I tell clients that effective HR functions for small and mid-sized organizations are built on a framework of three key components: regulatory compliance, employee relations, and efficient transactions. Of these three, compliance and transactions are not value added. For sure, employment-related lawsuits are expensive, time consuming, and distracting, but the process of achieving and maintaining compliance with myriad state and federal rules and regulations doesn’t improve quality, or increase efficiency, or lead to better widgets. Likewise, transaction processing, like payroll and benefits administration and record keeping, are essential functions but add zero to the bottom line. Employee relations, that continuum of hiring to development and retention to de-hiring, is where opportunity lies for HR to make an impact to overall organizational improvement.
So when a company like JP Morgan, a huge firm that can darken the skies with flocks of HR professionals, is the subject of an EEOC press release, it’s very puzzling to those of us who work with much smaller enterprises. Compliance with these kinds of state and federal statutes is a basic, fundamental job for any HR department. This is not technically challenging, and it’s not particularly expensive or resource intensive. It does require some intentional leadership and focus. As I explain to my clients, take time to do what must be done, including compliance, and then focus time, attention, and energy on building HR competencies that benefit organizational stakeholders.
It’s really not that difficult.