Who's on the board?
The diversity of the workforce should be reflected at the most senior level. It’s true that almost all businesses need an ultimate decision maker, but the reason most companies are run by boards is that people able to look at problems from different angles tend to come to better decisions than any individual could.
For that reason, most companies tend to fill their board positions with execs and non-execs who cover off multiple areas of a company’s activities. That’s why finance, law and marketing are regularly represented on boards. While these functions are undoubtedly vital to any business, the people charged with ensuring what is generally a company’s most important asset – its people – are rarely considered to be very important themselves.
Where are all the HR professionals?
In research we conducted this spring, we found that less than one per cent of FTSE 50 board personnel have an HR background. Of the 595 board members in these companies, only five had worked in HR. And it’s not because HR professionals are few in number. The latest annual survey of hours and earnings shows there are currently 77,000 HR directors working in the UK, compared to 207,000 finance directors and 129,000 marketing directors. It’s clear HR is seriously underrepresented at board level.
Of the privileged five professionals with HR experience who have made it to board level, the most prominent is Vittorio Colao. The CEO of Vodafone was in his time at McKinsey & Co responsible for recruitment. Last year, his salary rose by £66,000 to £2.7 million. The next highest director with an HR background was Clare Chapman of Kingfisher, who received £510,000 last year. Among the five FTSE 50 board members with HR experience, the average salary rose by 6% in the last 12 months, up by £49,000 from £813,000 to £862,000, according to the companies’ most recently published annual reports.
In a company which employs more than 80,000 people, it’s hard to argue the experience of looking after recruitment is not of value in Mr Colao’s current role. But given the almost complete absence of HR experience in the upper echelons of corporate management, it’s unfortunately unlikely it was decisive in his appointment.
Are you working in an HR bubble?
The problem isn’t just felt among HRDs who are looking to make the step to the top table. In a survey conducted during the last recession, it was revealed almost one in four HR professionals stated they feel undervalued at work.
At the root of the issue is that HR people are too frequently seen as low skilled, not connected to the issues that matter to the leaders of a business, but only to their own HR bubble. There's a sense in some parts of the corporate world that HR functions deal in grim necessities which have little relevance to the work of the company and should be avoided as much as possible. Given that human capital is the lifeblood of any successful business, this represents a fundamental corporate problem.
Exponents of the view that HR is no more than an administrative task suggest HR professionals are guilty of sitting in an ‘HR bubble’, where jargon and spurious testing begin to obscure the more important ways of assessing candidates which matter most to the employer’s bottom line. It’s all very well telling someone they're doing brilliantly because they’ve shown improvement in their interpersonal skills and time-management, but if the effort has sent their results down the plughole, the company has a problem. If you’re looking to reach board level, it’s also worth remembering you would be liable for signing off company financial reporting and so, it’s essential to show you have this string to your bow.
Conduct in-depth analysis
In some cases, complaining about an ‘HR bubble’ is undoubtedly a fair criticism, but it’s actually a neat way of working out whether you’re a good or bad HR practitioner. There are two main ways in which you can add value to a company through HR and they both reward those who do their best to avoid falling into the usual HR traps.
First, you can take a leading role in identifying which skills a company requires in its employees to ensure they fit with the corporate culture and are able to deliver results.
Second, you should show you’ve made a clear analysis of who offers the most value and how to reward them. Doing this successfully means you are showing a far-reaching strategic vision. Whatever you do, try to avoid using jargon and being blinkered in your role. As an HRD, if you don’t understand all the facets of a useful and sustainable employee, the HR department you run will become isolated.
Be aware of the wider business
Unfortunately, the numbers speak for themselves and we can’t expect employers to start pushing HR up the agenda unless they are provided with a reason to do so. You must be prepared to innovate and actively demonstrate your ability to add value rather than just executing the jobs you’ve been given efficiently and quickly.
You need to be able to show you’re au fait with the wider interests of the organisation you work in. When hiring new staff, this means you should show you can select candidates who can demonstrably deliver business results. There’s no place for meaningless jargon. If you can produce clear recommendations based on real information you will be the one to stand out.
Focus on employee development
Equally, when reviewing employees, it’s important the process doesn’t feel like going through the motions. Rather than simply writing a list of things to work on, you should actively find new ways to train employees and improve their business value. If you do this, you will be demonstrating you are taking a leading role in developing the business.
At board level, the top jobs require not only an outside-in view of an organisation, but also total command of financial data and analysis. Unless you can show you possess these skills, you will be overlooked. You can’t count on your company to change its attitude to HR overnight, but you can demonstrate the value you can add and by doing so demonstrate why it was wrong to treat HR as a back office afterthought.
Time for change?
If you feel your value to a company is more as a first barrier to the deluge of CVs that large employers receive, rather than as a value-adding strategic part of the business, you have three options:
- If you’re looking for an easy life, you can accept your status and sit tight.
- But if you want to show what you and your department are capable of, you can work to demonstrate that it’s possible for HR departments to shape the way companies work. You should try to develop a distinctive and productive culture which is directly relevant to the ongoing success of the company. Even if these efforts aren’t successful, taking action to show you can add value will let you know how flexible your employer’s attitude to proactive HR can be.
- If you’re disappointed with the outcome, it’s always open to you to seek alternative employment in an organisation where the attitude to HR is less closed.
Get to grips with data
While board members are chosen to fill certain skills gaps and provide a full view of an organisation, all board members need to have a thorough understanding of financial data and analysis – so if you want to get to the top you need to develop and demonstrate this skill.
Demonstrating why your job isn’t just a tick-box exercise is essential in any discipline. That’s why changing the corporate perception of HR is something any ambitious HR professional should work hard to achieve. In fact, in a world where businesses face increasingly complex and varied challenges, it’s more important than ever.