Why Do We Need HR? How to Explain Its Value During Tough Economic Times

Dear All

Why HR is required, what is the importance and accountability of this department? What all function this department does can be done by HOD's itself then why a separate department required. In such a bad time when recession is all across the globe why not HR should be first to receive pink slip.

These are few questions my friends frequent asks me and I feel that we all must have faced such questions somewhere in our career.

Not only friends, at times people from Sr. Management also say that whatsoever HR does is not of any monitory benefit to the organisation.

I request to all citeHR members kindly let me know how to justify the importance of HR to Non HR People.

Awaiting for your response.

Hello Sujeet,

Whenever anyone asks you that question from now on, just ask that guy if he is married. And if the answer is yes, ask him if his wife works. And if the answer is no, ask him to go home and ask his wife to tell him how much her work at home is worth in terms of money. Just in case, if the guy isn't married, repeat the same, putting his mom in place of his wife... got it? The same answer holds good for HR 7, and for that matter, all such non-quantifiable functions.

Regards,
TS

Dear Sujeet,


There are three pillars in organisation building—structure, processes and people. Out of which the first two are passive without the third one, that is the people. “HR can play a significant role in getting the right people, help them learn and develop, become a sounding board for the employees, the bridge between various management levels, create the right environment for them to deliver, and most importantly it can act as the ‘change agent' in these days of uncertain external environment. HR has made significant progress in aligning and partnering with the business. The fact that HR has got considerable time and attention from the CEO's office reflects the direction.”


A knowledge-based industry like IT, where the vital resources are the human capital who work in the organisation, has seen a faster evolution of HR than perhaps any other industrial sector. IT and ITeS sectors are truly “for the people-by the people-and-of the people”. “HR certainly has evolved faster in the IT and the ITeS industry. The sheer speed of growth of this industry has enabled this. Gone are the days when HR was a record keeping transaction-oriented back office, it has come out on the “board” and also in front of the customers. More customers want to meet

HR heads before signing any deals,” .

In the IT industry, the HR is already a strategic business partner and its impact will be greater in the near future. The widening gap between the demand and supply of talent, accentuated by the shortage of specific skills and vast employment opportunities will ensure this.



“There cannot be more significant times for HR than now and in the foreseeable future. HR shall continue to remain a strategic business partner by literally moving out ‘transactional' HR to outsource vendors.. Any organisation has several key pillars like sales, marketing, etc. But HR remains to be the foundation that supports all these pillars in creating a powerful organisation. “So while most organisations perceive these pillars to impact the business growth, I feel the time has come for HR to be a dominant decision-factor


Regards,

ROY

Dear Sujeet,

This question has been asked many times in citehr. Anyways, I don't mind explaining again, as I find there are more reasons linked to your question (Does recession require HR?)

"HR is like the lady of the house."

HR is essential to make sure others continue remaining.

Many people misunderstand cost-cutting as "head cutting ONLY." Actually, it's the removal of non-profit-making areas, or NON-AFFORDABLE areas.

At this point of recession, the company safeguards the valuable assets... employees are also one of their assets. HR makes sure this asset is safeguarded by: retaining the top talent, identifying the core skills in the company, and imparting training to the existing members, preparing the existing employee base to be equipped to beat the recession (by identifying areas of improvement).

Moreover, the recession has only added to the stress that earlier existed. So, you need to have separate sessions where employees feel motivated and happy about working with the company. Just because a recession has hit, it does not mean that employees will fall at the feet of the employer and do everything. Remember, there are companies that are doing well and are hiring now. Such companies focus on getting good talent, fostering, and retaining them. The very question of removing HR indicates to the outsiders and potential employees that the company does not care for employee-related issues. If HR is nonexistent - chances of autocratic leadership are 100%.

The question your friend asked - can't the company do the things by themselves instead of having HR? When the employer and other profit-making sections are keenly focused on how to make business, they sometimes tend to overlook the needs of the employees. This can hurt the business in the long run.

Recession will be temporary, and the company will still need people to run the business. When things get back to shape... at that point, you can't think of reconsidering the HR policies and employee-employer relations because at that time... you will be far behind everyone in the race. When things get back to normal - it is not survival that is in question, it is who is leading.

