Lauren Weber and Rachel Feintzeig, in a piece for the Wall Street Journal, examine an emerging trend of employers replacing their human resources departments with outsourced personnel management firms and even software programs that perform basic HR tasks:
Companies seeking flat management structures and more accountability for employees are frequently taking aim at human resources. Executives say the traditional HR department—which claims dominion over everything from hiring and firing to maintaining workplace diversity—stifles innovation and bogs down businesses with inefficient policies and processes. At the same time, a booming HR software industry has made it easier than ever to automate or outsource personnel-related functions such as payroll and benefits administration.
From those who have had terrible experiences with an HR office, I can practically hear the (understandable) cheering. Eliminate HR, and you’ve taken care of the problem.
But it’s not that easy.
In fact, Weber and Feintzeig go on to examine the functions that may fall through the cracks by closing down the HR office, including ensuring that managers comply with employment laws and resolving interpersonal disputes between employees.
In a post for Workplace Prof, law professor Charles Sullivan (Seton Hall) largely concurs with the assessment of the potential downsides:
While outsourcing many of the mechanical operations of HR is much easier today with technological advances, it remains true that both managing “human resources” and complying with the law requires a more sophisticated understanding of both than a typical outside firm can provide.
The real culprits
Long-time readers know that I can be hard on HR, especially HR offices that are complicit in advancing bad, unfair, or abusive management practices. But when it comes to acknowledging the importance of an in-house office charged with implementing employee relations policies and practices, I see the HR function as essential.
Good HR offices serve a valuable training, compliance, and mediating role in the workplace. They do so with a much better understanding of the organization’s people and culture than any outside firm could provide. And they can troubleshoot issues over pay and benefits better than any software program.
Bad HR offices, by contrast, are often tools (negative connotation intended) of bad executive leadership. HR offices may get the lion’s share of blame for poor handling of employee relations, but in reality they may simply reflect and advance the values of their equally terrible (or worse) bosses. Show me a nasty HR director and I’ll show you the organization’s nasty CEO.
In some workplaces with lousy top leaders, “rogue” HR officers with conscience and heart may serve a mitigating presence by helping to stave off or soften the impact of bad personnel decisions and practices that reduce morale and increase liability risks.
As I’ve suggested before, to get to the core of what makes for a good or bad place to work, we typically need to look higher up on the organizational chart. The character and values of those at the top commonly dictate the kind of HR office that you can expect to encounter.