Human Resource: The New Age of HR Management – 1

searchin for the right direction by Jot.de

Following up on my previous post, a new argument has reared its head. But before that let us take into account my comrade, Muaz Jalil’s, arguments into consideration. Being the most important resource does not mean it has to be “non-expendable”. And humans tend to be a risky resource because they have the free will of walking out of your office any time they wish.

Let us look into what makes a resource “the most important” resource. The importance of a resource depends on it’s availability and substitutability. These two combined create the value (in monetary and all other value terms) for a resource to the company. If a company was situated in the middle of the Sahara Desert it’s most important (and valuable) resource probably would be water. Therefore Muaz is absoultely right in saying that experienced and skilled Human Resource is still the most important resource for most companies. And yes this resource is also the most risky resource of all.

And companies do not like risks. They do not like it at all.

And this is where Naser, another friend of mine, comes in with his thoughts. He feels HR today has the purpose of making each and every employee dispensable.

Why shouldn’t they?

It is the task of every function to reduce the riskiness of a company and increase it’s profitability. If we look at the recent trends at high performing companies globally we shall see a steady move towards outsourcing core resources. AMD is apparently in the process of outsourcing their chip making factories, their core business. And they are being applauded for it, because it reduces operating cost, increases efficiency and, above all, it reduces risk.

Human Resource, being the most important and risky resource, should come under constant scrutiny and changes to reduce its significance. The function of HR, in the 21st century, should move. HRs role of obtaining, developing and retaining talents should now change. To what, you may ask.

The new role of HR should be in making talents dispensable, breaking down work practices to make work roles generic. so that anything that can be outsourced, is outsourced.

Because only then you shall enough money for those who are actually indespensable and can never be replaced.

Human Resource: Is it really the most important resource?

In every major HR text that I have come across, they always have the same introduction. “Human resource is the most important resource for a company.” But if truth is told, is it really?

All of us are employees of a leagl entity called “the company”. It is a curious existence to work for. It has no mind of it’s own, no thoughts, no judgement and no plans for its own existence. Yet, it has a path, a goal, an objective and a definite purpose. And people who work for it provide it with the mind, thought, judgment and plan to fullfill that purpose. A company needs people to prolong it’s existence. But hypothetically, a company would still survive without people.

Unless each and every employee is gone, companies need not care about the people they lose. For every job, every post,  every talent, there is a replacement available. Yes some talent are so important that losing them might hurt a company in the short run (Yahoo!, AMD). But in the long run a business entity with the right goals and objectives will get the replacement and will soon be on its way to the podium.

Resources are important, but one resource is hardly more important than the other. Human Resource is not the “most” important resource. It is a resource like everything else. It is perishable, replenishable and above all substitutable.

How? Suppose your whole finance department quit today, what will you do?

For 7 days you can make do with limited payouts and zero money transaction. And you can use those 7 days to evaluate 5 agencies who are willing to provide the same service under their own management with a similiar or even lower cost.

At the end of the day, my argument is this, HR is an important resource which is required for a company to reach it’s goal on a timely and efficient manner. But it is equally important as any other resource and does not require the special attention and care that any HR book may suggest. Just like raw materials, you need to make sure your Human Resource is of good quality, is preserved right, is processed right and is properly stored in the inventory.

And you should make sure that, just like your raw material,you have an alternative supplier for your HR as well.