I hope I have answered at least 10% of what you expected.

Even in Human Resources - people will have to plan the activities to suit the needs of the business and help in its growth.

Dear Friends,

Thank you for such a quick and prompt response.

Thank you very much, Roy and Asha, for your wonderful explanation. I am now very clear on a few of the queries I raised.

There is still one query left, and I request all of you to respond to that as well. The query that remains is - What is the accountability of this department, and whatever HR does is not of any monetary benefit to the organization.

I am confident that all my senior friends will help clarify this query as well.

Looking forward to your response.

Hi Sujeet,

In response to this query: "What is the accountability of this department and whether HR's actions provide any monetary benefit to the organization?"

The accountability can be explained in the following terms:

Recruitments:
Not just enough if the position is replaced. They see how soon the person is productive (which is linked to training), and whether the person stays at least for a specified period of time (retention).

For attrition – you can differentiate that as Healthy attrition and Bad attrition.

Healthy attrition is: If the person leaves due to personal reasons such as relocating (due to marriage or any such issue), or due to health reasons (not because of a better opportunity or better place but due to circumstances).

Bad attrition is when they move out for better pay, better work, better atmosphere, and the like.

Termination will be on the bad end – because of non-performance (which could not be analyzed during the interview).

Healthy attrition will not show as a black mark in the HR's performance, but bad attrition will.

Performance evaluation and training suggestions: As the company grows, so will the need for training employees. HR must be able to identify these areas, prepare the training plan, and evaluate the training imparted.

Now the Monetary aspect of HR:

Sales not achieved due to lack of manpower availability.
Target not achieved due to a lack of training.
Not completing tasks on time as employees were not provided with enough tools.
Top talent leaves the company because they were not appreciated and rewarded for their contributions.

Do you see a link to all the targets here?

Now your question can be – "How to set the KRAs linked to these for the HR manager?"

Some companies have their VP – HR's KRA as ensuring the inventory level is within what is mentioned as normal, ensuring that production and quality focus on work with no deviation in planning, resulting in fewer errors on the job (fewer defects), and on-time delivery of the output.

That is to say - if the Quality has deviated from the norms from .01 defect to 5% defect.
The review will be to find out the reason.
Was this reason reported during his evaluation?
If yes – what measures were taken for improvement? If taken – what is the training evaluation result?
If all this is fine – HR escapes (because effective measures were taken).
If no measure was suggested for improvement – HR is the person behind the 5% defect!

I mean – since HR did not suggest or take measures for improvement as requested by the quality person – the expected norm was not achieved.

So – who is to blame? HR!

I have explained a little in depth. But I don't know if salespeople use this as an excuse – target not achieved because HR did not provide people/did not provide the right people/did not provide on time...
All this falls on HR's monetary contribution!

Sorry for the lengthy explanation.

HR is a common department for the whole organization. HR recruits, inducts, trains, retains people, and moreover provides health, safety, and welfare to the people.

Rightly said, HR is not generating revenue in direct terms, but indirectly it does so by means of optimum utilization of manpower and setting productivity norms, motivating people to achieve.

Most of the results HR produces are intangible and therefore cannot be seen but can be felt. HR is like GOD, i.e., involved in Creation, Protection, and Destruction through recruiting, providing welfare, and weeding out unwanted people by taking disciplinary action.

HR coordinates with all departments, acting as a glue to stick them together, which may not be visible but necessary. HR maintains the entire organization's employee database and their personal dossiers. Career Planning and Succession planning are overseen by HR. HR recommends promotions and increments to employees. In cases of Industrial Relations (IR) problems, HR handles them with union representatives and negotiates for a peaceful settlement. HR serves as the conscience and mouthpiece of the management.

Just as police stations exist in anticipation of crimes, HR is essential for preventing IR problems. Proactive HR can prevent untoward incidents; HR is prevention while IR is the cure.

When people say HR is a spending department, they may be referring to compensation management. HR does not seek credit for its contributions to the organization, though criticism from other functional areas is not uncommon. HR is often seen as a punching bag, absorbing criticism. HR is likened to a veiling wall of Israel where people lean on and cry. Handling employee grievances, particularly when an employee has a grievance about their boss, is a crucial HR function.

