This is what's wrong with Human Resources - and how to change it

The worst thing we ever did in corporate America was to take the most vital part of any company - the people powering it - and label it so dismissively as “human resources.”

We reduced talent to a simple asset: one to be standardized, controlled, commoditized, and managed like any other form of capital. We created a department whose sole purpose is to extract value and enforce compliance, and put them in charge of an ecosystem built around formalized processes, sameness, common practices, and conformity.

The result is the institutionalized mediocrity plaguing many legacy companies today. A pandemic that will only become more problematic as we advance into the post-digital age: a world of agile, talent-focused companies that are set up to disrupt, excel and grow.

How we got here

The rise of HR can be traced back to the dawn of the industrial age, and the reason behind its creation is also at the very core of what renders it obsolete today. While easily enforceable in factories and workflows that revolve around uniformity, consistency and minimum deviation from the norm, HR faces existential threats in a world of increasingly intangible labor performed in a digital realm by workers whose motivations extend beyond monetizing their labor, into passion and personal fulfilment.

Businesses have always thrived on the process of making ever slightly better things, in ever improving ways. For centuries, humans have tried to emulate machines: we’ve mastered repetition, following orders, being on time, optimizing ourselves and our outputs.

It’s time to accept that machines are best at being machines and celebrate what being a human is all about: not least our ability to question, challenge and adapt.

Difference, diversity, and divergent thinking

The characteristics necessary to survive in large corporations are not just unhelpful, but downright detrimental in startups and agile tech companies. When we embrace the new needs of a post-digital world and build skills that support it, we will quickly see the value of remarkable people rise, while the value of those who blend in, who hide in org charts and shirk responsibility, diminish.

The post-digital economy thrives on difference, diversity, and divergent thinking. It embraces exceptions and loves anomaly. It breaks down boundaries, subverts hierarchy and strips it of centralized control. It triggers wild mashups and unlikely combinations, it challenges conventions, revels in spontaneity, and it actively seeks out tension - because that’s what breeds invention.

But when HR comes in to confine talent to boxes, to fit imagination into checklists, and to put the lid on enthusiasm, it all bursts into a violent clash of values: one that’s at the core of why companies rooted in tradition are struggling.

New power vs. old

This crisis of modern labor stems from three factors:

- a tension between human needs and outdated workplace structures;

- new societal values and companies unequipped to handle them (because the future is often modeled on the data and decisions of the past);

- and the emergence of a creative class - people who are finding new outlets for expression and are standing out after decades of fitting in.

In the battle of new power vs. old, we value pluralism over imposed consensus, entrepreneurialism over tightly regimented roles, and centralized authority, curiosity and continued learning vs. formalized training.

Culture of change

Whether you are a distinguished company with a storied legacy or a bold startup, the key to your growth lies in the talent you hire, retain and empower. Creating a culture of change and nurturing values like flexibility and ambition is what sets the foundation for innovation.

But what we see most often is companies adapting around old systems, instead of completely rethinking leadership and management, or transforming the way they recruit and retain, or the types of roles they create.

“We want the most creative out-of-the-box thinkers, the most inventive agents of change; people with ambition and big ideas to help us disrupt, transform and solve big challenges. But they need to have 10-12 years of relevant experience in this very precise, narrow field and a record of keeping the status quo. An MBA is of course also required. Because we need to make sure we don’t deviate from the norm, and the way we do that is covering our bases, following rules, and minimizing risk. Which is what we expect you to do once hired.” Sound familiar? With job ads that send this message, no wonder the people companies need the most are the least likely to be attracted to work there.

When we champion compliance, mediocrity sets in.

We recruit people to fit into a space, instead of reconfiguring, expanding or reshaping the space. We’d rather hold on to the job spec than bend it around a remarkable person.

What if we championed difference and diversity of talent? What if we embraced the discomfort of hiring people who stand out - people who challenge us, because they are not exactly like us, people who don’t fit the pattern of everyone who’s filled their roles before?

What should Human Resources really look like?

Perhaps the greatest opportunity in this new, post-digital economy lies in this promise: that each of us can realize our full potential by expressing our broad range of our skills. Because that inherently benefits the companies that employ us.

The next and arguably most crucial step is retention. What’s the point of hiring disruptors but not empowering them? Such trophy employees continue to be hired as a defensive mechanism designed to signal change without actually getting the company to change. Looks good in the press release and keeps everyone’s jobs safe -- what could go wrong? They sit on the edges, powerless, the very skillset they were brought in to use, untapped. Without a culture that allows them to drive change or make decisions, this talent feels unutilized, stuck, stifled. Until they’re approached by the next recruiter.

When we listen to the mavens and misfits, when we inspire the changemakers we brought in and support them with a tribe of people they can connect with, and with budgets and decision-making power, we set the whole company up for success.

What if we valued retention over the lure of talent seduction, over the quick boost to the company’s ego that comes from chasing new recruits? Can we create a system where loyalty is truly rewarded? And can we shift away from a system that rewards compliance and gives recognition based entirely on what is most easily measured?

The companies that can get people to feel empowered, to feel free to show their passions both in and outside of work, to drive change by employing the full range of their talents, to express their curiosity and uncensored enthusiasm, are the ones best positioned to thrive in the future.

When people have the flexibility to work from anywhere at any time, they will end up achieving more, not less. When they can pursue their interests freely, those interests won’t get in the way of their jobs - they will enrich and equip them with new skills to use in their jobs. When they can bring their full selves to work, they’ll pour their full selves into their work. And when you do the necessary work to cultivate openness and transparency, you’ll build trust and accountability and strengthen the fabric of your company.

So let’s stop looking at talent purely through the lens of acquisition and let’s see people as more than just human resources. Whether you are transforming your company or starting a new venture, it may be worth asking yourself: What would HR look like, if we invented it today?