Here’s how to transform your approach to human resources for everyone’s benefit.

By Daniel Turner

The traditional model of human resources is an unwieldy behemoth, an ever-expanding array of responsibilities. What started as a moral reaction to the harsh conditions of factory work in the late 1800s — or an attempt to improve economic efficiency — has become a vital part of organizations of any size. 

Yet, as companies grow and the nature of employment evolves, the HR professional is constantly torn between advocating for employee interests and safeguarding the company’s well-being — a contradictory set of responsibilities that hurts engagement, retention, and efficiency. At TCG, a medium-sized public benefit corporation and U.S. government contractor, we blew up the traditional approach to HR.

Too Many Hats

HR professionals are tasked with a daunting array of responsibilities. Everything about employees is in their purview — recruiting and hiring; formulating and adjudicating company policies; payroll; learning and development; performance monitoring; disciplinary actions and investigations; workplace culture; conflict resolution; compliance and safety; health care; surveying; compensation; rewards and incentive programs; and on and on. It’s an enormous job. 

After spending their morning listening with empathy to an employee’s issues with their manager and advising on how best to work with them, the HR professional must then fire that same employee in the afternoon because their manager wants them gone. They will welcome a new employee with warmth and friendship on Monday and then engage corporate counsel on Friday after the employee has been sexually harassed by a client or coworker. They have to love employees and what they can do for the company, but also fear them and what they can do to the company. Are we stuck with this inadvertent portmanteau, this pushmi-pullyu, this house divided against itself?

A Blueprint for Restructuring

Our experience at TCG led us to a strategic overhaul of the HR function. We created a new HR structure, enhancing operational efficiency and employee satisfaction. In plain English: We blew up HR, sorted it, categorized it, moved the pieces to where they made the most sense, and ended up with a repeatable solution.

Recruiting as a Unique and Vital Function

Our product is our employees’ hours, so recruiting is vitally important for us. But recruiting isn’t actually HR. It’s a combination of skills — marketing, sales, brand management, data analytics/business intelligence, and customer relationship management. For us, recruiting is primarily supply chain management. Having too many or too few employees represents opportunity costs we can’t afford. Initially reporting directly to the CEO, our recruiting group now falls under the purview of the chief operating officer as a supply chain management function. 

Resolving the Duality

Once we split off the complication that is recruiting, it was easy to examine the duality inherent in typical HR. Engaged employees are retained longer and have (and create) fewer problems. HR is typically tasked with curating and maintaining the culture, in addition to loving and caring for employees. Culture plus love and care leads to engagement. Simultaneously, HR must ensure that the company is protected from its employees. Whether by harassment, poor management, illegal interviewing, bias, theft, unethical actions, or a hundred other ways, employees’ behavior can bring down a company. 

An HR professional who loves and fears employees is dual-natured. That’s very difficult to pull off. So we split the two parts.

Employee Happiness Department

Our vice president for employee happiness is focused on organizational development, employee experience, and relations. Reporting directly to the CEO, she addresses the need for a dedicated effort toward cultivating a positive workplace culture. 

The happiness department’s remit includes learning and development, career discussions and goal-setting, community events, soft benefits, biannual engagement surveys, and regular meetings with each employee. It is accountable for retention — if someone quits, it is expected to know why. It is the softer side of HR, the side that loves employees and wants them to stay forever.

HR Focused on Compliance

With recruiting and happiness carved out, HR can concentrate on compliance and hard benefits, reporting to the CFO. This focus and place in the organization allow HR professionals to dedicate their expertise to ensuring the company meets legal and ethical standards without conflicting responsibilities. Our HR professionals work with immense compassion and empathy, but their focus is on ensuring the company’s goals are met, rather than employees’ goals. 

Ongoing Challenges

While our new model has definitely improved operations, it’s not without its challenges. Handoffs between recruiting, HR, and happiness require careful management to prevent oversights. We might have more full-time employees among the three roles than most companies have in traditional HR.

Benefits of the New Structure

Recruiting’s proximity to clients’ projects increases its understanding of their needs and prioritizes them. There are fewer complaints from project managers about recruiting, and since they sit at the same table, communication is constant.

Nobody fears going to happiness to get help resolving an issue because happiness is not HR. The term HR comes with baggage. There’s no fear that happiness is going to hold a grudge come evaluation time.

HR has a considerably stripped-down set of requirements, so it’s easier to find people to fill HR positions and easier to keep people in those roles. It’s also more well-defined and easier to manage.

Employees tell us they’ve never been treated so well by any previous employer. Engagement scores are stellar, our turnover rate is less than a third of the industry average, and our HR, recruiting, and happiness employees love what they do.

Today Doesn’t Have to Be the Same as Yesterday

The journey of HR from a mere administrative function to a strategic partner in organizational success is ongoing. Our experience demonstrates that rethinking and restructuring the HR function can lead to significant improvements in employee satisfaction and operational efficiency. Regardless of size or sector, organizations must critically assess their HR models and consider whether a restructuring could enhance their operations and workplace culture. Your employees deserve nothing less.