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Is HR an administrative function or a strategic partner?

Alan Jones's Profile

Answers

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

Both. I need an HR specialist for offer letters, on-boarding, termination procedures; as well as employee counseling, budget management, understanding new laws that are popping out left and right...

Natalie Barranco
Title: CFO
Company: All Aboard America! Holdings, Inc.
(CFO, All Aboard America! Holdings, Inc.) |

I agree. The way you utilize this person can make them more administrative than strategic or vice versa. HR is more strategic as part of our risk management team. HR is working to initiate programs for loss control for workers compensation and to assist in a healthier workforce to lower insurance premiums. HR is involved in providing training to educate the work force and give them the tools to move the organization forward. The paperwork has to be done by is secondary in our environment.

Anders Liu-Lindberg
Title: Regional Finance Business Partner
Company: Maersk Line Northern Europe
LinkedIn Profile
(Regional Finance Business Partner, Maersk Line Northern Europe) |

HR is of course a strategic partner although they, as goes with other support functions as well, may not always be recognized as one. In many businesses people are the primary asset and finding and retaining the right people should be a strategic concern for most companies. In this process HR plays an important role and this definitely goes beyond just administrative work.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Both and administrative, depending on how you look at HR.

As has been said, the explosion of HR related laws make them a strategic partner in risk management, and an administrative partner in the maintenance of the programs that are required to stave off governmental fines.

The administrative role in the function that Regis talks about (offer letters, etc) and possibly strategic if you use them in the hiring functions/job description and requirement role.

The last aspect IMHO, I would use very sparingly.

Anders Liu-Lindberg
Title: Regional Finance Business Partner
Company: Maersk Line Northern Europe
LinkedIn Profile
(Regional Finance Business Partner, Maersk Line Northern Europe) |

I am surprised to see the how narrow the thoughts about HR are. Obviously this is a site for finance professionals, but I could imagine a similar discussion on a HR site just discussing if Finance is an administrative function or not. Of course there are administrative aspects about both functions, but I would argue that they are both strategic as well.

Let me give you an example from my company. In the next 4 years we are looking to hire 3000 people around the world. These will primarily be employed offshore however it doesnt change the fact that this tasks cannot be managed by hiring managers. This task is so incomprehensible that it needs an overall strategy. This strategy can only come from HR. It might be that each individual hire is more up to the hiring manager, but for this highly strategic task HR is definitely the function that needs to be in the driving seat.

This might vary between large and small companies however I would expect that HR always has a seat at the table.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Anders -

Why is HR in the driving seat to hire 3,000 (which is a nice sign of "new" times)?

They need to be part of the strategic team; for they will ultimately research pay/benefits in various places; compare/contrast the requirements the Team/Management choose should be part of the new hire's background.

But lead? Why?

Anders Liu-Lindberg
Title: Regional Finance Business Partner
Company: Maersk Line Northern Europe
LinkedIn Profile
(Regional Finance Business Partner, Maersk Line Northern Europe) |

When I say lead I see that as the strategic lead. They need to devise the strategy for how to hire all these new employees however each single hire will be between the hiring manager and HR with the hiring manager having the ultimate decision.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

That makes more sense, thank you for the clarification.

Topic Expert
Keith Perry
Title: Director of Global Accounting
Company: Agrinos, Inc.
(Director of Global Accounting, Agrinos, Inc.) |

Agreeing with Anders; And going further, as people are often strategic resources, business location and product strategy depends in part on one's ability to access, train and retain those people. This can be complicated by not just the employees themselves but, for example, restrictive legislation about hiring and firing, union representation, and the like. So...quite strategic.

Paul Stheeman
Title: Interim Treasurer
Company: Self-employed
(Interim Treasurer, Self-employed) |

This depends very much on how HR is set up and how HR see their own responsibilities. If the team restrict their activities to developing and rolling out policies they will not be viewed as a strategic partner. If however, they offer global support for items such as insight into recruiting markets, local laws and customs then they can be of great value to the business.

david waltz
Title: Assistant Treasurer
Company: Integrys Energy Group
(Assistant Treasurer, Integrys Energy Group) |

The HR role is in the eye of the beholder.

