticism stems from HR's difficulty in providing tangible evidence of its contributions to the company's bottom line.
The Value Conundrum
The inability of HR to clearly demonstrate its role in value creation raises questions about its relevance in modern organizations.
Thought leaders and experts, including Ram Charan, Vineeth Nair, and publications like the Harvard Business Review (HBR), have warned about the potential obsolescence of HR. This concern stems from the perception that if HR cannot adapt and fulfill its desired roles, it might face the risk of being marginalized in an increasingly dynamic business environment.
HR’s EXISTENCE - WARNING
David Ulrich stated in Harvard Business Review, “20% of the professionals are exceptional, adding value that helps organizations move forward, 20% of HR folks are locked into a fixed mindset and lack either competence or commitment to deliver real value, and 60% are in the middle.”
Ram Charan in his article Time to Split HR in Harvard Business Review, has said “It’s time to say goodbye to the department of human resources (HR). Well, not the useful tasks it performs. But the department per se must go.”
HR will be dead – Vineet Nayar, ex CEO HCL Technologies at the 14th National HRM Summit
The disconnect between HR's intended roles and its actual perception by CEOs and business leaders is a critical challenge that needs to be addressed. Failing to do so may lead to HR becoming obsolete in an environment where demonstrable value is paramount. HR professionals, leaders, and organizations must work together to bridge this gap, ultimately enabling HR to fulfill its potential as a Strategic Business Partner and Change Agent. By doing so, they can ensure that HR remains a vital component of any successful organization.
Well How does HR demonstrates it adds value to Business ?
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Read the book “Making People Count : How to measure the ROI on Human Capital” by Ramesh Ranjan, with a Foreword by Dave Ulrich. Also visit www.makingpeoplecount.com