To Split or Not to Split the Company HR Department

A recent Harvard Business Review article, “It’s Time to Split HR” caused a lot of controversy with its strong criticism of HR’s inability to deliver on company’s talent needs. The author, Ram Charan, a business consultant and writer, suggests splitting the department into two branches: one focused on administrative functions like benefits and compensation and the other strictly focused on talent development.

Dave Ulrich, a university professor, responded to Charan’s column with an article, deliberately titled “Do Not Split HR – At Least Not Ram Charan’s Way.” He argues that splitting HR reduces the real talent development problem to an issue of structure and governance. More importantly, Ulrich believes that splitting HR would prevent chief human resource officers (CHROs) from delivering real value to the business when it comes to developing internal capabilities.

Charan’s suggestion to split HR stems from his observations of CHROs who are mainly focused on process-driven administrative functions, neglecting the larger people-development issue. Ulrich on the other hand, firstly points out that market forces have risen the bar for the HR departments overall. Though he agrees with Charan in that CHROs should act as sounding boards to CEOs when it comes to talent implications of the company’s strategy, he proposes a different approach.

To help increase a company’s competitiveness by improving talent development, Ulrich suggests that HR departments should invest in the “middle 60 percent”—employees who fall between the highest and lowest performing. To Ulrich, an approach that centers on talent, capabilities, and leadership is an effort of the entire organization not only an isolated function of an HR department, as Charan seems to suggest.

Regardless of where one stands on this issue, HR professionals working in talent development will face growing expectations to develop talent in line with the organization’s long-term strategy. Limestone HR students can take a number of courses to help them prepare for this challenge including HR 420 – Staff Development and Training. This class teaches students how to design and manage effective training programs in both public and private sectors.