Monday 19 November 2012

HR - more big hats, cattle no more engaged or productive

Talk about finding sixpence and losing a shilling. Just as I rejoiced at no longer having to watch archive footage of Jim’ll fix it!, while channel hopping I discover that an updated version of Dallas is on TV. Little has changed. Once again JR Ewing is dismissing a rival as being ‘big hat, no cattle’, talking a lot but lacking money, power and influence. This reminded me that the same phrase has often been used to deride the HR profession, so I decided to take a quick look at what’s been happening to the size of HR hats and what effect this might be having on the ‘cattle’ they're responsible for.

On the conventional Labour Force Survey measure just over 0.4 million people are currently (Q2 2012) employed in HR and development roles in the UK. This narrow figure encompasses HR directors, managers, trainers, and administrators. The figure doubles to around 0.8 million if payroll and wage clerks are added but people doing these jobs are often considered finance rather than HR staff.

The narrow HR total is 83,000 higher than in 2001. The number surged by almost 100,000 to a total of 450,000 in the boom years to 2008 before falling in the 2008-9 recession, settling at 432,000 in 2010. But the number has since recovered to 437,000 despite the 2011-12 recession and widespread back office job cuts in the public sector. Although occupational classifications changed in 2011 the effect of this on HR was simply to reclassify some HR director roles to HR managerial roles and to separate HR administrators into a specific occupational sub-category. This led to a sudden statistical drop of 28,000 between 2010 and 2011 in the number of senior HR staff and a corresponding jump in HR managers and administrators. However, the number of senior HR staff bounced back sharply between 2011 and 2012 with a 22,000 increase to a total of 136,000, 17,000 more than the equivalent figure in 2001.

The number of ‘big hat’ HR honchos is thus around 14% higher and the level of HR staff in general almost a quarter (23.5%) higher than in 2001.  The share of HR in total employment has likewise increased from 1.3% to 1.5%. This is great news for the HR profession but is also somewhat disconcerting. While HR employment has increased considerably in both absolute and relative terms in the past decade this hasn't had any discernible effect on outcome measures of things one might expect HR to have a positive influence on.

Surveys suggest that the average rate of what is now fashionably called ‘employee engagement’ has flat-lined in the UK since this began to be measured in the early 2000s. Growth in labour productivity meanwhile has, as we are constantly being told, been even more disappointing. It might be argued that things would have been even worse had we not created more HR jobs but on the face of things HR appears to have offered a smaller bang for the buck in recent years.

HR professionals rightly call upon organisations to adopt better people management practice in order to raise levels of employee engagement and boost productivity. But in doing so HR must also demonstrate that it is genuinely adding value to organisations and is not just a compliance or administrative function.  The UK has a lot more HR hats and a lot more big and high paid HR hats, yet the ‘cattle’ are no more engaged or more productive. Before the HR profession points the finger of blame about poor workplace performance it needs to explain why its own influence appears so ineffective          


  1. Companies will certainly benefit from automated employee hiring system

    Automated onboarding

  2. My employer recently took on a full-time HR administrator. It now means that the production managers no longer have to deal with recruitment and employee issues so you could say that the value of the new HR department is in allowing the production managers to focus more on sales and productivity.

    I can't say this has happened, or even that anyone is measuring it, but the specialisation it delivers should be cost-effective even if no-one notices.

    1. It's nonetheless disconcerting that this doesn't show up in the productivity stats