By Senyo ADJABENG
In business literature, Human Resources (HR) is often portrayed as a strategic partner, a critical player in shaping organizational culture, driving employee engagement, and aligning workforce capabilities with business objectives.
The rhetoric is compelling: HR is no longer just about payroll and compliance; it is a cornerstone of organizational success. Yet, beneath this glossy veneer lies a more cynical reality.
Despite the lofty theories and aspirational narratives, HR is frequently sidelined in executive decision-making, relegated to administrative tasks, and viewed as a cost center rather than a strategic asset. This article delves into the sarcasm embedded in HR theory, exploring the gap between what is preached in Hr School as against what is practiced in organizations.
The Strategic HR Myth
The concept of Strategic Human Resource Management (SHRM) has been a dominant theme in HR literature for decades. Scholars such as my taught leader Dave Ulrich, have championed the idea that HR should be a strategic partner, contributing to the formulation and execution of business strategies (Ulrich, 1997).
The theory posits that HR professionals should sit at the executive table, influencing decisions on mergers, acquisitions, market expansions, and other critical business moves. However, the reality often falls short of this ideal.
In practice, HR’s role in strategic decision-making is frequently limited. A study by Kaufman (2015) found that while HR leaders are often involved in discussions about workforce planning and talent management, their influence wanes when it comes to broader business strategies.
The study revealed that only 34% of HR leaders were regularly included in high-level strategic meetings, and even fewer had a significant impact on the outcomes of those discussions. This disconnect between theory and practice underscores the sarcasm in HR’s supposed strategic role.
One of the primary reasons for HR’s limited influence is its enduring association with administrative functions. Despite the push for strategic relevance, HR departments are often bogged down by the day-to-day tasks of managing payroll, benefits, compliance, and employee relations.
These responsibilities, while essential, do little to elevate HR’s status within the organization. A survey by Deloitte (2017) highlighted that 60% of HR professionals spend the majority of their time on administrative tasks, leaving little room for strategic initiatives.
This administrative burden is further exacerbated by the increasing complexity of labor laws and regulations, which require HR to devote significant resources to compliance. As a result, HR is often perceived as a bureaucratic function rather than a strategic partner, reinforcing its exclusion from executive decision-making.
Again, perception plays a crucial role in shaping HR’s place within organizations. Despite the efforts of HR leaders to rebrand the function as strategic, many executives still view HR through a narrow lens. A study by Wright and Nishii (2013) found that CEOs and other top executives often
see HR as a support function rather than a core business function. This perception is rooted in the historical role of HR as a personnel department, focused on hiring, firing, and managing employee records. The perception problem is further compounded by the lack of financial literacy among HR professionals.
A report by the Harvard Business Review (2018) noted that only 25% of HR leaders felt confident in their ability to interpret financial statements and contribute to financial discussions. This lack of financial acumen undermines HR’s credibility as a strategic partner, making it difficult for HR leaders to gain a seat at the executive table.
The Power Dynamics
Power dynamics within organizations play a significant role in HR’s marginalization. In many companies, the finance and operations functions dominate the executive suite, with their leaders wielding considerable influence over strategic decisions. HR, by contrast, is often seen as a secondary function, with limited power to challenge the status quo.
A study by Pfeffer (2010) highlighted the power imbalance between HR and other functions, noting that HR leaders are often excluded from key decision-making processes because they lack the political capital to influence outcomes.
This power imbalance is further reinforced by the fact that HR is often seen as a cost center, with its budget and resources subject to scrutiny and cuts during times of financial constraint.
One of the core tenets of HR theory is that HR should act as an advocate for employees, ensuring that their needs and concerns are addressed by the organization. However, this role often puts HR in a difficult position, caught between the interests of employees and the demands of management.
A study by Guest and Conway (2011) found that HR professionals often struggle to balance their dual roles as employee advocates and organizational gatekeepers. This tension can lead to a loss of trust among employees, who may see HR as being more aligned with management than with the workforce.
At the same time, executives may view HR as being too focused on employee concerns at the expense of business objectives. This Catch-22 situation further undermines HR’s ability to influence strategic decision-making.
How HR Can Practically Make It to the Executive (C-Suite) Table
The aspiration for HR to be recognized as a strategic partner and secure a seat at the executive table is not new. However, achieving this goal requires more than just rhetoric or theoretical frameworks. It demands a practical, deliberate, and multifaceted approach to reposition HR as a critical driver of organizational success.
Despite the challenges, there are steps that HR can take to enhance its strategic relevance and secure a place at the executive table. One key area of focus is developing financial literacy among HR professionals.
By gaining a better understanding of financial statements, budgeting, and cost management, HR leaders can speak the language of business and contribute more effectively to strategic discussions.
Another important step is to leverage data and analytics to demonstrate HR’s impact on business outcomes. By using metrics such as employee engagement scores, turnover rates, and productivity data, HR can make a compelling case for its role in driving organizational performance.
A study by Bersin (2016) found that companies with strong HR analytics capabilities were 2.5 times more likely to have HR leaders involved in strategic decision-making.
HR must work to build stronger relationships with other functions, particularly finance and operations. By collaborating more closely with these functions, HR can gain a better understanding of business priorities and align its initiatives with organizational goals.
This cross-functional collaboration can help to break down silos and position HR as a key player in the executive suite. HR must shift from being a reactive function to a proactive one that anticipates and addresses business needs.
This requires aligning HR strategies with the organization’s overall mission, vision, and strategic priorities. HR leaders should actively participate in business strategy discussions to understand the organization’s goals, challenges, and opportunities.
This enables HR to tailor its initiatives to support these objectives. HR must identify areas where it can create the most value for the organization.
HR Must Think Like a CEO
To gain credibility in the C-suite, HR leaders should think beyond their function and consider the broader business implications of their decisions. This includes understanding market trends, customer needs, and competitive pressures. HR must demonstrate the return on investment (ROI) of its initiatives.
This requires a shift from viewing HR as a cost center to seeing it as a value creator. HR must share success stories that highlight HR’s contribution to business outcomes. HR should be willing to take calculated risks and innovate. This demonstrates HR’s ability to think strategically and drive change.
Finally, HR leaders must actively advocate for their inclusion in the C-suite. This involves challenging outdated perceptions and demonstrating HR’s value to the organization. HR must continuously build relationships with mentors or sponsors in the C-suite who can advocate for HR’s inclusion in strategic discussions.
Changing perceptions takes time, but persistence pays off. and hence, HR must on tinuously demonstrate HR’s value and push for a seat at the table.
Securing a place in the C-suite is not an easy task for HR, but it is achievable with the right strategies. When HR succeeds in earning its place at the executive table, it not only elevates its own role but also contributes to the long-term success of the entire organization.
For Further Reading…
- Bersin, J. (2016). The Role of HR Analytics in Strategic Decision-Making. Deloitte University Press.
- Harvard Business Review. (2018). The Financial Literacy Gap in HR. Harvard Business Publishing.
- Pfeffer, J. (2010). Power: Why Some People Have It and Others Don’t. HarperBusiness.
- Ulrich, D. (1997). Human Resource Champions: The Next Agenda for Adding Value and Delivering Results. Harvard Business School Press.
- Wright, P. M., & Nishii, L. H. (2013). Strategic HRM and Organizational Behavior: Integrating Multiple Levels of Analysis. Cornell University ILR School.
