Perhaps the most quoted cliché in the corporate world is, ‘our human resources are our best assets.’ You would have heard this from every single professional who is perched on top of the organisation hierarchy. Every single financial statement across the globe, cutting through all cultural boundaries would have within itself a remark to indicate that ‘they believe their co-workers to be the most precious asset they possess.’ It does not stop here you may even find high sounding quotes of people who possibly may not have subscribed to their own thoughts adorning the walls of the corridors or the board rooms on this subject.
MANAGEMENT
Perhaps the most quoted cliché in the corporate world is, ‘our human resources are our best assets.’ You would have heard this from every single professional who is perched on top of the organisation hierarchy. Every single financial statement across the globe, cutting through all cultural boundaries would have within itself a remark to indicate that ‘they believe their co-workers to be the most precious asset they possess.’ It does not stop here you may even find high sounding quotes of people who possibly may not have subscribed to their own thoughts adorning the walls of the corridors or the board rooms on this subject.
Claims to being a humane organisation or to have HR policies that have as their foundation the emotion of empathy are belied day in day out, at the shop floor of these very organisations, and yet no one shies to state our ‘asset’ is our workforce.
But the fundamental question is, are they? You may want to answer by asking yourself, am I the ‘most important asset’ of my organisation? The struggle to find a solid ‘yes’ is understandable because the likely true answer may be a resounding ‘no’.
It is also a fact that in dealing with ‘humans’ it is near to impossible to understand ‘emotions’ which differ from one individual (asset) to another individual (asset). The clash of ‘emotions’ between this fundamental ‘asset’ is the dilemma of HR gurus. So, essentially being in the realm of ‘emotions’, the HR management turns out to be the most difficult management criteria to deal with.
Asset, in accountancy parlance, represents value if it meets the criteria of being realisable either now or at least in the future. If it is realisable readily within an accounting period, such assets without getting into finer accounting details are classified as ‘current assets’ and those that have permanence like land, building, plant and machinery are classified as ‘long term assets’.
All assets, barring land either depreciate, get amortised or deplete. Since HR does not have a value quotient it does not appear as an ‘asset’ on the balance sheet. Therefore the positive and safest measure is to assume it is a ‘long term asset’ that will neither amortise, deplete, or depreciate but would only appreciate. Against this backdrop, it would depend on every organisation’s own thought and dynamics, whether they consider HR as an asset or a blossoming liability!
If this asset is so critical, it demands more than mere lip service through pronouncements. It needs to be backed by visible action, to the assets ie human resources. A relatively newer cliché is ‘human capital’ (capital is always on the liability side of the balance sheet by the way; unless it is a loss making organisation).
This HR asset or liability also has at its roots the same meaning and unfortunately faces the same lack of attention and importance.
Culturally, in South Asia and particularly so in Pakistan usually the boards end up being defacto management and in its wake even takeover the HR function sometimes. Is the head of HR therefore in such scenario a sufficient person to look after ‘alone’ this intellectual asset or does he/she need to have a broad platform of support?
HR function, which boards and management classify normally as ‘cost centres’ are filled with professionals who will help hire people to create ‘profit centre’s… it is quite a paradoxical thought! A self-conflicting approach. There has to be a sea change in attitude. The paradigm, should be to consider HR division as a profit generating unit, so organisations should pay handsomely and hire the best HR professional.
In most Pakistani corporates, including family owned businesses barring a very few, there is no or scant value for HR policies. It is usually for them an exercise of matching and finding the best talent at the lowest cost. In many situations, some stupidity is never a handicap. It is scenarios like these where suddenly there is need and recognition for CEOs to enter the foray of misguided thought process.
When you have low talent HR residing in the organisation it becomes imperative for CEOs to do the nitty gritty HR work, inclusive of planning for and finding the right resource. Consequently, with no specialised training in HR they end up making severely costly mistakes; they look for finding HR solutions to their business generation problems and hence only further complicate the complexities of the matter. Open the corporate treasury chest and hunt down the most brilliant HR chief! The CEO can concentrate on business issues and regulatory and governance issues.
I know of CEOs who love to approve travel requests, medical bills, and entertainment vouchers, etc. Surely the most expensive resource is doing the most menial work.
There are also true Islamabadi situations of bureaucratic hurdles, where even if the CEO protests and does not wish to undertake these tasks; the board’s in their wisdom enshrine it in their approved policies (another matter that the authors of HR policies are HR division staff. Here what needs to be checked and nipped in the bud is the desire of the HR division to abdicate its responsibility).
The organisation structure should be the core responsibility of the CEO within the domain of the HR function. He must know those resources that are ‘critical’ and those that are ‘dispensable’. This is not to suggest that the ‘critical’ are not dispensable they equally are but their importance to business especially in the short term cannot be overlooked. In the long term, all ‘criticals’ can have back-ups developed. Hence the critical resources require greater attention. The first job of the CEO is therefore to create successors.
Reverting to the fundamental question should CEOs be HR managers, the answer in my view is, yes. The conditions attached to this affirmation is that within the context of overall HR function the CEO must restrict and involve only in the management of higher level of HR function like rotations (of criticals only), succession planning, compensation, planning, talent management.
Add to this getting involved in the induction of management trainees- only because they are most likely people to be the future shepherd’s of the corporate, herding the flock. This is more of ‘future management’.
Intelligent and forward looking HR heads would concentrate to see that through the organogram they keep a tight leash on the CEO’s time management. It must be the job of the HR head to make such organisation charts where the direct reports of the CEO do not exceed 8-10 persons. Anything beyond this is a sure recipe of disaster, for the CEO, in his allocation of time. And surely this will be to the peril of the organisation.
In some jurisdictions, I have seen the regulators putting up prudential rules, which essentially lead to the CEO becoming an HR manager, an IT expert, a compliance officer, and the most conscientious risk guru.
Every such regulation needs revisitation to develop clarity on the role of the CEO.
A cursory glance at the code of corporate governance requirements of what traits a CEO must possess will unfold to you the hunt for the most ‘endowed human’, a superman who is likely to possess super natural powers to have the kind of oversight demanded of him. What it however perfects is that the ‘oversight’ will most likely land into the terrain of ‘over-looked’.
No CEO can be unaware of where the buck stops!
The writer is freelance columnist
