With the Coalition Government making huge cuts in the public sector the role of the much-maligned HR manager could be about to enter a new phase. E&T talks to Jackie Orme, Chief Executive of the Chartered Institute of Personnel and Development.
You've got to feel sorry for the beleaguered Human Resources manager. Never a big favourite with other managers, the HR supremo has a reputation for being a corporate henchman, the slasher of salaries and the harbinger of all things doom-related. But are these stereotypical images out of date? According to Jackie Orme, chief executive of the Chartered Institute of Personnel and Development (CIPD), there's a revolution going on, albeit a 'quiet one'.
'We used to talk about hiring and firing people; now we talk about talent pipelines. When I worked with unions it was always about the balance of power; now it's about engaging your workforce. It used to be about Christmas parties and inductions; now we talk about employer branding.' The shift in the profession that we are part of has been huge, she says.
Industry's key gripes about HR can be summarised in terms of costs, which represent a big factor, followed by the impact in the past 13 years of the avalanche of regulations and legislation cascading from government departments. Finally, HR people, with their palpable enthusiasm for 'soft' skills, appear to have little interest in business or strategic issues.
'Most corporate HR teams are not great,' says Brent Oberman, co-founder of Lastminute.com. 'They are inflexible and can't respond to packages required for the new world of work.'
Archie Norman, former head of ASDA and now chairman of ITV, is more scathing: 'The trouble is that the HR profession is a menace. They bring with them a process. They flaunt at you regulations all the time. That's their trump card.' Sir Mike Rake, chairman at BT, recalls his time at KPMG where only 9 per cent of partners were women. He blamed his HR department, saying: 'HR is so important it should not be left to HR professionals.'
Former Granada CEO Sir Gerry Robinson raises another complaint, namely that 'HR has a tendency to get involved in things that don't contribute as they should at the sharp end'. Eric Daniels, CEO at Lloyds Banking Group, has a solution that may have escaped other bosses. 'HR professionals,' he says, 'need to be drawn from a commercial background or rotated through roles, so that they truly understand the reality of the business.' There are a lot of comments like this.
In defence of HR, Graham Campbell, who heads his own corporate services recruitment consultancy, says: 'HR people are good facilitators, honest and prompt and they get things done. But HR is generally not a fast track route to the top. There are exceptions where a really good commercial HR executive can end up either on the board or as a CEO. Companies want people who are commercial and profit conscious.'
HR in demand
Ironically, can the coalition government, as it tackles large-scale budget cuts, offer a new window of opportunity to the HR profession? 'For successful change we need HR skills,' says government adviser Sir Peter Gershon. 'Such skills come increasingly at a premium when the public sector is under pressure of reduced budgets. It's those people who are dealing with difficulties such as maintaining morale, making difficult downsizing decisions or potentially outsourcing - these all require HR skills and a high level of professionalism.'
Jackie Orme agrees. 'The government is taking on a daunting turnaround proposition,' she says. 'They take over a public sector workforce facing mass redundancies, frozen pay and a significant paring back of pension benefits. But they also come armed with a truly ambitious agenda for change - an agenda they'll be expecting that same public sector workforce to deliver.
'To drive through a change agenda of that magnitude,' Orme argues 'would test the people management capabilities of any organisation.' Orme wonders if the public sector has the exceptional people management skills needed. And, she adds: 'There's a battle to be waged about how cuts are made, how people are treated and how to do it in a way that does not leave lasting damage, but something that works better.'
A feisty leader, Orme was appointed to her position two-and-a-half years ago. After graduating from Birmingham University, where she read modern history and politics, she worked briefly for the Department of Employment and for the Institute of Chartered Accountants. She has 17 years experience in senior HR positions in the steel industry in South Wales - where she had to close a plant - and with Texaco and 15 years at PepsiCo.
Her tenure at the CIPD has not been without its detractors. She has been criticised for her generous salary and bonus at a time when the CIPD reduced its headcount as the recession hit and training budgets were reviewed. This was undertaken despite her publicly urging other organisations to find alternatives to headcount cuts as a way of reducing costs.
Professor Cary Cooper of Lancaster University Management School noted at the time of the controversy about Orme's bonus: 'In general, I think if senior people have taken a bonus, no matter what sector they're in, at a time when other people are losing jobs, or peoples' salaries have been frozen, or costs are going to be cut dramatically, they should give it back. Just give it back, it's not worth it.' The counter argument is that these bonuses have been negotiated as part of a salary package, and if the conditions have been met for its payment, then what's it got to do with anyone else?
No stranger to controversy, the real question is how does Orme make the case, how does she get the case for HR to critical industry sectors? 'We are here,' she says 'to help organisations deliver performance through HR, to help HR professionals navigate increasingly diverse and demanding HR careers, whatever stage they are at and whatever level they are aiming to reach. During the last year we have consulted widely and completed the largest assessment we've ever undertaken of the detailed needs and requirements of the HR profession.'
Maximising value is what Orme hopes to help HR achieve in business. But in her position, can she deliver value to the CIPD in the first place? Her board has set her a number of clear financial and non-financial performance targets aligned to the Institute's strategic objectives.
'I am confident we have charted a course that will build a profession demonstrably better equipped to face the future and a CIPD equipped in the same way,' she explains. 'I'll be judged on my performance, which is exactly as it should be for me. It's also exactly the way HR professionals will be judged by the business leaders they serve.
'We need to be clear what membership of the CIPD means. HR is a very broad Church. We are not like an accountancy body. HR comprises seniors and juniors, specialists and generalists and career HR professionals, as well as those from other disciplines.'
In her view, HR is an applied business discipline and should comprise individuals who see themselves as business people who understand the way people and organisational factors affect success. 'HR can influence areas such as building culture and developing leadership to deliver sustainable performance, but it needs effective execution.'
Her aim at the CIPD is to shape a stronger, more confident profession including a complete update of CIPD qualifications, with the focus shifting from HR knowledge to business knowledge. 'We need to be clear what membership means,' she says. 'Having different routes enriches the function. We had a system that said 'there's no home for you here'. That view is old-fashioned and outdated.'
'The CIPD is Europe's largest HR and development professional body. As a globally recognised brand with over 135,000 members, we pride ourselves on supporting and developing those responsible for the management and development of people within organisations. We know what good HR looks like and what HR professionals need to know, do and deliver at different stages of their career, be they specialists or generalists, in the UK or internation.'
Last year the CIPD embarked on a substantial research project into the changing nature of' HR and some of the best and emergent practice work that HR functions are engaged in to stimulate debate about how it will develop over the next five to ten years.
'We wanted to know how thinking and practice is evolving and whether our viewpoints are reflected in the real world. Hence we engaged in research in organisations with emerging best and next practice.' Organisations taking part included BT, Cambridge County Council, Cancer Research UK, McDonalds, Nationwide, Shell and Tesco.com. Interviewees included HR directors, chief executives, managing directors and executive board members.'
For Orme, the challenge is to set a new 'gold standard' for the profession. Not long after her appointment she told the HR Directors Club at a networking dinner that HR is in the middle of a quiet revolution, that the profession had come a long way in the past 20 years, but still had far to go. 'The HR profession is at a point of inflection, and when I look back I see a profession that has changed a huge amount but has a huge amount of change to undergo. We are in the unique position at the CIPD to make a real difference to business performance. Most business leaders now recognise the crucial role of the people agenda in building a competitive edge.'