Five Reasons HR Should NOT Report to Line Management

March 17th, 2008 by hragitator | Posted in General HR |

For the past decade or more, there has been a significant push in both academic and professional circles to transform the Human Resources function from an administrative unit into something more strategic. HR needs a "seat at the table" is the battle cry. HR needs to become a strategic partner. Some even took it to what seemed to be the next most logical step - have HR report directly out to line management. What better way to become strategic, then to align yourself directly with the business?

While I wholeheartedly support this metamorphosis for HR, I have to disagree with the last step that so many companies have taken. In fact, I strongly disagree with the idea of HR reporting out to line management. So, here are my top five reasons why this should never happen:

1. Line managers don’t know enough about Human Resources. Most managers I’ve worked with don’t know much about HR at all. Some think they do, but those usually think they know everything. The simple truth is that most managers were engineers, salespeople, marketeers, or in some other function before they came into management. It just doesn’t make sense. Why put a person in charge of something they know nothing about? Not just that, but many line managers have grown to dislike HR due to prior experiences.
2. It creates a conflict of interest. Let’s face it, whether HR ever becomes strategic or not, they will still have to be the enforcers and policy police. Someone has to do the dirty work, and it will always be HR. If HR is supposed to be protecting the business from illegal activity and lawsuits, why would you put the most likely offenders in charge of HR? A person is almost always going to do what their boss says first, whether they’re in HR or not. Don’t be surprised when the HR person helps the boss cover something up when they should have been exposing it. Not reporting to the line gives a much needed buffer.
3. It divides the HR function against itself. You now have two kinds of HR people: line HR and "back office" HR. Since they don’t report into the same person any longer, they’re effectively at odds with one another. Line HR wants to pay over the market value to get the best candidate while back office HR wants to maintain a responsible salary structure. Line HR wants to create a job titling system specific to their function while back office HR wants a global standard titling system. I could go on, but I think you get the point. Where they used to work together, they’re now butting heads. Why? Because of the conflict of interest I mentioned above. HR didn’t become strategic, it simply gave the line a formal complaint system. Instead of providing strategic guidance, HR became the lackey.
4. It creates fiefdoms within HR. Once you open this floodgate, it’s hard to turn it off. When you allow the line to take full control of HR, they do what the line does best…expand and bloat. When line HR can’t get it’s way with back office HR, what do you think they do? Compromise? No way! They just create their own back office. That’s right, when compensation doesn’t give you the salary data you want, you simply propose that you need your own compensation person during the next budget. Then, you need your own recruiter when the back office doesn’t send resumes soon enough. Then, you need a training specialist who can focus on your groups specific needs. Before you know it, you have redundancies and bureaucracy galore.
5. It actually weakens HR’s position at the most senior levels. In reality, this approach gives HR a smaller seat at the table at upper levels in the organization. Because there are now multiple fiefdoms of various sizes throughout the organization and each line function has their own HR team, it becomes increasingly difficult to leverage your resources for change or gain agreement on the appropriate action. Why would the line agree to assist in a corporate HR initiative that they disagree with? They have their own HR department that they can do what they want with. It opens up the opportunity for undermining and sabotage.

The thing that frustrates me the most about this approach is that it’s simply not necessary. A good line HR person should be able to do all the things they’re doing when they report to the line without actually reporting to the line. All the change in reporting does is create the problems I’ve described above.

My recommendations for creating a more strategic HR are the following in no particular order:

• Rotate your HR employees into line positions to help them gain experience, so they can really know how to be a strategic partner.
• Rotate your line employees into HR positions so they can better learn and understand what HR is trying to accomplish and why.
• Maintain a strong reporting structure within HR and simply assign employees to work with the line.
• Be more assertive in making recommendations on strategy. Don’t assume that what the line wants is what’s best for them.
• Start slow and build credibility with consecutive wins until you’re sought after. You should earn your seat at the table, not have it given to you.

Its easy to get caught up in trends and consulting advice, but sometimes these things get carried away. In this case, what started as a call to arms ended up as a Pyrrhic victory.