The Insider Guide to Careers
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Soon, most HR leadership roles will vanish. This is not only driven by the evolution of AI but also terrible attitudes that HR has encouraged for a long time within their own ranks. In 2014, the top CEO coach Ram Charan wrote an article in HBR in July 2014 about how it is time to disband HR. In his words, “It’s time to say good-bye to the Department of Human Resources. Well, not the useful tasks it performs. But the department per se must go.“
He may have been a tad too early. However, the changes in the business world happening of late has made this bleak scenario very likely. I have worked in a bunch of top MNCs and interacted with many CHROs. Here are some threats to the HR function.
1) Finding the balance: The key role of HR is to be an employee advocate and be a bridge between Management and HR. This requires them to understand both sides really well and sometimes lean towards employees in critical scenarios. In a David vs Goliath fight, employees trust companies only when HR sides with them. In one of the companies I worked in, it was ranked as the number one workplace to work in the US. This happened because of a strong leader who spoke her mind, wanted everyone in HR to speak their mind and someone who really cared about employee welfare. Everyone knows how to spot a faker. HR always ends flat on its face when it aggressively promotes only the management perspective to the detriment of the employees. Nobody trusts them. When HR loses respect, the entire company suffers. Each manager then creates their own fiefdoms and further ruins company culture.
2) The role of AI disruption: HR leaders love creating PowerPoints and actively doing program management. This week, I was reading about a top MBB consultant making slides completely with ChatGPT and having the gall to present those slides to a top 50 MNC CEO. Sooner or later, leaders will recognize that paying extraordinary billing rates for ChatGPT output makes no sense. It is not only consulting companies which are devaluing themselves but also HR. AI can make more fancy slides than any human will. I knew a HR executive whose only claim to fame was to make PowerPoint decks. She rose to become a leader just based on this single skill. Only in the world of HR can such nonsense happen, and this is why the function is prime for disruption.
3) Technology backwardness: HR is the last to adopt technology. Most leaders are very old and hopelessly out of touch with technology. One of the reasons why I got promoted four times in 6 years of work in the US was that I was the rare engineer in the space of HR. Many HR folks struggle with numbers, data, regression analysis and even Excel modelling. It has become a haunt of low caliber students who hated numbers in high school. Such an aversion to numbers is bound to backfire one day, as every function is increasingly being measured with metrics.
4) The recruiting nightmare: Nobody knows how to recruit employees. I am not kidding here. The current model of interviewing is cumbersome, expensive, long and has a validity of around 50%. This means that the entire interview process can be replaced by a coin toss. The interviews introduce bias, incorrect measurement and insufficient calibration along with asking questions which are not connected to workplace performance. Interviews are a charade, and no company wants to call the bluff. Everybody wants to pretend that a lot of care is put into the recruiting process. Recruiting should have been completely replaced with AI a long time back. Lack of cooperation from recruiters who do not want to lose their jobs and software programs that create their own bias are the reasons why all innovation has been held in this space. It is only time before a startup disrupts this space completely. Recruiting careers are in thin ice. They act as if they know a lot, but for no fault of theirs, end up delivering substandard talent to the business. Somebody will question this model soon.
5) HR Attitude: HR has a huge attitude problem. I have seen HR business partners bully the business leaders into toeing the HR line. In one of the companies I worked in, HR would make business decisions including whom to layoff. This led to enormous conflict where business hated HR but were frightened to voice it. This balance of power cannot last. In the best companies I worked in, business leaders assumed responsibility for business decisions, not HR. I have seen that every single HR leader who crosses the invisible line gets laid off, sooner or later. Along with this some companies also have a cozy culture where nobody questions status quo. Everybody in HR acts like they are part of a large, cozy family where members mix their personal and professional lives. I have not seen this nonsense in top tech companies where the focus is always on the professional front and personal lives are nobody’s business. When personal and professional lives intersect too much, work performance dips. There is also revulsion towards outsiders who want to shake up the culture. Nobody from inside wants the cozy insider culture to change in any way. In this case, what is good for HR is bad for the company?
6) People connect: HR leaders lose touch with employees as they rise to the top. The work of creating PowerPoint decks for SVPs and CHROs will be replaced by automation. Program management can easily be done by a top business program manager, a VP need not do the job. Why then have a HR VP? HR has to do soul searching and find a place for themselves in an increasingly uncertain world. The role of HR business partners and centres of excellence will always remain. The generalists and specialists will be required as long as people are around. Every people case is different. The problem begins when the people connect component is lost. The number of senior HR roles focused only on reactive actions with little value addition to the business will decrease considerably in the future. I foresee most HR folks in their fifties being jobless and out in the street, because they charge a lot of compensation for little real value added. This is in opposition to top software or product management folks whose value increases dramatically with time.
In addition, many HR leaders play a lot of politics and get identified too strongly with some leaders. They lose their neutrality through such actions. The dangers are that whatever happens to that business leader also impacts the HR leader in the same manner. A top executive consultant from Spencer Stuart was telling me that the life of a CHRO is about 3-5 years. When CEOs change, the CHROs change. Their career pretty much ends there. Whatever the HR leader makes in that 3-5 years is the most they will ever make. This is not much to boast about compared to other functions. Few HR executives manage a great second career, showing how cloistered their earlier job was. They have few real skills that they bring to the table.
7) One trick pony: I see a lot of opportunity for cross-functional folks to enter HR and make a viable career. The career HR folks gave little value to add. Currently, HR has become a function to shore up gender diversity numbers. As US companies come under increasing cost pressures in the future with competition from Chinese and Indian companies, social justice may take a backseat compared to financial pressures. There will always be pressure to increase revenue per employee ratios. Generally, HR always got a free pass because HR would go around generating lists of whom to lay off. They were sympathetic to their own mind. As automation kicks in, HR will be increasingly under the scanner as every other function.
8) Value creation: There will always be a need for great people leaders, domain experts and trusted people consultants for every leader. HR will never vanish. As long as there are people, there is infinite complexities of employee issues. All of this needs HR support and supervision. However, all of this can be done at junior levels at senior manager and below. There is little value addition when HR folks get into director and executive positions. The premium for promotions does not match the incremental value that HR provides. This is a red flag. One can argue that all support functions like HR and finance have the same problems, because they are non-core. I argue that Finance can still escape the AI impact because the finance jocks help move budgets in ways that are described as creative. Finance helps the business leaders meet the pressures of quarterly earnings and annual earnings in a way HR does not. This is why HR is the last sacred cow left standing.
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