“Take my 20 best people and virtually overnight, Microsoft becomes a mediocre company." - Bill Gates

HR-A Strategic Partner:
There has been significant talk about the potential of HR as a strategic partner to business, and there is ample evidence that business leaders are increasingly willing to invest in that potential. HR is seeing itself at the management table more often than ever before. If market compensation levels are an indicator, the fact that HR professionals at middle and senior management typically command a premium over their peers in other functions further illustrates this trend (Refer table 1.1). The role of market demand and supply is the obvious explanation for the recent spurt in HR salaries. Significant however, is the very fact that business leaders are today willing to pay that premium for a job that was traditionally thought to be responsible for only the operational aspects of hiring, retaining and firing employees.

HR Talent- Is there enough?:
The unfortunate truth is that in spite of what has been observed, barring a reasonable share of exceptions, the profession is far from realising its potential. One of the primary reasons for this is the acute shortage of talent, both in terms of quantity and quality. Only a handful of the premium business schools in India today provide specialisation in HR as opposed to an economy that is adding lacs of employees every year, while requiring one HR professional for almost every two hundred employees. (Refer table 1.2 and table 1.3). It may be incorrect to assume that good quality talent comes from only premier business schools. Equally contentious is the assumption that HR is typically not the preferred career option for management graduates.

Measuring the HR Function:
This brings us to a ‘chicken or egg’ situation; HR cannot reach its peak till it gets its required inflow of high quality talent and it will not get its share of that talent unless it creates new benchmarks of its own performance. Mediocrity is reasonably prevalent and equally tolerated in the HR profession today. It is not just a question of the quality of talent in the profession, but also a factor of the lack of proper performance focus. While the quality and performance of its human resources are key contributors to an organisation’s success, there are few measures that are being ‘quantitatively’ linked to HR.

Booming demand for talent:
At the same time, the economic growth that is creating the escalating demand for manpower is also impeding the performance of the scarce population of high quality HR talent. The unending race to meet hiring numbers (made larger due to high attrition) leaves little time for HR to focus on other areas. (Refer table 1.4) Inefficient execution of simple operational tasks on the part of HR leads to loss of face with the business. Moreover in many organisations, HR is still seen as a purely operational job. HR managers in these organisations seldom feel the need, leave alone get the opportunity to understand business. Hence, there is little value they can add in making strategic decisions. This leads to a second chicken or egg situation where credibility will not come without performance and the required performance cannot be achieved without credibility. Another fallout of this is the lack of focus on developing people management capabilities. Promotions to managerial jobs are often provided without proper evaluation of people management capabilities. People managers should play an equal role in understanding employee issues and resolving them, whereas HR is being blamed for all employee cribs, ranging from the food in the cafeteria to the organisation’s philosophy of paying at the market median. It is therefore imperative for HR to focus on people management capability development.