Should I Hire a Robot or an Employee? HR Must Offer Integrated Solutions

Note: This is a “think piece” written to stimulate your thinking about strategic HR.

The idea of having a corporate function focused on managing labor resources is one that has been around for more than two centuries (corporate functions emerged following the advent of labor unions in the late 1700s). Since then the function has gone by several names, the most commonly applied being “human resources.” Unfortunately the name “human resources” has gotten in the way of what the function was created to accomplish (bringing labor and management together in a manner that benefits both). 

In the vast majority of organizations, be they large or small, when labor solutions need to be developed, the solutions provided by the human resource function are always “people solutions” (i.e. hiring, developing, rewarding, performance management, etc.) That narrow scope was fine when 95% of the work to be done in an organization was accomplished by an employee, but that simply isn’t the case anymore. Today organizations leverage a vast array of labor types including automation, outsourced service providers, and contingent workers to get things done. Some studies now indicate that in larger organizations when outsourcing and contingent spend is added together, it exceeds what is spent on wages and benefits for regular employees.

If the HR function and those that lead it are to be truly strategic, they must acknowledge that today managers deal with a complex array of labor solutions and that maintaining a narrow scope of employee only solutions not only limits the applicability of the function, but also harms the business by fragmenting “labor procurement/management.” A truly strategic HR function would follow the lead of marketing, supply chain, and manufacturing by offering “integrated solutions” that pair the best labor resource engaged in the optimal manner for the work that needs to get done at any point in time.

Call Centers: An Ideal Example of Labor Type Choice

As little as 15 years ago, if a manager needed to operationalize a customer call center, there was really only one choice. They would work with real estate and facilities to allocate physical space, IT to install telecommunications equipment, and HR to hire, train and manage the necessary number of permanent employees to operate the center.

Today that same manager could:

  1. Staff the center solely with contingent workers (as JetBlue has done)
  2. Outsource the call center entirely to a service provider (domestic or offshore)
  3. Implement and interactive voice recognition (IVR) solution

In a chaotic business environment, all three of these options (none of which rely on HR) would provide more flexibility and agility then using difficult to release permanent employees.

All Business Problems Have a Labor Component

If you analyze most of the business problems facing managers in this highly competitive global environment, you will find that very few of them can be classified as simple problems easily addressed by one corporate function. Instead, most are extremely complex problems that require a big picture perspective and solution options that coordinate change across multiple functions. In nearly every case, part, if not most, of the change required impacts how the organization uses labor.

Addressing business problems from a holistic perspective ensures that advances made by one function are not mitigated or rendered void by the action or inaction of another. Solutions emerging from a holistic vantage point are commonly referred to as “integrated solutions,” and nearly everyone has come to expect them. In the corporate world a product manager may turn to a marketing leader for an integrated solution to help establish awareness of a new product category. The solution could include the use of numerous disparate advertising channels (i.e. TV, radio, Internet, print, and direct mail), as well as PR and services purchased from external vendors.

The modern-day upscale supermarket is an excellent illustration of how business leaders have learned to provide integrated solutions. Years ago a consumer seeking a Thanksgiving turkey would have reached out to his/her local butcher. We all know that the turkey, while a large part of the Thanksgiving meal, is still just a part. The modern-day upscale butcher offers an integrated solution by being able to answer basic questions about bird storage and preparation, as well as about pairing the bird with wine, stuffing options, and other sides — the ingredients for which are all available under one roof. It’s also possible that while there your car could be getting washed, filled with gas, you could do your banking with the in-store bank branch and drop off your dry cleaning.

HR Is Not Exempt

HR has a long history of putting people first. In many cases, it has acted more like a jobs defender rather than a neutral party recommending the best labor solution for a particular situation. If that is to change, HR must broaden its scope and become the go to leader for pairing labor options with necessary work, providing solutions that govern:

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  1. Regular employees
  2. Contingent workers (part-time, seasonal, contractors, or consultants)
  3. Outsourced service providers (task, process, or function)
  4. Strategic partner labor (work shifted to a partner organization)
  5. Challenge/contest (work is executed by customer or contest participants as the subject of the challenge/contest)
  6. Automation (software/hardware)

As stated earlier, in some organizations less than 35% of the spend for labor is going to employees, with 65% going to the other five options.

Technology Has Come a Long Way

Machines have been replacing human labor for nearly a century but only recently have solutions become so accurate and reliable that they could automate a great deal of business decision-making and analysis. Google or Bing for example are at least a thousand times more effective than a traditional reference librarian in finding a quote or a fact. And, just in case you have not kept up on your reading of “Robot Daily,” you should know that there are now 8.6 million robots in use around the world with application in military, police, aerospace, and medicine.

…robots will take over approximately 50% of the jobs in the U.S. economy over the course of just a decade or two —Marshall Brain

Technology has many advantages over people, including the ability to work 24/7, no demand for overtime pay, predictable maintenance (healthcare) cost, and no threat of unionization.

Action Steps for HR

Before the HR function can expand its scope to include “integrated labor solutions,” it must get past the word human in its title. Redefine the function as a productivity consulting center and focus on recommending the best labor solution for the business be it technology, outsourced service provider, contingent or other. Once HR accepts the productivity role, it must then develop a process for identifying all of the possible labor options and the advantages and disadvantages of each. It must also develop processes and approaches for improving collaboration and communication between the different functions that are involved in any integrated solution.

Final Thoughts

Anyone who fully understands sales or customer service knows that both users and customers have come to expect integrated solutions. Managers want to be able to go to a single place and get all the answers and the solutions for labor to accomplish the work they need to get done. They want to avoid bouncing between functions to acquire resources and the HR function is the logical place to go. It has been clear for a long time that having the most employees doesn’t ensure success; instead, it is the organization with the most innovation, productivity, and speed that wins. HR needs to step up, abandon the compliance hat, and start wearing the solutions hat. If the business needed another person telling them “no, you can’t do that,” they’d hire a regulator!

