Should HR be split?

by Janie Smith07 Aug 2014
Does the HR role need to be split? The answer is yes, according to business advisor and author Ram Charan.

In this Harvard Business Review article, Charan said he talked to CEOs around the world who were “disappointed in their HR people”.

“They would like to be able to use their chief human resource officer (CHROs) the way they use their CFOs – as sounding boards and trusted partners – and rely on their skills in linking people and numbers to diagnose weaknesses and strengths in the organisation, find the right fit between employees and jobs, and advice on the talent implications of the company’s strategy,” he wrote.

He said that most CHRO’s were “process-oriented generalists” who were focused on internal matters like engagement, empowerment and cultural issues, but were not good at relating HR to real-world business needs.

“They don’t know how key decisions are made, and they have great difficulty analysing why people – or whole parts of the organisation – aren’t meeting the business’ performance goals.

“Among the few CHROs who do know, I almost always find a common distinguishing quality: they have worked in line operations – such as sales, services or manufacturing – or in finance.”

Charan suggested that the CHRO role be removed and instead, HR be split into two strands – one administrative, which would deal with compensation and benefits and report to the CFO, and one strand for leadership and organisation which would “focus on improving the people capabilities of the business and would report to the CEO”.

He said those in the leadership strand would be “high potentials from operations or finance whose business expertise and people skills give them a strong change of attaining the top two layers of the organisation”.

Charan wrote that the proposal was just a “bare outline” and he expected opposition to the idea.

“But the problem with HR is real. One way or another, it will have to gain the business acumen needed to help organisations perform at their best.”

What do you think? Should HR be split?


  • by caca 7/08/2014 11:07:05 AM

    I think HR has changed and developed so much that the typical structure hasn't kept up.
    I find there is such a wide variety of things that many people feel HR is/should be responsible for and can fall under the department.
    Splitting up perhaps HR-Legal, HR - Payroll/Finance, HR - Training/Leadership/Benefits. I think we should move away from pure generalists and have more specialties within organisations.

  • by Graham 7/08/2014 11:10:02 AM

    Complete nonsense!

    As an HRD with an MBA and significant experience in manufacturing I agree with the comment that HR leaders must understand the business and how decisions are made, but to refer to things like compensation as adminstration and to suggest it report to the FD suggest Charam under appreciates or misunderstands the strategic importance and value that comes frim a great HR function...

  • by Anne-Marie Orrock 7/08/2014 11:36:02 AM

    CEO's being disappointed in their HR people is a reflection of their ability to be great leaders. Great leaders don't surround themselves with poor CHRO's and then blame them for being 'process-oriented generalists'. CHRO's presumably get their mandate from the CEO, so if they are being process orientated generalists, or don't know how key decisions are being made, or can't analyse the organisation is because the CEO is either not involving them in key strategies or decisions or is poor at building a strong team around him/her. Point the finger and three are pointing back at you.

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