Should HR be broken in two different verticals ?

Posted on Posted in Blog, Monday Blues

Quite an intriguing question and requires lots of rational thinking and debates. Picking up this thought from Ram Charan’s article in livemint where he proposes HR-A (for administration)—primarily to manage compensation and benefits reporting to CFO, who would have to see compensation as a talent magnet, not just a major cost. The other, HR-LO (for leadership and organization), would focus on improving the people capabilities of the business and would report to the CEO.

He also quotes some fascinating examples on how outsiders, sorry to use this phrase, people from sales, operations and core business taking on HR roles and being extremely successful, some of the finest examples he quotes are; Bill Conaty from GE and Santrupt Misra, who left Hindustan Unilever to join Aditya Birla Group in 1996.

Two different ideas worth experimenting, I have tried to put some key take aways from it.
Sourcing HR professional from non-HR background, this does not means we should stop hiring professional with strong human resource knowledge and expertise; we really need to think about creating a blended HR team. Occasionally organization should move HR professional to sales, marketing or core operations and bring professionals from these segments of business into HR.

The biggest risk is not taking any risk… In a world that changing really quickly, the only strategy that is guaranteed to fail is not taking risks. – Mark Zuckerberg

This will not completely address of problem of HR not being close to business but the experience will help in getting the real insight and understanding on how HR can make an impact on core business.

Movement of these professionals either can be permanent or on deputation basis, minimum two years. CEO and CHRO can jointly review the outcomes in regular meetings with respective deputed professionals and understand the real impact. Let HR experience business and other experience HR to provide real value add.

The other idea on splitting HR into HR-A, CFO reporting and HR-LO to CEO is quite interesting and worth exploring. HR-A group will manage compensation and benefits, rolling up CFO can have multiple impacts. Personnel cost which is almost 60% of expenses of any organization will be managed with more detailing, linking it with CFO’s team organization, it will have better control over this cost on day to day basis, especially when organizations wants to look at ‘cost to serve’ as a measure.

Off course, it’s just not the cost, as Ram Charan suggests compensation has talent magnet, how about cost of talent? CFO’s can think over it.

What’s your take on these ideas and I do leave with this quote.

The success of one market model cannot be migrated to another. Ignoring Macau’s special characteristics and duplicating a Las Vegas or an Atlantic City would not be a successful strategy. – Stanley Ho

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