This subject needs more attention and debate; luckily ere.net provides a place for it. Share your thoughts and best practices about HR can “step up” and provide more inclusive solutions.

Dr. John Sullivan, professor, author, corporate speaker, and advisor, is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high-business-impact talent management solutions.

He’s a prolific author with over 900 articles and 10 books covering all areas of talent management. He has written over a dozen white papers, conducted over 50 webinars, dozens of workshops, and he has been featured in over 35 videos. He is an engaging corporate speaker who has excited audiences at over 300 corporations/ organizations in 30 countries on all six continents. His ideas have appeared in every major business source including the Wall Street Journal, Fortune, BusinessWeek, Fast Company, CFO, Inc., NY Times, SmartMoney, USA Today, HBR, and the Financial Times. In addition, he writes for the WSJ Experts column. He has been interviewed on CNN and the CBS and ABC nightly news, NPR, as well many local TV and radio outlets. Fast Company called him the "Michael Jordan of Hiring," Staffing.org called him “the father of HR metrics,” and SHRM called him “One of the industry's most respected strategists." He was selected among HR’s “Top 10 Leading Thinkers” and he was ranked No. 8 among the top 25 online influencers in talent management. He served as the Chief Talent Officer of Agilent Technologies, the HP spinoff with 43,000 employees, and he was the CEO of the Business Development Center, a minority business consulting firm in Bakersfield, California. He is currently a Professor of Management at San Francisco State (1982 – present). His articles can be found all over the Internet and on his popular website www.drjohnsullivan.com and on staging.ere.net. He lives in Pacifica, California.

 

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10 Comments on “Should I Hire a Robot or an Employee? HR Must Offer Integrated Solutions

  1. Wow John,

    What a great piece of thought provoking writing to start the work week. I loved everything you had to say and will probably need to take a few days just to sift throught the ramifications of a “Labor Sourcing and Facilitation Department” that needs to handle such diversified responsibilities while maximizing effectiveness in doing so…NICE ARTICLE!!!

  2. The Marshall Brain quotation should note that the forecast “decade or two” transformation would start in the “2030 time frame”, following the advent of “smart robots”. For those interested, here is an FAQ on the subject (http://www.marshallbrain.com/robotic-faq.htm) from the quoted source.

    That FAQ raises the notion of 50 million displaced US workers. But I think it is important to view of that possibility in the context of “displaced agricultural workers”, “displaced factory workers” and “off-shored workers”, heretofore.

    Peter Drucker wrote: “The most important, and indeed the truly unique, contribution of management in the 20th century was the fifty-fold increase in the productivity of the manual worker in manufacturing. The most important contribution management needs to make in the 21st century is similarly to increase the productivity of knowledge work and knowledge workers.”

    For developed economies that today constitute roughly 65% of global GDP, but a far smaller percentage of global population, increasing “the productivity of knowledge work and knowledge workers” is where rising standards of living must come from. Indeed, it is where smart robots will have to come from.

    Perhaps the question for the function that was once called HR is: How will you facilitate those essential knowledge worker productivity gains? What transactional models will you use to access and augment knowledge worker productivity directed toward the enterprise purpose? How will you get the most productive talent to “volunteer” to work for you? How will the enterprise purpose have to change in order to make this possible? What clear and compelling societal need(s) will the enterprise address?

    In the old days, companies hired employees to do what they wanted done. Going forward, top talent will increasingly volunteer to work for companies that are doing what talent wants done.

    Richard Melrose

  3. Thank you Dr. Sullivan. It has occurred to me that one thing that could allow recruiting to continue to thrive in a changing work and economic environment is to transition from what I call “Widget Recruiting”: We’ll hire you a walking, talking widget to do your work to “Solutions Recruiting”: We’ll provide the solutions to getting your work done, whether it’s a FT, PT, contract, onsite or offsite person, or whether the work would be better no-sourced (eliminated), through-sourced (automated/roboticized) or out-sourced (sent away).
    I would also enjoy speaking to others interested in this concept/practice.

    @Richard, Ever since skilled labor became expensive (and except in depressions), top talent in prosperous countries has pretty well been able to “write it’s own ticket”, and will probably continue to do so. It’s the other 90% that I’m concerned about.

    Cheers,

    Keith

  4. Love the article! I have been working for a marketing and have been transitioning from my current position into the HR department, I’m way excited but am expected to be the on to turn things around. I know HR Solutions, is a growing field of expertise because of the fact that it is so important to have a solid company. I’m looking for all the info i can get so that i can work on turning things around. Thanks for the info!

  5. @ Lynn: ISTM that “turning things around” is what you DON’T want to do. By all means, spend time and money and gain the support of senior managers in the effort or the appearance of doing so, but don’t upset any apple carts. There’s always a vested interest behind the status quo, and sometimes they are very powerful. Of course, if the “Forces for Change” faction is truly and firmly in control, go full steam ahead!

    Cheers,

    Keith “Don’t Use the Weather Channel to See Which Way the Winds are Blowing” Halperin

  6. Keith,
    I think your right! Its important to have the right perspective and attitude as you go about applying new ideas. I really appreciate the input, thank you.

  7. I really appreciate your input, I will definitely keep that in mind as a go about implementing things, thanks for the advice!

  8. You’re very welcome, Lynn. I hope you don’t pick up my cynicism in the process.

    🙂

    kh

    Blessed is he who expects nothing, for he shall never be disappointed.
    -Jonathan Swift

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