There’s been a lot of reaction to the concept of ‘best practice’ in HR over the last few years – the idea being rejected primarily because no-one can identify what these best practices are, nor is there much (if any) evidence that they work. As a result, the alternative ‘best fit’ model has gained in popularity.
Superficially, best fit has much to commend it. Our HR practices are adapted to the size, sector and most importantly the strategy of our organisation. The approach that might be taken in a large corporate services business is not the same as an SME in a manufacturing sector. But we need to take care.
One of the most well-known best-fit theories (Schuler and Jackson 1987) suggests that when a business is cost-sensitive, HR’s approach should be to control and reduce costs. This means not just keeping wages at the lowest level to attract qualified staff, but also using very tightly defined job roles (so there is no scope for ambiguity or employee discretion), using ‘precarious’ labour (what we now tend to refer to as the gig economy), little or no training and development, and short-term performance goals. Ryanair is often cited as the ‘classic’ example of this approach in the UK.
The dangers of this approach should be obvious – and if they aren’t then yesterday’s article in the Financial Times, which exposed the working practices in the garment industry in Leicester should be top of your reading list. Taken to its extreme, it leads to unsafe working conditions, below minimum wage levels and exploitation on a large scale.
“But what can we do?” I can hear many HR professionals saying. After all these businesses won’t have HR. But our ‘just legal but arguably unethical’ HR practices do lead to other companies taking the next step across that line. And with little current enforcement of regulations it’s all too easy to get away with ignoring basic employment law.
It is, as Canadian HR writer Jane Watson describes it, a “Wicked Problem” – and demands the same approach she suggests to tackling it. HR can’t solve the issue on its own, but neither can we pretend that we are not partly responsible for this state of affairs.
A common cry among HR people is that they are ignored or dismissed within their business. It’s something that in my 30 years in HR has never gone away, and forms a staple of many an HR conference. The “how do we get a seat at the table” discussion has outlasted almost every topic or fad that the profession has debated.
For me, one of the problems is that, while HR people moan to each other about not being taken ‘seriously’, we rarely ask our colleagues, who are after all our customers, what it is they want. But, after 18 years, working with a wide variety of organisations in widely diverging industries and sectors, I’ve come to the conclusion that what most want from HR is
· To keep them legal – that means having a good knowledge of Employment Law and related regulation.
· An understanding the business and its objectives, and the ability to devise solutions to problems that achieve this.
· Good professional skills that no-one else in the business can provide – whether this is recruitment, employee development, handling a complex union negotiation, or an individual issue.
· Someone who will remind them that they are dealing with other people. It’s very easy for managers to become focused on the task and forget that other human beings are involved. Pointing out the human consequences of a business decision isn’t being a “bleeding heart” – it allows better long-term decision making and planning.
· Looking at ways things can be done, not reasons why they can’t
· Someone who brings in expertise and knowledge from outside that can ‘add value’ to the business they are working for.
Now, I’ve never conducted a formal survey among the 125+ organisations I’ve worked with, and this view is purely based on my perceptions. So I’d welcome comments from businesses – and other HR people. Perhaps if we better understood what business wants, we might finally know how to earn the mythical seat at the table.
What is it about recruitment that allows managers to do stupid things that would probably get them fired if they tried it in any other part of the business?
A recruitment website has recently been touting the “Top 10 toughest interview questions” it has come across, suggesting that “job candidates … should be ready to answer any question” in an interview.
Really? Such as How many people born in 2013 were named Gary? (No. 8 on the list). Which of course might be a relevant question if a knowledge of useless trivia is a key requirement of the job. (Anyone who works for BT, who used the question, may be able to confirm if it is essential to know this to work there)
Or how about How many hours would it take to clean every single window in London? (No.4) I suppose this is possibly relevant if you’re running a commercial window cleaning business with the objective of creating a monopoly in the capital. Less so, I would suggest, for tech people in IBM.
Or this one If you were a fruit, what kind would you be and why? (No.2) I can’t even begin to suggest how this might be relevant to any job, let alone a Trip Leader with a Travel company.
