As a Human Resources Director in a previous life, I was interested to read an article proposing that the HR department as we know it should be scrapped.

The author’s suggestion is to split HR into two separate functions; one focused on administration and reporting to the Chief Financial Officer (CFO); the other focused on Leadership and Organisation and reporting to the Chief Executive Officer (CEO).

The motivation behind the author’s thinking, as I understand it, is to address the perception that many HR professionals are ‘process-oriented generalists’ and that too few have the business acumen needed to help organisations perform at their best.

Whether or not that assertion is true, I agree that the number crunching aspects such as compensation and benefits would sit very well under Finance, allowing HR Directors to focus on improving the people capabilities of the business and linking company culture and climate to its financial performance.

I’ve seen many instances of blurred lines between Finance and Human Resources, in the nature of the work and associated responsibilities; and this is often the result of political positioning. That’s a shame because it has a negative impact on company performance.

The skill of a true HR professional lies in their ability to understand and develop people; to ensure the right fit between employees and the job they are being asked to do and to be able to advise on the talent implications of the company’s strategy.

If HR’s specialism is people then it’s a broad one to say the least; no other function has dealings with all departments in the management of an employee’s life-cycle with the company. They really are being all things to all people which inevitably results in a more tactical operation.

Stripping out those activities that are a better fit within Finance enables both departments to focus on their areas of special interest. It would require closer working relationships between peer groups; and the FD would have to see compensation and benefits as a mechanism for attracting and retaining the best talent, rather than as a major cost to the business.

Might be worth a go don’t you think?