It’s Time to Make the HR Function Valuable Again

The shifting workforce management landscape prompts important questions about the value of the human resources function in government. In their recent Governing column, Katherine Barrett and Richard Greene said, “Many governors no longer look to human resources for advice on their workforce.” The message could not be clearer—these leaders do not believe HR is meeting their needs.

The question is: Where do these leaders turn for that advice? HR executives should work to make certain they are seen as valued advisers and problem solvers. It’s also possible that leaders see workforce issues as unimportant.

Workforce management has been a hot button in the private sector, where it is seen as a source of competitive advantage. In contrast, there is little support in government for broad initiatives to tackle workforce problems. It’s in addressing those problems, however, that HR can add value.

In this era of diminished resources, it’s fully appropriate for public organizations to question the continued reliance on and costs of HR activities, including the time managers spend complying with personnel requirements. Estimating those costs would be eye opening.

From a different perspective, payroll is the largest discretionary expense for government at all levels. Moreover, the mushrooming importance of knowledge occupations has raised awareness that skill and performance can vary widely depending on the way an employee is managed. Solid evidence shows innovative practices can raise performance levels significantly. That opens the door to discussions about organizations and their staffing levels, and about strategies to improve performance. HR should add value in those discussions, but personnel officials aren’t always invited to take part.

Value Versus Cost

Value is defined by the receiver or customer. That’s always true with products or services. In this context, HR professionals should identify their customers, develop an understanding of their needs, and develop strategies for satisfying those needs. The human resources team confirms its value when the employer benefits from HR services.

HR officials can accomplish this in three ways:

• Be open to and advocate innovative practices known to trigger improved performance.
• Serve as consultants to diagnose and solve workforce problems.
• Commit to improving HR programs and reducing their costs.

Despite the emphasis on evidence-based management in other functions, there have been few initiatives to evaluate the impact of HR on government operations.

It’s important to recognize that a significant portion of the HR budget is necessitated by statute or by program administration (e.g., processing retirement benefits). Personnel officials are responsible for assuring their agencies comply with merit system principles and related civil service requirements. The HR function has a statutory role in adjudicating appeals of personnel actions and protecting employees’ due process rights.

The commitment to compliance activities is driven in part by questionable decisions by managers. That problem reverts to another HR role—the selection and training of managers. Public employers have been largely unwilling to invest in the training and resources to minimize those problems. Perhaps the reason is that the argument has been based on cost rather than value—as is so often the case with workforce concerns.

The emphasis placed on compliance and program administration has another unrecognized cost. The individuals who are good at those jobs are unlikely to be successful in roles where problem diagnosis and change management skills are essential. The “program police” mind-set is to resist change.

Redefining HR’s Role

Government leaders need to decide what they want from the HR function. Any reconsideration should also encompass existing personnel programs. It’s become difficult to identify HR policies, practices or programs that contribute to agency performance—or for that matter to employee satisfaction.

Last year, consultant Ran Charan advocated in a Harvard Business Review article for splitting HR into two units. One would focus on administering HR programs, and the second would “focus on improving the people capabilities of the business and would report to the CEO,” Charan wrote. He said the goal is to enable HR professionals to “build the experience in judging and developing people, assessing the company’s inner workings, and linking its social system to its financial performance . . . After a few years . . . they would move to higher-level line management jobs.”

Charan’s idea emphasizes the importance of managing “people capabilities,” noting that program administration is not management. The staff of the “people capabilities” unit also would be expected to develop an in-depth understanding of business operations.

Government policies fail to acknowledge the importance of “people capabilities.” That makes everyone a loser. It should not be surprising that young employees aren’t attracted to government service.

The creation of a high-performance workforce depends on expertise in recruiting, selection, training and reward management. It also requires attention to a long list of management practices.

Building a productive workforce involves some tough problems—skills shortages, new technology, leader development, manager skills, diversity, lack of trust, among others—that can only be solved by knowledgeable specialists who are viewed as valuable resources by line managers. But unlike professions such as engineering or accounting, the absence of an educational requirement sends the message that anyone can do HR.

Federal leaders should consider how Charan’s proposal can be adapted to government and create units in each agency focused on changes that will improve the work environment and improve performance. Employees deserve better. The country deserves better.

Howard Risher managed compensation consulting practices for two national firms and has written four books, including Aligning Pay and Results. He has an MBA and Ph.D. from the Wharton School.

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