Why HR? A good question! Not that I think everyone feels the same way about HR, but let’s be honest, it is a department that doesn’t get much credit or an area that isn’t considered important. Why?
Too often, Human Resources is looked at as a staff function – like legal or communications departments. Sales departments are revered as the “rock stars” of the company because they bring in the money. The marketing department is usually given a “fat” budget because they create the demand for sales. Then the product group is revered because they bring “new offerings” to the table.
But where is HR in all of this? The view of HR’s importance really needs to change, because HR is the engine of growth for all businesses for a number of reasons:
- The Brand Inside = The Brand Outside: If your employees aren’t happy, they’ll talk about it on social media and in public. No ad campaign or new product can overcome the “buzz” that your company is a bad place to work. (A New Brand World by Scott Bedbury, http://www.brandstream.com/book.html)
- Customer Loyalty or the “People Customer Model” is now taught in business schools. Companies that treat their staff will have happier customers via engagement, gratitude and stronger bottom lines. HR is pivotal to this, helping in areas such as talent management, wellness and training.
- Information Mastery – gaining a competitive advantage from information is not as much a technological challenge as it is about people, culture and leadership. From retail to manufacturing to services, being an “Information Master” is the secret to winning your market. HR’s domain – people, culture and leadership – is twice as important to this end as Information and Technology (which, by the way, assumes the majority of your budget). Recommended read: Information Masters, Secrets of the Customer Race by John McKean
Every company should have a “Chief People Officer” and they should have a seat at the table alongside the Operations, Marketing, Finance and Sales leaders. Otherwise, you’re designing your company to make one of its top profit centers underpowered for the job.