Topic Expert
Shannon Mathews
Title: Controller
Company: Aldrich Services LLP
(Controller, Aldrich Services LLP) |

I think that this is a matter of level as with any department.

When you are small you don't have a true "HR" department. Individual managers are handling the strategic portion of the HR function and you have a payroll/HR person that is primarily adminsitrative.

Once your business starts to grow you develop the need to consolidate the cultural view and that leads to the strategic HR manager. This manager has a team of staff doing the administration work so that they can concentrate on the strategic role. In most companies you live and die by your people and the culture that they make up. A good HR manager will improve your bottom line through their management of culture, incentives, talent, etc (all the things mentioned in posts above).

HR always has that large strategic role the only difference is who is actually completing the duties (small company individual managers share duty, large companies it is back to the actual HR department).

Topic Expert
Stephen Roulac
Title: CEO
Company: Roulac Global LLC
(CEO, Roulac Global LLC) |

Every business function starts strategic and evolves to be administrative in some/many aspects of implementation. The strategic perspective applied to every business function connects that function to the business model, value creation and delivery, risk management, overall enterprise mission and its implementation.

If you are not strategic, how can you know whether administrative aspects, options, and choices are appropriate for and congruent with the strategy?

There is no business function that does not pertain in some way to overall enterprise strategy. And, there is no business function which should not be approached, initially, from a strategic perspective.

In the instance of HR, the strategic perspective starts with considering what work/tasks/human resources are/may be involved in delivering the outcomes that the business seeks to achieve on behalf of tis stakeholders. To begin, the needed work to be done is properly assessed from a make or buy perspective: should the company 'make' this work, by hiring staff to do so, or 'buy' this work from a third party? Then, the question for the work that is appropriately made rather than bought concerns the role of technology and automation alongside of or instead of people. For the work involving people, the questions then pertain to whether such people are inside or outside the company? located onshore or offshore? working nearby or distant? located in company facilities or their own/third party places? retained as employees or contractors? compensated for time/inputs or results/outputs?and further questions.

The questions in the above paragraph are strategic, with significant administrative consequences. While some HR professionals can and do think this way, many - by virtue of their education/training, prior experience, and not being invited to sit at the C-table - are not equipped/oriented to address these questions. Their answers determine which administrative tasks are best implemented in which ways, which decisions necessarily involve strategic considerations.

Harold D. Tamayo
Title: Vice President of Finance
Company: MHA Inc., a Roper Technologies Company
LinkedIn Profile
(Vice President of Finance, MHA Inc., a Roper Technologies Company) |

HR has many functions and also not necessarily is either administrative or strategic. In fact, of the many functions that HR performs those are two of them.

I will address more of the strategic side in this note. Say for example your business is in the growth mode. Also say that your personnel expenses run anywhere from 50%-70% of your total operating costs (this all varies depending on the business BUT we all know as finance professional that the bulk of operating expenses are usually personnel costs).
That means that vcancies, time to hire, quality of hires and the actual timing of on-boarding has not only a major financial impact but also a long term business viability. HR becomes a crucial strategic partner on your headcount management. That means, HR has to align staffing and OD functions to help drive the business or manage costs if revenues are or not materializing.

Topic Expert
Malak Kazan
Title: VP, Special Projects
Company: ERI Economic Research Institute
(VP, Special Projects, ERI Economic Research Institute) |

HR should be considered a strategic function and whether it has a strategic impact on the business depends on a number of things: the investment in HR infrastructure to "enable" it be strategic, the talent of the HR team; organization structure in terms of whether HR reports directly to business leader or is "buried within" another function (may see it reporting into admin, finance and operations often). These factors in turn are driven by the business cycle of the organization. Ultimately, as a business concern, you want to create a sustainable competitive advantage that can't be easily replicated in the marketplace. One of the most difficult "things" to replicate is an organization culture which HR working in collaboration with business leaders can drive this strategic outcome.

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