Opinions divided on HR’s progress to the executive suite

HR people must learn language of business to be treated like business partners

For years now HR professionals have heard the call: Become more business savvy or risk becoming irrelevant. So how is it going? Depends on who you ask.

Some, recalling either personal successes or the successes of professional acquaintances, see great strides. HR is at the table and making important contributions to the bottom line. In some cases the CEO, CFO and COO recognize the importance of good human resources management and call the HR leader to the table — easy victory for HR.

For others, the struggle continues. Human resources departments are doing transactional work and are not a strategic factor. HR is still on the wrong side of the door waiting to prove its value to skeptics who depend on the function only to make sure employees are paid every two weeks.

Regardless of the progress, there is general agreement among most HR professionals and observers of the profession on the parameters of the challenge. For starters, if HR people want to be taken seriously in the business world, they must be able to talk the language of business. How they learn that language is irrelevant. Just learn it.

“It is crucially important for HR people to not only understand HR, but they need to understand the business of the organization they are working for. And if they are going to add value, they need to understand the industry and the broader economic dynamics,” says Doug Macnamara, president and CEO of executive training centre Banff Executive Leadership Inc.

But the number of HR departments actually doing this today, despite the countless articles, seminars, books and courses, is still quite small, he says. “I would say it is only about 10 per cent of HR departments that I have seen in the last five years that really make an effort to do this.”

HR people don’t want to hear this, he knows. “But I have almost seen a step back towards personnel attitudes as opposed to human resources.”

Why? One reason is that while most take it as a given that HR must offload or at least minimize the time spent on prosaic personnel administrative activities, in a lot of cases the opposite has happened, he says.

Ideally, managers should be handling more of their own basic staff administration tasks and other employee-related problems. But as organizations went “lean and mean,” managers ended up with more people reporting to them and found themselves unable to handle all of the people-related problems. Consequently, at the same time HR wanted to get out from under the mountain of personnel-type problems and do more strategic HR, managers were asking for more help with their personnel problems, he says.

David Berrington, president of B.C. Human Resources Management Association (BCHRMA) and director of HR for Vancouver-based engineering and consulting firm UMA Group, says progress is being made. It is only in the last 10 years that business education actually started to incorporate human resources, he noted. So while the concept that HR is as integral to the business as finance or operations, is still looking for acceptance in some quarters, HR professionals have been acting on their own, taking steps to prepare for the business acumen test.

Three years ago, BCHRMA introduced a new finance for the non-financial executive course. It is the most popular course the association is offering, he says. So much so that the association is preparing to introduce a next level for people who complete the first course and want to learn still more. The association has also reached an agreement with Simon Fraser University that will allow BCHRMA members to take executive development courses at a discount.

But HR’s development of business acumen is not dependent on formal education courses, says Berrington. He has been pushing one of his staff to do more to learn about the business through her day-to-day interactions. “She needs to ask managers about what is going on in their world, what is driving change. She has to find out the intricacies in how we succeed in this business. She has to learn about billable time and how that impacts on salary levels and why we need people long term,” he says. “She needs to start thinking about the client and then work it back to the manager and then to HR.”

“I suggested she speak with the regional manager of finance and administration. Just take them out to lunch and have them explain to you how we make money. How does that translate into profit.”

Macnamara says he is fortunate that early on in his HR career he learned similar lessons about the importance of getting out into the line.

Working at Royal Trust, under Courtney Pratt, then vice-president of HR and now the CEO of Stelco Steel, it was very clear that the HR team was expected to play a part in advancing the organization. “I was totally tied into the strategy of the organization,” he says. “I would request to go on sales meetings. I went out when my sales people were meeting clients, so I could do a better job. I met with customers and I would observe and be in a better position to support my folks.”

Similarly, by learning about the big picture and seeing where the organization fits within it, HR professionals can do things to help the company improve its performance, he says. “You’ve got to understand your competitors and know who is on the rise and who is on the decline, because there might be an opportunity for you to get good people from the declining company.”

And while some in HR may still have to learn more about the business, Berrington says that many already know what they need to. They just need to hone their communication and marketing skills so that everyone else recognizes it.

There is a business lingo and an HR lingo and HR leaders needs to act as interpreters between the two groups, he says. Orientation may seem like an HR concern, but the HR leader must be able to explain to the rest of the executive team why it is important, he says. “We need to show we are losing people in the first couple of years because they didn’t have a proper orientation and that it costs us money to lose people,” he says.

“But then you also have got to be good marketers too,” he says, demonstrating to the rest of the organization just where and how HR is making a difference for the business.

Alice Kubicek is the program director of a new strategic HR course being offered through Carleton University’s Sprott School of Business in Ottawa.

She too says one of the best ways for HR to learn about the business is to get out of HR and spend time on the line.

That doesn’t mean HR people have to actually take jobs outside of HR, they just need to find time to get to know what the other functions and units are doing. “It is just appreciating what the jobs are, what are the work flows, the issues, the concerns.” This also helps build relationships, she adds. “The more strong relationships the better you will be able to move things ahead and be more value to the executive suite.”

Getting an appreciation for other jobs and other functions allows HR professionals to ask the right questions later on, she says, and that is the key to HR professionals becoming business leaders.

“A lot of courses that follow an off-the-shelf format, appear to be designed to provide all the answers. I don’t believe that is possible,” she says. Good leadership is not having the answers, it is asking the right questions. So any HR person can become a business leader, she says. “As long as they have the capacity to learn and the desire to learn, those are the two bits you need.”

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