Are HR departments necessary?

Ask Google to respond to that query and it returns, in short, Yes.

Any number of articles will appear as to why it is a good idea to have an HR department. Reasons against an HR department are fewer and harder to find. Until now.

Let’s be clear: HR should go. There is almost nothing that the HR function does that cannot be handled by a combination of direct management, self serve technology or outsourcing for occasional special needs, such as matters of employment law. On the other hand, there is much damage that can be done by HR, most particularly to culture. HR cannot create a culture. But HR can damage culture.

Back to the results of our Google search. It will state the case for HR roughly as follows.
1. HR is an effective talent management function for attracting, recruiting, retaining and sustaining employees.
2. HR prepares, maintains and implements consistent policies and procedures.
3. HR ensures employees feel safe.
4. HR is the consistent communicator across the business, and across all levels of employee.
5. HR manages confidential employee data, personal records, pay and benefits, performance appraisals etc.

Well yes perhaps, but those are duties, tasks and functions. They are not in themselves reasons that a business should have an HR function. Those duties could be fulfilled in other ways, couldn’t they?

If you want proof that internal HR functions are not necessary, talk to employees of businesses that do not have an HR department. In my experience, their views will be overwhelmingly grateful for not having HR.

So what is going on? In the old days, by which I mean say 25 years or so ago, HR was more commonly called Personnel. Does anyone remember the Dire Straits song “Industrial Disease” which had the line: “there’s a sneak in Personnel”. Management of employee records was the primary function. The administration of pay and benefits typically fell to Finance. Recruitment was limited to placing advertisements and arranging interviews. Employee hiring and firing may have been facilitated by Personnel but the decisions to hire and fire were always made by the head of the relevant team or department in conjunction with a number of more senior decision makers depending on the seniority of the role. External consultants would be used for executive recruitment and matters of emloyment law.

Over the subsequent years, Personnel was rebranded Human Resources. Also developing was HR technology so that an increasing part of the employee record keeping and performance appraisal systems were digitized, outsourced to a passing cloud and, through a cascading system of data, employee performance would be assessed by direct discussion between manager and employee with the results accessible up the management chain. Pay and benefits administration moved almost fully to outsourced self serve technology platforms.

So HR had more time available and styled itself as one of the most critical functions of business, a real partner to senior management. Critically, HR staff and executives viewed themselves as a purveyor of the corporate culture.

Through a remarkable collaboration across all businesses, HR invented policies aimed at changing culture. It must have been through social media, cocktail parties and HR lobbying groups that the plans were hatched. Hence Corporate Australia was obviously not diverse or inclusive or equitable (the DIE initiative). Employees had to be retrained. If any employees resisted, that would be treated as proof of their unconscious bias. If you doubt my assertion that this was a collaboration, ask yourself why it is all businesses with HR functions appear to toe the DIE and unconscious bias line to the letter and why businesses without an HR function ignore it?

This is the damage that HR has wrought – a culture war. Largely free of the obligation to do the work of Personnel, HR attracted employees with a personal desire to import cultural ideas from, in their view, a higher source. I have experienced more bias among HR types than any other kind of employee and it’s real, a conscious bias, not one of those unconscious biases that many people have been accused of.

Corporate culture differences still exist but they are less different today than they were before and they continue to erode, particularly in the bigger businesses. In the businesses that do not have an HR function, I think you will find the employees happier and the culture will develop and adapt according to the history of the business, its successes and failures, its clients and the attitudes, characteristics and behaviours of senior managers, middle managers, team leaders and so forth. HR’s time to go is long overdue.