Recruitment is a two-way process. Not only are you assessing whether a candidate is right for you but they are deciding whether your business is the right one for them. Idiotic questions like this tell candidates one of three things:
- Your managers don’t know what they are doing
- Your managers enjoy humiliating and tricking their staff (and your company culture condones this)
- The decision making processes within your company are fundamentally flawed if you have appointed such people to positions of authority
(Oh, and similar “clever” recruitment tricks like this one are just as bad for your reputation)
By all means ask tough and challenging questions that are relevant to the job. But unless you want your managers and your organisation to look completely ridiculous and laughable, drop the smart-alec questions, tricks and tests from your recruitment process.
Apart from working with small businesses, I’m also a CIPD Tutor with one of the UK’s leading HR training providers. Quite often when doing some of the more “theoretical” stuff, I can see learners’ eyes glaze over with a “what has this got to do with the real world and my job as an HR business partner” expression.
But the practical application of some of these theories and models is frequently key to many HR and business decisions. For example, what we rather grandly like to call “environmental scanning” – with models such as STEEPLE, Five Forces and Blue Ocean – is essential to anticipating likely changes that may affect our organisations.
Take for instance George Osborne’s “National Living Wage”. Judging by some of the reactions from some business organisations, this is the greatest disaster to hit business for years. Yet businesses have worked within the minimum wage rules for nearly 20 years and the “shock” of this new policy was that – for many – it was an unexpectedly large increase. But any business which had done any kind of serious forward planning would have been aware that all the parties at the last election were committed to significant increases in minimum wage levels – not necessarily for altruistic reasons but as part of the strategy to reduce the deficit. (I’m happy to say that a client I work with in a low pay sector had factored in big increases to their wage costs into their business plans as a result of doing some of this planning, so it hasn’t proved as much of an issue for them).
HR professionals continue to agonise about how they “add value” to businesses. Being aware of what’s going on in the wider world, and anticipating how this might affect the companies we work for, is one easy way in which we can demonstrate that HR is actually a vital part of modern business.
Last week I needed a taxi to Lime Street station in Liverpool at 530am, so I tapped an app on my tablet and within 5 minutes a car was outside my front door. Chatting to the driver he told me that he chose the hours he worked and he tended to work 5 in the morning till around 230pm as it allowed him to pick up his children from school. As we pulled up at the station he pressed a smartphone screen on the dashboard to accept his next job from the taxi firm.
Was I using Uber, the “disruptive” firm that is now apparently the world’s largest taxi company? No, simply the same local firm I’ve used for the last 20 years. Their drivers are all self-employed, use their own cars and pay a weekly “settle” to the firm for the work that is pushed their way. Probably the only difference is that the company still operates a small office so that if you are not smartphone savvy you can ring for a taxi.
Which is why when I saw this graphic being tweeted it brought a wry smile to my face.
I think we’re meant to think “wow, aren’t these companies radical and different?” But in truth, they aren’t. What they have done is to use technology successfully to minimise costs and to trade more easily across international boundaries, but otherwise they are little different to traditional models.
Let’s look at some of the others. Facebook – “creates no content”. Neither do most cable/satellite TV channels – they are simply media platforms which generate income by selling advertising. Where does Facebook get most of its income? Advertising.
Alibaba – well here’s how it works: you pay them a fee to have a presence on their site and then sell your goods. Sound like a giant fleamarket or car-boot sale? That’s because that’s what it is. Markets don’t hold inventory either.
Airbnb – back in the 90s I used to get a brochure for “Rural Holiday Cottages”. Some were people’s homes they’d let out for a couple of weeks, some were renovated farm buildings, but they were all available to rent for a week or fortnight. Rural Holiday Cottages charged a fee to advertise them but didn’t own a single one. Again, the Airbnb model – they just operate on a global scale
And what’s this to do with HR? Well, if business isn’t really changing – merely incorporating new technology – then the skills, knowledge and practices that HR people should use probably haven’t really changed either. We may need to react faster and jettison some cumbersome procedures (and perhaps even use new technology) but the fundamentals of good people management remain the same.