Human Resource Knowledge

HR Managers or Outsourcing Managers? : Rise and fall of HR

Luta Gorak Manuers Limited (LGML) is a manufacturing and logistic services company with nearly 2500 employees. It has a history of successful performance in the field of manufacturing chemicals, fertilisers and also as a logistics management company for over the last two decades. With 25 HR staff it almost has a record number of HR Managers (HRMs) @ of one for every hundred employees. Most of the Senior HR Managers who built up the company in the past were considered as leaders and CEO material. They worked hard and interacted with employees and often were taken from line jobs to HR with some bridge training. Some of them have become even SBU heads, Directors, and CEOs of the company in the past.
Over a period of time as the company became a profitable company, made a mark in the corporate world and expanded its HR also gained prominence and was being cited by others as a bench-markable company for its HR. It was largely known for its recruitment, training, induction process, performance management, and succession planning and leadership development. With passage of time as HR appears to have become more and more specialised, the company started recruiting qualified HR professionals at senior levels from outside to keep their HR practices quite updated and in tune with times. Some of them were recruited from reputed Management schools specialising in HR. slowly the pressure on the HR to perform started increasing. As focus of most organizations shifted in early part of the century beginning 2001 to Talent Management, Employee Engagement and retention became primary issues. As young HR managers specialising in HR got promoted and became General Managers, Senior Vice Presidents, Vice Presidents, and Assistant Vice Presidents they started perceiving their role differently. The President HR decided to reorganize HR. He himself was a recent recruit from another company that did not have any great HR practices. In the absence of finding any internal talent to head HR, and considering the increase in specialisation of HR, the company decided to recruit the new President from outside. It took two years for him to begin to understand the organization. As he understood the organization, he decided to make his impact by reorganizing the HR function. He divided the HR into eight sections and appointed a VP or AVP to handle each of these functions. He managed to get a few of the AVPs on promotion from line jobs to HR as it has been the policy of the company to post line managers in HR. Now three of the Sections are headed by qualified HR M Managers from outside the company and five from those from line jobs. Now in the company the 25 HR Managers are divided into eight separate departments: Recruitment and sourcing, Learning and Development, Employee Engagement, Performance Management, Career Management and Development, HRIT, Employee Relations and Administration. He created a sense of competition among the managers.
Now each Section Head (VPs and AVVPs etc.) Started competing with each other in appointing consultants. Over a period of time the company became highly procedure oriented as they took some of the top level persons from Public sector. Today they have appointed seven consulting parties: Besides a number of agencies for recruitment, one consultant was appointed for PMS, one for competency mapping and HRIS, another for succession planning and career development, another for compensation and linking PMS with Pay, another for employee engagement and so on. Slowly the role of HR got redefined in the company. Now the HR Heads are busy preparing tender documents, inviting consultants, involving line managers to assess the consultants, negotiating with consultants, appointing them, clarifying their requirements, articulating their requirements on the basis of consultant views and benchmarks, coordinating their interviews with line managers, booking their travel and stay of consultants, getting the consultant who arrives to talk to the line managers on succession planning, employee engagement etc., monitoring their work, examining their reports, communicating extensions of contracts, and getting the consultants to summarise for implementing their recommendations etc. Slowly the entire HR departments and the function were relegated as out-sourcing managers.
None of the HR managers did competency mapping which is supposed to be the main job of HR department, did not design and manage appraisals which used to be an important function of the HR. Now the company is being run by consultants and HR Department acts as consultant to the consultants. Their main job is to facilitate the work of consultants. The company is run by consultants and the job of HR Managers is redefined as follows:
“Professional qualified in HR with an understanding of various systems of HR including competency mapping, competency based recruitment, competency modelling, ADCs, 360 Degree Feedback, Leadership development and succession planning, PMS and PRP, OD, knowledge of SAP, People Soft and such other IT application to people management processes, employee engagement and the like, great place to work and the like. The HR Specialist should have knowledge of consultants and consulting firms that offer world class services in the area and should have the capability to get the best consultant to help the company design and redesign the various HR systems to the changing world of Business and take the company forward. The person should have the ability to assess the appropriate ROI in appointing consultants and be able to coordinate with them, monitor their performance and make them accountable in terms of delivering what has been stated in the tender document correctly.”
One of the premier Management schools specialising in HR found this to be trend of most organizations and have decided to appoint a committee to re-examine and reformulate their curriculum. In this management school earlier the Masters in HR students used to have 50% of the courses devoted various Management functions including production, marketing, Information systems, Finance and accounting besides various HR courses. The newly appointed course after visiting some of the companies like LGML decide change their curricula according to time and has recommended reducing the 50% of the management courses to 20% and introduce 50% new courses to keep up with the changing nature of industry. Now the course mix is proposed as: General Management courses - 5, Networking and understanding of “Big Five” and other consultants - 5 courses, Tendering process and preparation of Tender documents and other competitive bidding - 5 courses, Networking and widening of Net works - 5 courses, Vigilance and management of vigilance and vigilance without pain - 5 courses, HR Interventions and Basics of HR - 5 courses, Management consulting companies and consultants to beget best results - 2 courses, Succession planning for line managers with the Consulting firms, Competency mapping and competency models of “Big Five” - 2 courses. As this reputed institute started revising the curricula, on hearing about the new innovative curricula the big five offered to this Institute Chair Professorships in different areas to promote the new curricula.
All of them seem to live happily thereafter as they all discovered a very new way of keeping people busy and occupied, each pursuing his/her own mission effectively with the help of others. LGML continues to make profits and better than even before thanks to a highly HR oriented top management who decided to let the HR do what they are good at doing.