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Is it time to split HR?

In this recently published article on hbr.org (http://hbr.org/2014/07/its-time-to-split-hr/ar/1) the author advocates for splitting HR into an admin part residing under the CFO and a (leadership) development part which should be run by high potentials from operational parts of the business or finance people. The overarching purpose is to make HR more business oriented such as the development that Finance has undergone and is still undergoing for the past 5-10 years. I think this is a brilliant idea, but what do you think?

Answers

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

Great article. It's definitely a brilliant idea and one more companies should seriously consider. We went through this and it's a process, but if you have a motivated person willing to be open minded to your suggestions and willing to learn; it can be done fairly easily. We had to train her on what to look for in a resume, what to listen for on her initial phone interview and what it looks like when someone shines.

Then we took it one step beyond that. When someone left who we felt was not a good fit, we asked her to go back and review the resume, call notes, interview notes and the person's assessments and report back if she would have done anything differently. After doing this assessment multiple times she began to understand components that stuck out to her and she began slowing changing her mindset. Do we always get it right? Nope, but we are hiring better candidates today than we were six months ago!

Mahendra Pattni
Title: Director, Financial Systems & Processes
Company: Rogers Corporation
(Director, Financial Systems & Processes , Rogers Corporation ) |

A good article with thought provoking idea - Definitely something to think about! In my experience HR Business Partners (BP) don't spend time like Finance BPs to understand the business. They are mainly super administrators of performance management systems, shuffling papers on non-business related issues, etc. Also, most companies lack or have lost the human touch because of the electronics application systems. Its time for administrative aspect to come under Finance who have better management skill and processes to administer. Let the actual human side to report to the CEOs for better acquisition and retention of talent.

Merh Brinkmann
Title: CFO
Company: Docebo NA Inc
(CFO, Docebo NA Inc) |

I cannot agree more with your comments. There is a HUGE reliance on the TMS to retrieve only the best mapped out resumes.

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

Thats seems like a very large proportion to admin Thomas. Think there should be significant efficiency gains to be had there.

Ken Stumder
Title: Finance Director / Controller
Company: Ken Stumder, CPA
(Finance Director / Controller, Ken Stumder, CPA) |

I enjoyed this article, particularly the proposition that HR be divided into two functions with HR-LO comprised of individuals with operational or finance experience.

I would submit that this is not an entirely novel idea. HR's placement within the management team will often depend on the nature of the organization. Professional service organizations do tend to put a higher emphasis on the HR-LO side vs. the HR-A side.

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

I like Ram's idea, but really think HR is a tripartite organization.

1., Administrative (handles all those pesky Federal/State/Local issues which keep growing logarithmically year in and year out).
2. Benefits and compensation - they advise on salary ranges for banding of like-kind jobs as well as handling the mind numbing paperwork involved in the benefit programs.
3. Human Asset Strategy - which is pretty much in agreement with Ram's idea. However, this is a very small unit which does not create job specs or actually do the acquisition, they assist and provide consultation to the individual hiring managers, again with consultation with the B&C folks and Finance based on budget, and help the acquisition process along. The manager of the X department should have a clear cut idea about what type of person is needed and what the job spec should be; how can the traditional HR type know (again Ram hit the nail on the head, they never worked outside HR).

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

To some extent you can split HR into: transactional, analytical and business partnering. Just as you can do with Finance. In Finance we are working hard to reduce the workload/resources spent on transactional tasks, we invest heavily in systems that can give us advanced analytics and all companies now have business partnering functions (the human side of Finance) that should interact with and understand the business and in general drive value on the bottom-line.

Wayne's split has some similarities to that and I would say that HR definitely needs to undergo a transactional transformation. If that is better done under the Finance umbrella, the article makes a lot of sense. Just not sure if it would take away too many resources from Finance or are we already in a place where we can handle this task also?

David Buley
Title: Chief Financial Officer
Company: Association of Independent Schools of NS..
(Chief Financial Officer, Association of Independent Schools of NSW) |

As I read the article, it crystallised the problems we are having with our HR department. Since inception they managed recruitment but eventually lobbied to take over travel booking, mobile phone and car parking usage - on the basis that the policies around these expense items are employee based and therefore the discussions with employees need to come only from HR.
As we are in a recruitment hiatus, HR has too much free time and they are now making a pitch for payroll functions, again claiming that as this is 'employee' based, they should control it. Extending that rationale out to the edges, HR would claim they should run all departments as all organisations employ people.
Ironically, they do a poor job at the learning side of the business so I see Ram's suggestion would focus our organisation on the deficiencies of our current HR strategy.

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

Why not make/substitute the operative words administrate vice run? This way ownership stays with the CFO office, but you have delegated the administrative aspects. All policy decisions come from your office?

Michael Reagan
Title: Owner/Talent
Company: MJR Voiceover Productions
LinkedIn Profile
(Owner/Talent , MJR Voiceover Productions) |

It's a great idea to transform your HR department into more of a strategic, rather than administrative role and outsource the administrative to a PEO and let them take on some the risks and responsibilities related to having employees.

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