Last Autumn, Personnel functions were faced with a barrage of new legislation. The implications are still being considered as case law emerges, and new codes of practice are published. For instance, the much delayed guidelines for the Data Protection Act are now going to provide yet more scope for arguments about detailed interpretation of the law.
At the same time - and arguably at a time when it can have a profound effect on business - Personnel itself is going through another period of introspection as its purpose is challenged yet again. This seems contradictory. The national press quotes critical conference speeches, but at the same time publishes some rigorous research on how important people factors are in business, and even the FT runs a series of excellent supplements over two months on people management.
In 1997, not long after the Barings failure, I published an article in People Management quoting Professor Amin Rajan's prediction that the HR function could become "the bucket behind the elephant". Although there has been some progress since then, HR's role outside hiring and firing is still too much that of the man with the bucket.
Since company cultures vary and the experiences of personnel chiefs are different, much ultimately depends on the ability and personal credibility of individual HR executives and advisers to influence sceptical line management. It might seem surprising, but there are still CEOs who expect HR functions to carry out instructions that the Board has formulated (usually with no Personnel representation on it). If the CEOs tried to do this to a Marketing function, there would be an outcry... so what can be done?
Here are three pointers:
- The first is to think in financial terms. How can you best show that good people practice goes beyond just saving money through, for example, lower absenteeism? It can actually make money too. If only 1% of businesses, according to a recent report, assess the return on investment in training, it is not surprising that budgets are frozen when margins are under pressure. Some time ago, I recall advising an organisation where it was possible to tailor-make training to help win new business just after the trough of an economic cycle. There was a tenfold return on the investment.
- The second is to interpret new or anticipated legislation in a way that addresses problems as they affect your business, where you do not necessarily need a formal legal opinion. Last December, The Times quoted my comment that the new financial services legislation provides a "unique opportunity" for human resource functions to work closely with their Compliance colleagues to sort out problems.
- Finally, how skilled are you at influencing busy CEOs and directors in business terms? Sometimes an external view can help address challenges, but do you know how you should best present arguments, address options and risks, and when to influence the CEO so that he subsequently comes back to you with "his" bright idea (actually yours, of course). So, when did you last consider your own skills development?