A Human Resources Department?
“To be or not to be; That is the question!”
by John Putzier, M.S., SPHR
President, FirStep, Inc.

That is the question faced by every organization that reaches a critical mass in its first growth phase, and especially by technology companies who rely so heavily on both the quantity and quality of rare talent. At what point do you formalize the human resource management function? Let's look at one of the pioneers in technology and human resource management for some wisdom and guidance.

The firm was founded in 1939 by Bill Hewlett and David Packard-two Stanford electrical engineers from Palo Alto whose efforts in technology gave birth to California's Silicon Valley. Early on, Hewlett-Packard became known for innovation in people-oriented practices and values, embodied later in a set of organizational values called "The HP Way."

It was not until 1956, 17 years after the company was founded, that Hewlett and Packard agreed to have a formal HR function. Their earlier reluctance had been founded in their strong belief that managers should be responsible for the people-related aspects of the business. The creation of a separate department, they feared, might lead to diminished managerial effectiveness in these areas, and in fact, their fears had been realized for a while.

But, being conscious of this trap, HP succeeded in moving HR back to becoming a complement to management rather than a substitute for it.

The bottom line is that any growing organization, at some point, must formalize a lot of its human resource functions. Initially however, most companies’ first HR departments address only the administrative chores (benefits enrollments, payroll, legal postings, etc.), merely out of necessity. However, it doesn’t take long to realize (sometimes too late) that if continued growth is to be an ongoing strategy, then HR must be positioned and staffed early on to be ready, willing and able to contribute to this growth.

In other words, if you have made the decision to embark upon the creation of a formal HR department, and you plan to continue to grow, you must position HR as a profit center and not as a cost center. Can HR add value (save money) in your recruitment efforts? Can they address the many unique challenges of a highly technical and perhaps eccentric workforce? Do they understand the core business and concepts like risk selection vs. risk avoidance in making ROI-oriented decisions that are in the best interests of the organization, and not just the HR department? These are just a few of the questions that many growing technology companies wish they would have asked the first time around.

The most important lesson learned from high-technology organizations that have blazed the HR trail before you, is that you must take a long view in creating an HR department that will serve your company as a strategic partner and not just as an administrative bureaucracy. Traditionally, the words creativity and HR management have not been used much in the same sentence. But with the recruitment, motivation and retention challenges facing most technology organizations today, they must become synonymous.

Although there are seasoned HR professionals out there who will fit the bill, and you may want to have such a person to spearhead your new HR department, do not abandon the idea of moving someone into HR from within the organization who has both a passion for the business and a quickness to learn the human side of it. Except in areas such as compensation and benefits administration (which require more technical specialists), many HR functions can be learned and handled by generalists. And, with organizations like the Society for Human Resource Management (SHRM), and High-Tech-NET (a professional emphasis group within SHRM founded by this writer), there are resources and peer groups available to mentor, train and groom HR neophytes into this new paradigm.

As Hewlett and Packard implied over half a century ago, every manager must be an HR manager. Which is why HR must be positioned as a catalyst and as a resource for the rest of the organization, accountable for tangible business results.