The Management “M” in NO MAN'S LAND 4 M’s framework addresses the importance for an emerging growth company of building a high capability, professional management team that can institutionalize the talents and efforts of the entrepreneur. Translating this objective into practical terms means asking: what is the role of the Human Resource (HR) function in a mid-market business?
Human Resources or Talent Management?
The answer is that HR for an emerging growth company requires two very different skill sets.
HR operations or administration (HR Ops) demands a technical set of skills – it is data driven, has compliance and reporting requirements, often involves IT knowledge and demands strict adherence to deadlines. Talent Management on the other hand, is often referred to as the ‘soft side’ of HR. Here, the skills needed are closer to those of a psychologist – scrutinizing candidates; understanding leadership team dynamics; behavioral interviewing; designing leadership development programs and building the corporate culture.
It is very difficult for a mid market company to find an HR professional with the array of talents outlined above. So what is the CEO of a growing mid market company to do? Can he afford to pay for a top notch, experienced VP of HR?
Separate HR Operations And HR Management
One alternative is to split the workload by separating HR Operations from HR Management. This allows the company to maximize the focus on the areas of HR that are in most need of attention. It also enables the alignment of the available skill sets with the functions to be performed.
Combine HR With Finance/Accounting
There are several alternative approaches a mid market business can take to manage HR Operations. In some organizations, the finance/accounting area can take on HR administration – especially if they are already managing payroll. Many of the administrative functions in HR are aligned with the payroll process (such as onboarding, benefit enrollment/elections, compensation changes, etc.). Although some training may be necessary, the skills associated with accounting are closely aligned with those of an HR administrator.
The Outsourcing Option
Another alternative is to outsource HR administration. While you may be able to reduce costs, you should definitely be able to improve efficiency and reduce risk. Several years ago, HR outsourcing was only available to the jumbo employers with 10,000 or more employees. There are now many different service models available to middle market employers - ranging from individual program outsourcing (payroll, 401(k), health, etc.), to Professional Employer Organizations. It may take some analysis to sort through the alternatives; but the convenience, cost, and efficiency may be well worth your while.
HR/Talent Management: Alternative Approaches
The HR Management side is more strategically important, and more challenging. Offloading it is usually not advisable. Organizational design, talent development, succession planning and managing the corporate culture are all key to getting out of No Man’s Land. In fact, the talent management function should be involved in all strategy and growth initiatives. If a full time professional VP of HR is not available, this important function work can be co-managed by the CEO and an HR Manager. Another alternative is to hire a part time HR professional. One experienced individual can act as VP of HR for two or three middle market organizations on a part time basis. The typical approach would be to work in each organization’s office 1 or 2 days a week, while being ‘on call’ at other times should an HR emergency arise.
Keep The Focus On Talent
To some people “HR” means a lot of routine processes like processing employee onboarding and terminations. But the “talent” part of HR is absolutely critical to the Management that builds a leadership team capable of executing the many transitions required to get out of NO MAN'S LAND. Entrepreneurs ignore talent management at their peril.
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Contact Ann at: Ann.Oconnell@newportboardgroup.com
image credit: Cornerstone on Demand
