Is HR Running the Company?

I was conducting an employee interview for a large client when the employee asked, “Is HR running the company?” I responded, “I hope not.”

I think my response surprised him. He seemed to think that I would support the Human Resources (HR)-in-charge approach. I do not.

HR is a crucial part of every organization and should have a full-fledged seat the leadership table. However, HR isn’t designed to make all business decisions. Instead, HR should support leaders in designing people-centered business strategy, solving problems, and assessing risk.

HR has narrow authority but provides broad counsel.

HR authority – the power to say yes or no to an action or strategy – is limited to compliance with state and federal laws. These include, but are not limited to, the Fair Labor Standards Act (FLSA), Family Medical Leave Act (FMLA), Title VII of the Civil Rights Act of 1964 (discrimination and harassment), Title IX, Employee Retirement Income Security Act (ERISA), Occupational Safety and Health (OSHA) standards, and workers’ compensation laws. In this space HR must have the ability to protect employees and the company from the consequences of a failure to comply with these laws. This is HR’s narrow authority.

The majority of HR’s scope of work lies in advising and counseling leadership as a business partner. This responsibility is becoming more significant as employee recruitment, retention, and training and development increasingly drive business strategy. In order to get and keep a voice in decision-making, HR leaders must provide evidence-based advice that ensures business decisions are legally viable and people-centered.

HR teams have the opportunity to provide a uniquely people-centered approach to decisions. They often have key knowledge about team members and skills in people development, coaching, empathy, and relationship building that top leaders may not have or be focused on. HR leaders must value their ability to provide strategic advice over controlling outcomes.

There will be times when leadership does not follow HR’s advice. This will be frustrating. HR leaders must normalize this frustration by educating HR staff on the scope of their work – what are the areas of HR authority versus counsel. Then provide them with skills to productively manage themselves when their advice is not adopted. These are key strategies to ensuring HR professionalism and an effective business partnership.

If HR earns the trust of leadership there will be more times when HR provides a perspective that results in a positive impact on decision-making. Over time this influence, combined with successful measurable outcomes, will result in a powerful business partnership between HR and top leaders.