What do executives really think of HR?

by 06 Feb 2007

The value and perspective of HR varies from business to business. Craig Donaldson speaks with Doug Simpson, managing partner of finance and performance management at Ernst & Young, to gain insight into his impressions of the HR function

What are your impressions about the effectiveness of HR in your business?

I think that the effectiveness of HR in general, needs to focus on the moments of truth for individual organisations. For us it’s about recruitment, project experience and learning and development, and then how we deliver on that structured learning. Those are the three most important parts for HR to be effective in our business.

What are your impressions of HR in general?

Too often HR becomes disconnected from the business and they don’t understand what the strategy is and what the critical differences are for a business in a market.

Without that connection it’s difficult for them to be really effective, particularly when it comes to recruiting the right people and then being able to react to retention and development strategies that will make sure the right people remain in the business.

Where do you think that disconnectcomes from?

There is a detachment when HR becomes its own business within a business rather than being well integrated with the business units that are the sharp end of revenue creation.

What do you see as the key business priorities in which HR could make a more strategic contribution?

In the context of Ernst & Young, I would really like them to be focusing on how we can get a smarter, better strategy around recruitment for different components of our business. Making sure that we’ve got a continuous process that is getting the best possible business is important. Delivery must involve preparing people for projects, making sure that we’re giving them the right tools from an HR prospective, and that on delivery we get a proper debrief for what’s worked well and what hasn’t worked so well. Following this, defining the next challenge for those individuals through updating their competencies is essential.

So if we could get HR to focus on the day-to-day components that make us more successful in the market, that would be a strategic difference.

An important part of it lies in ensuring HR is not always one department sitting on a floor of a building and that they have a much stronger connection with the business unit that they’re either handling recruitment for, setting up HR processes, or doing learning and development.

What do you think holds HR back from contributing to the business in a strategic sense?

Strategically, it is important to have the right skill set. You do need to have the right base skills, so if you’re to be effective in recruitment, the HR process, or learning and development for instance, it is important you have people who have credentials of the right skill set. But that’s only half of the story from my perspective.

The second half is HR need to live and love their business. If they do that then they are fully engaged and it makes them much more effective.

There is often a bit of cynicism from line managers who have historically not had a good experience with HR. Would you say thats true or not?

Yes, I think that is true. I think there would be a lot of cynicism about the value that HR can bring to the table for the business. I think many businesses take on a lot of the HR issues themselves and that gives rise to a whole lot of duplication, reinvention, and probably not the best skills being applied to the issues. As businesses become cynical or disconnected with HR, they try and take on tasks themselves which defeats the purpose of having HR professionals.

How well does HR work with you at Ernst & Young in achieving business priorities?

In the part of the business that I operate, which is the Advisory Consulting Business, we have an HR group that really listens to our needs, that don’t reinvent things. I would say that they’re working very effectively. We are a bigger organisation and a smaller part of a bigger organisation. I think they’re leveraging the bigger organisation well and bringing to bear the elements that will work for us.

HR has traditionally been personnel and transactional administration focused. How can they overcome that past history and bring a new skill set to the function and get that credibility and respect of the executives?

I think the best way for them to get engaged at a strategic level is to be part of one organisation that’s delivering whatever the products the organisation has to the market in the most effective and efficient way.

In our business, HR is a huge part of that –we’re a people business. But they can only do that, and get over the back room image if they are engaged in the business strategy and if they understand it. Things I like seeing are HR professionals that have our business unit strategy plastered around their desk; they know what the fundamentals of our business are, what our message of the moment is and they keep up-to-date with what it is we are pushing in the market.

I think they need to engage firstly at a strategic level so they understand it and then remain tactically current as to what the emphasis is in a particular week or month.

Whats been your experience in other countries about HR? Is it fairly similar to your experience here in Australia or different?

No, this is the best HR experience I have had, and I’ve had many during nearly 30 years of business –this would be the one that I have most enjoyed. The thing that I find they’ve done differently, and have really contributed to, is recruitment. They’ve set up a really good process which involves a minimum of four touch points for every candidate.

The case management of those candidates is also really careful. It is the question I ask everybody who joins and we’ve had 80 new staff in the last eight months, and I ask everybody who joins what their recruitment experience was. And it started off strong, and has become stronger.

We get very good critiques back from people who have joined our organisation and gone through that process. We’ve involved a channel to market headhunters, referrals, as well as direct advertising in newspapers, and even with multiple channels we’ve managed to get a really strong process that is capturing people’s interest and then managing them through to a successful conclusion.

Prior to coming to Australia and Ernst & Young, was it a matter of HR having to convince you that they had the credibility and knowledge to contribute in a meaningful way to the business? Were you cynical before that?

Yes, they did somewhat have to convince me of their worth as I imagined I was going to have to invent most of the strategies myself. It is something I have an interest in and it is something that I have an enthusiasm for and I’ve got a passion for getting the right culture and values. For me it was a really important thing that we got that right.

The bit that was unexpected to me was how well the HR group – here we call them people and culture – were able to contribute to that. They’ve brought most of the skills. They had to take my ideas and turn them into reality and they’ve done a fabulous job of it.