Article: Why should best caliber students choose HR

Strategic HR

Why should best caliber students choose HR

Whether you want to build your career in HR or not, choosing HR as a specialization for your MBA can provide you with competitive advantage. Here’s why!
Why should best caliber students choose HR

The dearth of talent in HR makes this career stream most attractive for high caliber students, it provides an opportunity to be unique and eventually could lead to faster growth.


This week I was in IIM Ranchi interacting with the bright students in their HR program, a full class of 80! As I met Prof. Gaurav Marathe, OB & HR Chair at the school, he shared that “this is the only IIM that has an exclusive HR program.” It is one of my personal aspirations to finally break the historical bias against the HR function and it seems that I am not alone, the universe is conspiring to making that happen: management gurus from all over world claim that talent strategy is the primary factor of organizational success; studies around the world claim that Human Capital is the #1 priority for CEOs; number of students choosing an HR specialization in their MBA is increasing (taking IIM Ranchi’s case alone their HR program intake has grown from 30 odd last year to 40 this new fact); and, interestingly, the cut off scores for students opting for HR, is getting closer to the average General Management PGPM students.

Here are some reflections about why high caliber students should seriously consider to choose HR as a specialization, whether they want to make Human Resources their career or not, having a strong HR foundation can enable them to be differentiators and have a competitive advantage for all aspiring business leaders. Let’s have a look at them:

1. For the 1st time in history, ever, 'people' are considered to be finally the Number One lever for organizational success. Collins, in his book ‘Good to Great’ talked about “get the right people on the bus” and “first who, then what”. Talk to any CEO or entrepreneur, clearly if you don’t have the right people in the right places, with the right talent strategy and the right structure to enable them to achieve their organization’s goals, you ain't going too far with any business idea. This is truer today than ever before, companies are struggling to build a strategy for the future as so many variables are unknown, so the only lever and differentiator that business leaders can influence is the quality of people they hire and retain. At this moment, this argument goes beyond going from good to great to actual survival. Just as the Industrial Revolution did a century and a half ago, the digital revolution is changing everything as we know it and our business landscape is getting transformed. 52% of Fortune companies are gone since the year 2000 and the average age of the S&P 500 company has gone down from 60 years to 12 years since 1960. It is people, and only people, who can take such disruptions and turn it into opportunities, who can connect the dots and innovate, who can make the difference between success and failure in such a dynamic and unpredictable business context. If the people lever is at the center-stage of organizational success, that’s why HR is the place to be! Choosing to do HR in your MBA specialization will help you early in your career to build the right foundation. Disclaimer: the people practices that business needs today are beyond the traditional ‘business as usual’ HR, which takes us to the next argument.

2. HR is business. A recent article published in the Harvard Business Review had Ram Charan, Dominic Barton and Dennis Carey suggesting that the role of the CHRO is being transformed radically. They claim that CHROs should help the CEO by predicting outcomes, diagnosing problems and prescribing actions. Predicting outcomes relates to having access to information related to people, internal and external, that can predict company’s performance and most importantly competitor’s too — need to have a ear on the ground if your own on who is doing what, how likely they are to be successful and hiring movements that can predict competitive moves (for example when Apple started to recruit Motorola’s technical people and what it meant to changes in the phone market dynamics). When it comes to diagnosing problems, the truth is that most problems are people’s problems so clearly the CHRO can work with the CEO deciphering its causes. And finally, prescribing actions or solutions on the people side that will solve those problems and add value to the business, from judging people, to assigning the right roles, to understanding what motivates different individuals etc. Judgment on people is a special skill for the CHRO as the CFO needs to make inferences from numbers. HR is the Big Rock for businesses today and not many CHROs are able to fulfill these new expectation. More high caliber students choosing HR will mean more talent pool for this critical function and this is badly needed, that takes me to the next argument.

