As far as we know, HR department has always been here to support a company’s stability, especially for large MNCs and SMEs with distributed officers across departments. However, another option that has emerged is the corporate concierge. Startup can run without personnel/HR teams, but many recommend that employing an HR staffer when at least 15 employees are hired will bring an advantage.
The case is that, a firms competitive advantage always lies in their human capital – which is why HR department plays crucial role. The idea of a corporate concierge is certainly appealing, especially one that promises to enhance the overall practice of HRM and staff satisfaction. But HR expertise is still required, if firms are to compete for talent and retain that talent.
Similarly, HR professionals familiar with the business operating systems of large companies are needed for negotiating conflicts, training and developing new hires and more. Corporate concierges are a good idea, but the costs of not having proper HR staff around can outweigh any benefits from not maintaining a corporate concierge.
Companies seeking flat management structures and greater employee accountability frequently target human resources. Executives claim traditional HR departments stifle innovation and inhibit businesses with inefficient policies and processes. Concurrently, a booming HR software industry makes it easier to automate or outsource personnel-related functions, such as payroll and benefits administration.
Lack of HR Creates Problems
Critics point out that the absence of in-house HR staff can affect staff and management acutely, especially when it deals with bread-and-butter HR responsibilities (i.e. mediating employee disputes and resolving pay problems).
Most managers lack the specialised knowledge crucial for keeping a company competitive and compliant with legal requirements. Lacking understanding of the latest rules under the Family and Medical Leave Act, for example, can expose companies to lawsuits.
This is especially for technology firms and others involved in the STEM (Science, Technology, Engineering & Mathematics) field as they may not know where to recruit qualified engineers. This can disadvantage them in the competition for talent that many companies in tight labour markets often engage in.
Marketing HR to Employers
HR has an image problem. Not only is it perceived as a cost centre by business owners and management, but as a transaction/process centre, with HR’s strategic role in human capital and sustaining competitive advantage via corporate culture and employee development often discounted. Regardless of the reality and any scholarly evidence, many good HR leaders who developed their HR competencies are viewed as transactional leaders.
True business leaders are seen as possessing a transformative leadership style, defined as:
Transformational leaders…are those who stimulate and inspire followers to both achieve extraordinary outcomes and, in the process, develop their own leadership capacity. Transformational leaders help followers grow and develop into leaders by responding to individual followers’ needs by empowering them and by aligning the objectives and goals of the individual followers, the leader, the group, and the larger organisation.
By contrast, HR leaders tend towards transactional leadership (managerial leadership), which is more about command & control, focusing on roles of supervision, organisation and group performance, promoting compliance through both rewards and punishments. Unlike in transformational leadership, transactional leaders are not looking to change the future but maintain the status quo.
Leaders using transactional leadership as a model focus on followers’ work, in order to determine faults and deviations. This leadership style is effective in crisis and emergency situations, as well as for projects that need to be carried out in a specific way, such as engineering tasks or military missions.
Most HR professionals don’t understand how their employers business operations. The history of HR is that of administrative support dealing with benefit administration and growing from there. Universities and professional association have done their best to professionalise the field by adding certifications and recertification requirements. And many universities have excellent HR programs.
But for most companies, the professionalism of HR isn’t considered up to par. HR processes implemented to meet compliance requirements and similar issues frustrate managers and slow down actions. Due processes and employment laws need to be followed, disciplinary procedures and dismissals need to be tracked, amongst any number of bureaucratic processes.
But without HR departments, the uncertainty and potential for favouritism can emerge. Is this a sort of firm which can recruit and retain talent and workhorses? Not likely. HR serves a crucial role
None of this means that the critics of HR are wrong about the problem; what is wrong is the solution. If HR is strictly transaction-based, all of its functions can be outsourced. But having an HR department available to lead in resolving employee issues allows managers to focus on organisational priorities, dealing with external processes in navigating markets, rather than internal processes involving employees.