Higher Recognition ñ Getting HR on the board

Mark Carriban, Director of Human Resources at Hudson explains why HR will have to work harder to make the top table

ìOur people are our most important assetî. If I had a pound for every time a CEO uttered that phrase, I would be rich man. Unfortunately they rarely follow that by saying, ìAnd thatís why Iím promoting our HR Director to the BoardÖî

Why isnít HR more represented on the board? This should be a golden period for HR. We are continually told that we live in an age of talent. The service industry now dominates the UK economy and as that shift has taken place away from manufacturing, so the quality, motivation and retention of people have become more important to organisationsí bottom line.

Beneath the rhetoric, however, too many organisations still regard employees as ëcostsí rather than assets. I believe this is a dangerous trap to fall into. Increasingly, people will be the only source of long-term corporate competitive advantage. A well-motivated and loyal workforce really will be a companyís most important asset.

This is not hot air. A recent Harvard Business School study showed that a 1% increase in employee loyalty elicited a 0.5% increase in customer loyalty. This may not sound much but when, as in many sectors, a 5% increase in customer loyalty can lead to a 50% increase in profitability, for example, it becomes obvious why HR can be a driving force in improving the bottom line.

HR is too important to not be represented at board level, but clearly the profession will have to work harder if it is to convince stakeholders that it merits a promotion to the board.

As a profession, HR has had to do a lot of growing up in recent years. It is now more strategic and it is increasingly being seen as something that adds value rather than just a support function ñ but there is still a lot it must do to pull itself up the corporate value chain. For me, there are three broad strategies that the industry needs to pursue if it is determined to get that seat on the board.

No more navel-gazing
The HR profession, occasionally, falls into the habit of introspection. There is a danger that the issue of board representation has so gripped the imagination of HR professionals that it is in danger of shifting the debate away from where it should be ñ the positive business-case for strategic HR. Complaining about the lack of representation on the board could be interpreted as victim behaviour and damage the credibility of the profession.



This mindset should extend into other areas. What is the HR team reading for example? If the only answer is HR trade publications then how can HR claim to be operating at the heart of an organisationís commercial strategy? Perhaps new HR practitioners should be seconded to other business areas in order to understand how an organisationís people drive profit and the difference that a motivated workforce really makes to the bottom line.

The same can be said for HR directors. Should they perhaps distance themselves from the day-to-day process of HR and think more about how people can be best used to deliver the business models put in place by their colleagues in the boardroom?

Putting numbers beside the words
The other functions represented at the boardroom are judged on the tangible results their departments produce and measure. That has proved a hard thing for HR to demonstrate but a step along the road might be for HR departments to set out clear mission statements that outline more than just the nuts and bolts of the role.

Responsibility must lie at the heart of an HR departmentís mission. If it wants to be in the boardroom, HR must measure more than just activities such as positions filled, training hours delivered or appraisals completed on time. Real responsibility means measuring oneself against accomplishments that reflect true business success: productivity, churn and customer retention.

I am convinced that HR professionals will find getting the ear of a key strategic decision-maker on the board much easier if they can present tangible proof that their proposals will affect the bottom line.

Developing a strong HR brand
The effort expended on the above however will come to naught if it goes unrecognised within the organisation. HR professionals have to communicate to employees the value-added benefit the department offers. Yes, the performance of HR will increasingly be less about how HR performs itself, and much more about how HR has enabled and accelerated the performance of the business. But if no-one knows about it, then HR should not expect a promotion up the pecking order.

A seat on the board isnít a right that HR has been cruelly denied and there are other roles fighting equally hard to grab it. Much of what is written about HR is sadly often a veiled justification of its existence, loaded with a subtext of doubt. The profession should throw off these shackles and be proud to shout about its achievements. This could be a golden age for HR ñ letís be bold enough to seize the opportunity.