HR professionals are qualified and experienced in understanding the psychology of people and how others perceive us. Those who criticize HR are encouraged to switch to HR roles temporarily to gain firsthand experience before passing judgment.

The HR fraternity welcomes everyone with open arms to join the HR bandwagon.

Jayaanandh, Chennai, 9840928274

HR is a common department for the whole of the organization. HR recruits, inducts, trains, retains people, and moreover, provides health, safety, and welfare to the people.

Rightly said, HR is not generating revenue in direct terms but indirectly it does so by means of optimum utilization of manpower, fixing productivity norms, and motivating people to achieve.

Most of the results HR produces are intangible and therefore cannot be seen but can be felt. HR is GOD, i.e., Creation, Protection, and Destruction are done by HR by means of Recruiting, providing welfare, and weeding out unwanted people by taking disciplinary action.

HR coordinates with all the departments but each department does not have that role. HR is to be seen as a glue to stick all the departments which cannot be seen but without glue, all will not stick. HR has to maintain the whole organization's employee database and their personal dossiers. Career Planning and Succession planning are to be done by HR. Who recommends Promotions and Increments to the employees? It is HR. When there are IR problems, HR will have to handle them with the representative unions and negotiate for a peaceful settlement. HR is the conscience and mouthpiece of the management.

Why police stations when there are no crimes in a particular place? That is only in anticipation.

Why HR means it is only to avoid IR problems. Proactive HR can prevent any untoward incidents. HR is prevention but IR is a cure.

When people say HR is a spending department, they should understand that they are talking about compensation management.

HR is not claiming any credit for its contribution to the organization, but whether other functional people shy away from criticizing HR. HR is like a punching bag and can take as much as possible. HR is like a veiling wall of Israel where people keep their shoulders and cry. Who handles grievances of the employees, particularly when an employee has a grievance about their Boss.

HR people are qualified and experienced enough in understanding the psychology of people, on how and what others feel about us. We request them to switch over to HR and experience themselves for some time at least and then make comments.

We, HR fraternity, with an open arm, welcome everyone to join the HR bandwagon.

Jayaanandh, Chennai, 9840928274

Gentleman,

We are not here to justify our profession. Neither do we want you to bother about us. Only serious management across the world, and almost all countries and industries, know what HR is all about.

Rashid

I fully agree with Rashid.

I think a lot of time has been spent on this topic. If someone who did his HR degree (or for that matter a degree in any specialization) doesn't know WHY he/she did it, there's no justification for that person to ask the reason LATER. This just brings out his/her actual outlook towards the career as well as life in general – this isn't a time-pass forum for sure. I can understand queries asking for advice on whether to join HR or not.

Regards,
TS

No, sirs.

Please understand that your knowledge of HR will not be the same as what I know or have ever heard of. Similarly, there are corporates and even HR professionals who don't know the "scope of the HR job." People still think HR only deals with payroll and recruiting, and believe that all areas related to HR can be done away with.

Please understand that such misconceptions blind the company from seeing what an HR department can contribute. It was only during a national seminar on the role of HR in a recession that I came to know many important factors that I never knew HR could contribute. Although I knew it, I never put it into practice.

All it takes is the right way to explain.

Thanks,

Dear Rashid,

I do not agree with you. The knowledge of individuals with the same qualifications also varies; similarly, the scope of HR differs from person to person. HR might mean something different to you than what I believe about the HR profession. Therefore, it is not justified to claim that it is useless to question why HR is necessary. Instead, you can highlight one or more crucial roles of HR that demonstrate its importance in an organization's successful operation.

Regards,
Naveen

Dear Cite HR members,

I believe this may not be the right way of replying to senior management people or other colleagues when asking about retaining HR personnel in the organization during a recession. However, I want to stress one point to everyone, particularly to Mr. Sujeet.

Mr. Sujeet, on the salary day, consider taking two to three days off without deducting the salary of all employees. This action will demonstrate the value of HR in an organization. It is the best and simplest way to prompt others to reconsider their opinions.

Regards,
Uniquenaga.