As hard as it might be for some people to wrap their brains around the idea that an amicable and productive relationship with the human resources department is possible, managers who do not strive to make nice with H.R. ultimately stand to lose the most.

There is a largely held belief that the main purpose of the human resources department is to keep the institution from being sued. Granted, a majority of the head of H.R.’s time and energy is focused on protecting the institution from a regulatory and compliance standpoint while at the same time trying to manage the constantly evolving maze of new regulations. In fact, the recently released Cornerstone Report: Benchmarks and Best Practices for Mid-Size Banks suggests that a negative downward trend in the number of overall bank employees supported by one full-time H.R. employee can be at least partly attributed to additional regulatory and organizational requirements to support the ever-changing compliance landscape.

So while H.R. is engaged in the prudent and rational pursuit of protecting the bank, hiring managers are feeling neglected. They don’t believe H.R. cares about their needs. I know this because I have heard the laments countless times in my work with financial institutions across the country.

How can we solve this disconnect between H.R. and the business lines? I suggest that hiring managers take a leadership rather than a potentially adversarial position to ensure success. Here are my three recommendations for Gonzo bankers to accomplish this goal:

1. Treat human resources like a strategic partner.
Managers deal with all kinds of strategic partners, and most of the time they are third party vendors. However, I submit that H.R., which is in effect a shared services function, could be viewed and measured the same way strategic vendors are measured. Most institutions allocate a portion of their fixed costs, i.e., shared services functions such as H.R., on a monthly basis to the operating units. It seems to me that if an operating unit is paying for a service, it should darn well have a say in how that service is being performed.

If there is not a scorecard today that measures H.R.’s success in sourcing and hiring new employees for managers, there should be. Operating managers are measured 100 different ways to Sunday, so why not develop a scorecard with some meaty and relevant operating “measures of success” for H.R. when it comes to the hiring process? Establish a baseline metric, or hurdle rate, that H.R. has to achieve in order to be viewed as a successful “vendor” in this category. A simple but effective pair of metrics to include on the H.R. scorecard would be both the number of new employees that voluntarily attrite and those that involuntarily attrite within the first 90 days of employment, along with the reasons.

If H.R. consistently misses its service levels, then there should be repercussions, such as a lower fixed cost transfer to the operating units for H.R. expense. This would undoubtedly stimulate a flurry of activity in H.R. to improve its operating efficiency, or result in cutting its operating budget (translation: staff members). Conversely, if the H.R. department is meeting and even exceeding expected service levels, then H.R. employees should be rewarded.

It creates an entirely different scenario when a financial institution views H.R. as a strategic vendor instead of a shared services cost center. But why shouldn’t it be viewed that way – isn’t the bank paying for a service?

2. Make the hiring process more of a collaborative effort.
Talk to anyone in H.R. and they will tell you that the Internet has made the process of hiring much more cumbersome. A posting for a loan processor can turn into an avalanche of resumes from people residing anywhere in the country, and even in some foreign countries. Unfortunately, it is very likely that most of these resumes are as padded as Hannibal Lecter’s prison cell. So, how do hiring managers help themselves get the right people into the organization?

First off, they should not let H.R. continue to rely solely on routine keyword searches to select potential candidates from the 1,000 or so applicants it receives for a job posting. Instead, the H.R. specialist in charge of filling the job should be invited to come into the department, interview an employee that is currently performing the job, and observe the workflow of upstream “producers” of the input that the incumbent worker will have to process as well as the “receivers” of the incumbent worker’s output. The goal is to provide the H.R. specialist an opportunity to gain more perspective on the skills and traits a prospective candidate will need to be successful in the job. The job description should then be reviewed and, if necessary, updated to ensure that it is complete before the sourcing process begins. Ensuring that the person responsible for screening candidates thoroughly understands the job requirements goes a long way toward getting the right people in the door.

The benefits of this process are three-fold. It will help the institution develop more robust job descriptions; source stronger interview candidates; and, most importantly, begin to build stronger collaboration and communication between the operating units and the human resources department. The icing on the cake will be the metrics of success that will be tracked to ensure H.R. achieves and maintains the standards of performance required of it as a strategic partner.

3. Make sure H.R. knows you ‘Care’
To be fair, H.R.’s job has gotten harder along with everyone else’s in the company. A manager who needs to hire a loan processor “yesterday” shouldn’t be surprised if that need is not H.R.’s top priority. The truth is, with all of the stuff H.R. has to do in addition to sourcing for that loan processor, the H.R. specialist may not deem the job description she was just handed worthy of more than 18 seconds’ consideration. It is imperative that H.R. clearly understands the expectations of the hiring manager and has the same burning desire to hire the right person. Would this not be the same expectation for a vendor providing a service, let alone such a critical one as staffing? At the end of the day, I believe the H.R. department wants to help as much as it can, but it needs to be managed just like any other vendor to ensure success.

Hiring managers must make it a point to be personally involved when it comes to the sourcing and hiring of people that will work for them. Why on earth would they ever delegate to H.R. or anyone else the responsibility for hiring the right person? If “people are our most important asset,” which is routinely stated by managers I work with in strategic planning, then why don’t they prove it and take charge of this process? At the end of the day, the hiring manager must accept the responsibility for the hiring decision and everything that goes along with it. Good luck trying to convince your boss that H.R. made a mistake by hiring Bill Slobovitch for the loan processing job. They didn’t hire him, you did. Own it.
-JC

Communication breakdown?

Are internal factors chipping away at your institution’s ability to collaborate and execute effectively? A strong organizational foundation is a key component of a profitable future, and Cornerstone Advisors’ Organizational Assessment can help you strategically define the structures, roles, responsibilities and desired outcomes for critical functions at your institution.

Visit our Web site or contact Cornerstone Advisors today to learn more.