I was at a talk in Denver recently, hosted by tech staffing solution BWBacon, stacked with speakers whose talks were on the theme of disrupting the status quo in HR practices. Interesting idea – while there have been tons of serious innovations in HR, staffing, and payroll processes in the last few years, nobody has really heard about them – and one talk struck me as particularly insightful. The speaker explained that in her business, the person responsible for controlling their labor cost outflows wasn’t an HR person – it was an analyst from their financial department.
It’s definitely food for thought. There’s a certain intuitive disrupt-y-ness to it: getting the important money decisions out of the hands of those fluffy HR people and over to the professional money-people. I bet you could even drum up some fun-sounding rationalizations about using technology to change a landscape, or making “data-driven decisions“ about something or other.
I appreciate the attempt to innovate in the area of human resources but I think that this attitude fundamentally misunderstands the role of a good HR person.
...Click the link below to read more
It’s definitely food for thought. There’s a certain intuitive disrupt-y-ness to it: getting the important money decisions out of the hands of those fluffy HR people and over to the professional money-people. I bet you could even drum up some fun-sounding rationalizations about using technology to change a landscape, or making “data-driven decisions“ about something or other.
I appreciate the attempt to innovate in the area of human resources but I think that this attitude fundamentally misunderstands the role of a good HR person.
...Click the link below to read more
A well-utilized HR person, especially one in a position to influence hiring and firing and therefore one in a position to influence payroll costs, is so integrated into the company culture that he or she is better-equipped to fill jobs at the company than anyone whose primary motivation is to seek the lowest possible payroll outflow at all costs. This attitude also assumes that the firm’s primary HR problem is spending too much money on the people it hires, rather than finding the right people for the job.
Think about it this way. A whopping 40-60% of the average publicly-traded company’s net outflows go to payroll. Is this because they aren’t doing a good job hammering down wages? No. Macro-scale market forces are actually very good at that on their own. How much a person with a certain set of skills and experience will cost can be predicted with relative precision using publicly-available information that can be retrieved from state and federal labor force data. The simple truth is that putting together strong and reliable financial information about your payroll costs is just not that hard and your payroll provider probably has cheap turn-key solutions for any data you’d like to gather already in place.
The hiring decision should be thought of as the point where one is willing to make a certain investment in the right person for the job. That hiring decision will fall within certain predictable error bars around an average cost for any given set of skills and experiences no matter how many accountants you set to task on fine-tuning that number. A finance person may be useful in giving you information about your payroll costs, but the truth you will likely discover is that the payroll number is not much more mysterious than the fact that people (and their health insurance, and their retirement investments, and their training, and their office space, etc…) are expensive, which is why you should make pretty sure you’re getting the right ones!
Your HR person is that person. Many companies do not even have an HR member in the C-suite, and this I think is a grave mistake. How is HR supposed to select the right people, with the exact right skills, temperament, and cultural fit, if they are not represented at the point of strategy-making? Perhaps this is because they are often thought of as nothing more than the company therapists who also run payroll.
If the people making hiring and firing decisions at your company are so distant from company decisionmaking that they can be replaced by accountants, you are bound to end up with the wrong people in your company - which means that, on average, 40-60% of your total outflows are spent on known mistakes.
This is not the right attitude for any leader of a company that wants to grow, especially one who values talent, and who depends on the skills and experience whose aggregate is the total success of the company.
Think about it this way. A whopping 40-60% of the average publicly-traded company’s net outflows go to payroll. Is this because they aren’t doing a good job hammering down wages? No. Macro-scale market forces are actually very good at that on their own. How much a person with a certain set of skills and experience will cost can be predicted with relative precision using publicly-available information that can be retrieved from state and federal labor force data. The simple truth is that putting together strong and reliable financial information about your payroll costs is just not that hard and your payroll provider probably has cheap turn-key solutions for any data you’d like to gather already in place.
The hiring decision should be thought of as the point where one is willing to make a certain investment in the right person for the job. That hiring decision will fall within certain predictable error bars around an average cost for any given set of skills and experiences no matter how many accountants you set to task on fine-tuning that number. A finance person may be useful in giving you information about your payroll costs, but the truth you will likely discover is that the payroll number is not much more mysterious than the fact that people (and their health insurance, and their retirement investments, and their training, and their office space, etc…) are expensive, which is why you should make pretty sure you’re getting the right ones!
Your HR person is that person. Many companies do not even have an HR member in the C-suite, and this I think is a grave mistake. How is HR supposed to select the right people, with the exact right skills, temperament, and cultural fit, if they are not represented at the point of strategy-making? Perhaps this is because they are often thought of as nothing more than the company therapists who also run payroll.
If the people making hiring and firing decisions at your company are so distant from company decisionmaking that they can be replaced by accountants, you are bound to end up with the wrong people in your company - which means that, on average, 40-60% of your total outflows are spent on known mistakes.
This is not the right attitude for any leader of a company that wants to grow, especially one who values talent, and who depends on the skills and experience whose aggregate is the total success of the company.
RSS Feed