3. Less Competition! The dearth of talent in HR makes this career stream most attractive for high caliber students, it provides an opportunity to be unique and eventually could lead to faster growth. One may argue that saying there is ‘dearth of talent’ in HR is an overstatement but here are the facts: Headhunters estimate that only 2 out of 10 CHROs today can play the role with the expertise CEOs expect as per the People Matters CHRO Study 2015. One can see this as a reality on the daily newspapers and the number of CHROs reshuffling that has been happening. Last month Prabir Jha, CHRO of Reliance Industries quit and will be joining CIPLA next month, same month Vedanta Group HR head Rajesh Padmanabhan also resigned; Krish Shankar, Phillips HR Head for South Asia business may be reportedly joining Infosys as its global HR head. Earlier this year Madhavi Lall, moved out from Accenture after a nine-month stint and has joined Deutsche; Ganesh Chandan left Avantha ERGO Life Insurance and joined Suzlon Group; Somnath Baishya moved from Adobe India to Intuit India; Rohit Sandal joined Lenovo from Dell and the list goes on. This is a clear signal of the number of unfulfilled open positions in the market and the lack of sufficient talent pool, an opportunity for high caliber students to be taken.

4. Learning HR is a Quadrant 2 Activity. We have agreed to the conclusion that HR is critical for business but it is also true that one of the reasons why organizations don’t spend enough time in it is because HR is a Quadrant 2 activity. As per Franklin and Covey methodology, Quadrant 2 activity is defined as important but not urgent, as opposed to the Quadrant 1 activities that are urgent and important, that always take precedent like could be for example revenues, client deliveries, etc.  The point we are trying to make here is that even as a student, learning sales and client delivery will happen when the time is needed, but you will probably will not find the urgency to learn HR (unless you consciously plan it) because it will be important but not urgent in your career - especially if you choose not to do HR in your career. If you choose to become a general manager or specialize in another business function, people will still be a priority for your team to succeed, but building your own skills and capabilities on HR will take a back seat and other skills like sales, client management, project management etc will take precedence. All of them are important, don’t get me wrong but one knows that Q1 activities may tend to take precedence. Whether you want to continue in the HR stream or not, if HR is an important foundation and it will be difficult later on to build those skills as they will not have the same level of ‘urgency’ then it is reasonable to say that one should take at least more HR subjects, if not a complete specialization, during one’s MBA. Our experience and interactions with CEOs and CHROs shows that getting HR right is a two way street, while one could say that CHROs are not there yet in terms of business exposure and the capabilities needed in the new context, CEOs and business leaders too need to understand they are key stakeholders in the strategy and implementation of HR interventions. So it is as true that HR needs to learn business as much as the CEOs need to learn HR - do that early in their career!

5. Is HR the new path to CEO? Do you want to become a CEO? Ellie Filler, senior client partner at Korn Ferry, and Dave Ulrich, a University of Michigan professor claim that except for the COO (whose role and responsibilities often overlap with the CEO’s), the executive whose traits are most similar to those of the CEO is the CHRO. They studied proprietary assessments administered by Korn Ferry to C-suite candidates over more than a decade and examined scores on 14 aspects of leadership, grouped into three categories: leadership style, or how executives behave and want to be perceived in group settings; thinking style, or how they approach situations in private; and emotional competency, or how they deal with such things as ambiguity, pressure, and risk taking. Filler and Ulrich brought a provocative prescription: More companies should consider CHROs when looking to fill the CEO position. There we go. If you want to be a CEO, then here is an alternative, a new untraveled path. If in the new business scenario attracting and retaining talent is the #1 lever for organizational success then experience as a CHRO makes a leader more likely to succeed at those tasks.

Here are some of the reasons, and you may be thinking that these are all fine but eventually the CHROs get paid less than other peers at the C-Suite. Well that was true before but not anymore! CHRO's average compensation (Total Cash Compensation) increased by 45 per cent in the last five years from an average of Rs 55.5 lakh in 2010 to Rs 80.6 lakh in 2014 as per Mercer Executive Total Remuneration Survey captured in the People Matters State of the CHRO 2015. The peer group at the C-Suite also growing at a similar rate, CFOs total compensation has moved from Rs 62 lakh to Rs 92 lakh (up by 48 per cent) and CMOs total compensation from Rs 57 lakh to Rs 87 lakh (up by 52 per cent). 

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Topics: Strategic HR, #ExpertViews, #HR Ready

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