From the FT online by Luke Johnson
Human resources is a management term that should strike fear into the heart of every self-respecting entrepreneur.
Thanks to low global interest rates, high government spending, increased credit and cheap goods from China, there is a belief that Britain is a very rich country with a robust economy. This may prove a painful illusion.
Forum: Are HR departments a waste of time, or a necessary part of business?
The brilliant Avis boss Robert Townsend in his book Up the Organisation suggests firing the entire personnel department. Indeed, I have radically downsized HR in several companies I have run, and business has gone all the better for it.
Tragically, we live in a time of overwhelming employment legislation, so getting legal procedures right can save time and heartache – that is the sort of task HR handles. It is probably the very definition of a necessary evil for a 21st century business.
HR is like many parts of modern businesses: a simple expense, and a burden on the backs of the productive workers. Other divisions that can become the enemy include IT, legal and marketing. They don’t sell or produce: they consume. They are the amorphous support services.
Often it makes sense to sub-contract these activities and reward the external provider based on performance. If they don’t deliver, you don’t pay and you can replace them.
But managers too often think their company isn’t grown-up unless it has all these important-sounding departments. It is a grave error to succumb to institutionalisation: good leaders care about results, not process. Too often I come across companies where staff in the field work not for customers but for HQ, which drains the company of cash and enthusiasm.
Typically an apparatus builds up around divisions such as HR to expand their role and cost more money. For example, compensation consultants are hired to come up with justifications for paying everyone more.
Training advisers are employed to distract everyone from doing their job with pointless courses. Appraisal experts are contracted to critique staff relations. Experts are drafted in to devise an appropriate corporate social responsibility agenda – whatever that is.
All this paraphernalia is accepted as essential good practice by modern-thinking corporate management. I think most of it is expensive, bureaucratic hogwash. But, clearly, it becomes a lucrative bandwagon for many to jump on – so they justify it all, come what may.
Of course, senior executives understand that HR is powerful – a bit like Mossad or the CIA. Those in personnel know everyone’s salary and bonus and all their disciplinary records. Wily office politicians cultivate them, since they help decide who gets a pay rise and promotion, how contracts are drafted, how individuals are treated if there is a restructuring and so on. Meanwhile, headhunters spend their time cultivating the top talent and shuffling the deck, profiting at every turn.
Running organisations that employ lots of people is increasingly difficult. No wonder the Rich List is full of more property entrepreneurs than any other kind. Inanimate objects like buildings can’t sue for unfair dismissal for discrimination over age, race, faith, gender, or sexual orientation – or demand flexible working or maternity rights.
Bosses who do a poor job can be as bad as workers: no one seems to accept blame for anything. Rose Gibb, chief executive of Maidstone and Tunbridge Wells Health Trust, received a £75,000 pay-off after at least 90 patients died from clostridium difficile in hospitals she ran. The message is: reward for catastrophic failure.
Inevitably, the bracing winds of a downturn will clear away a lot of pointless administration.
Companies will cut back on non-essential functions and ship expensive jobs abroad to cheap countries when they can. Legislators who have never met a payroll refuse to understand that when they gold-plate employment rights, they ultimately destroy jobs and prosperity.
Thanks to low global interest rates, high government spending, increased credit and cheap goods from China, there is a belief that Britain is a very rich country with a robust economy. This may prove a painful illusion.
Companies should start getting fit right now. As Albert Einstein said: “Bureaucracy is the death of any achievement.” When it is a question of survival, there is no room for the non-essential.
Email: Luke Johnson
Human resources is a management term that should strike fear into the heart of every self-respecting entrepreneur.
Thanks to low global interest rates, high government spending, increased credit and cheap goods from China, there is a belief that Britain is a very rich country with a robust economy. This may prove a painful illusion.
Forum: Are HR departments a waste of time, or a necessary part of business?
The brilliant Avis boss Robert Townsend in his book Up the Organisation suggests firing the entire personnel department. Indeed, I have radically downsized HR in several companies I have run, and business has gone all the better for it.
Tragically, we live in a time of overwhelming employment legislation, so getting legal procedures right can save time and heartache – that is the sort of task HR handles. It is probably the very definition of a necessary evil for a 21st century business.
HR is like many parts of modern businesses: a simple expense, and a burden on the backs of the productive workers. Other divisions that can become the enemy include IT, legal and marketing. They don’t sell or produce: they consume. They are the amorphous support services.
Often it makes sense to sub-contract these activities and reward the external provider based on performance. If they don’t deliver, you don’t pay and you can replace them.
But managers too often think their company isn’t grown-up unless it has all these important-sounding departments. It is a grave error to succumb to institutionalisation: good leaders care about results, not process. Too often I come across companies where staff in the field work not for customers but for HQ, which drains the company of cash and enthusiasm.
Typically an apparatus builds up around divisions such as HR to expand their role and cost more money. For example, compensation consultants are hired to come up with justifications for paying everyone more.
Training advisers are employed to distract everyone from doing their job with pointless courses. Appraisal experts are contracted to critique staff relations. Experts are drafted in to devise an appropriate corporate social responsibility agenda – whatever that is.
All this paraphernalia is accepted as essential good practice by modern-thinking corporate management. I think most of it is expensive, bureaucratic hogwash. But, clearly, it becomes a lucrative bandwagon for many to jump on – so they justify it all, come what may.
Of course, senior executives understand that HR is powerful – a bit like Mossad or the CIA. Those in personnel know everyone’s salary and bonus and all their disciplinary records. Wily office politicians cultivate them, since they help decide who gets a pay rise and promotion, how contracts are drafted, how individuals are treated if there is a restructuring and so on. Meanwhile, headhunters spend their time cultivating the top talent and shuffling the deck, profiting at every turn.
Running organisations that employ lots of people is increasingly difficult. No wonder the Rich List is full of more property entrepreneurs than any other kind. Inanimate objects like buildings can’t sue for unfair dismissal for discrimination over age, race, faith, gender, or sexual orientation – or demand flexible working or maternity rights.
Bosses who do a poor job can be as bad as workers: no one seems to accept blame for anything. Rose Gibb, chief executive of Maidstone and Tunbridge Wells Health Trust, received a £75,000 pay-off after at least 90 patients died from clostridium difficile in hospitals she ran. The message is: reward for catastrophic failure.
Inevitably, the bracing winds of a downturn will clear away a lot of pointless administration.
Companies will cut back on non-essential functions and ship expensive jobs abroad to cheap countries when they can. Legislators who have never met a payroll refuse to understand that when they gold-plate employment rights, they ultimately destroy jobs and prosperity.
Thanks to low global interest rates, high government spending, increased credit and cheap goods from China, there is a belief that Britain is a very rich country with a robust economy. This may prove a painful illusion.
Companies should start getting fit right now. As Albert Einstein said: “Bureaucracy is the death of any achievement.” When it is a question of survival, there is no room for the non-essential.
Email: Luke Johnson
( I did have friend in another HR dept advising me every step of the way ).
. Prefferred supplier lists are compiled for their convenience, consisting of psychophantic low level resourcers from mainly large agencies.
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