Article: Does HR need a consulting arm?

#HR Industry

Does HR need a consulting arm?

Be it a service or a product-based organization, competition is omnipresent and the top of the mind solution that most business leaders come up with is cost-optimization.
Does HR need a consulting arm?

Experts predict that organizations shall soon resort to a setup wherein most of the HR functions will either be outsourced to a third party or to an AI Bot. Whatever be the case, the Business Advisory role of Human Resource cannot be ignored with the advent of technology or over-reliance on outsourcing. However, when we talk about Business Advisory, it is a phrase that varies in meaning and further varies in practical understanding from organizations to organizations. To be a good Business Adviser, Human Resource Managers need to be able to read the Business Reports with equal proficiency, if not more, as their business counterparts.

Most organizations follow the hub-and-spoke model for designing and implementing their HR interventions, which somewhat looks like this: HR Centers Of Excellence (COEs) co-create an OD intervention along with the Business Leaders and Regional HR Business Advisers (RHRBAs). Post designing, the implementation down the level is planned and the baton is passed on to the RHRBAs to cascade the intervention down the line. 

Unfortunately, what remains amiss in such models is that not all HR folks (COEs + HRBAs) may equally be competent in understanding the Business terms and reading the Sales reports. Not just the business terms and reports, the HR needs to be able to decipher the industry trends; understand the benchmark practices of the competition or even have a fair idea of the Socio-politico-economic environment in which the organization operates. The reason for this lack of wisdom could be plenty: prioritization of work, unequal distribution of responsibilities, ad-hoc assignment of projects, dynamic requirements of the leadership team or even at times the People Agenda of the organization not syncing up with the business priorities. What this results into is an initiative that was designed with the best intent, fizzling out as the cascade begins or the intended message getting diluted down the line. 

Be it a service or a product-based organization, competition is omnipresent and the top of the mind solution that most business leaders come up with is cost-optimization. Although the mindsets with respect to HR being just a hygiene function have changed rapidly over the last decade, most organizations are still grappling with the problems of traditional mindset with respect to HR being a cost-incurring function. While setting up a consulting division within the HR function may invite counter arguments with respect to additional cost, it seems like a probable solution to address the bigger problem of maintaining the sanctity of an HR intervention which can have a long-term impact on the organization's sustainability.

By setting up a consulting arm of the HR department, we are inviting free thinkers and researchers which work on the complete analysis of the data related to the industry trends, it's operating environment & competition and the benchmark practices while advising the internal stakeholders (including RHRBAs) on matters related to its people. Some of the advantages of this are further listed down below:

  1. It helps in giving the CHROs that extra edge during the Steering committee meetings.

  2. HRBAs and COEs will have more disposable time and a ready reckoner of well-researched data to support their discussions with business leaders.

  3. HRBAs are able to connect their responsibilities to a larger cause.

  4. Develop the research capability of the HR function through internal movements to and from the Consulting arm.

  5. Be an employer of choice where the HR talks business data while being empathetic to its people.

  6. Publications by the HR consulting arm will encourage researchers to delve into the nuances and suggest well-researched solutions for extant problems.

  7. Further enhances the credibility of HR as a function.

Topics: HR Industry, Life @ Work

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