THE ELEVENTH COMMANDMENT

[font size="1" color="#FF0000"]LAST EDITED ON 06-08-04 AT 08:10AM (CST)[/font][br][br]Thou shalt never place a person of accounting background in any position of administration over Human Resources. I tire reading posts to the Forum bemoaning the fact that Human Resources is admistratively reporting to some accountant or controller or comptroller who has paralized the department. This makes no more sense than placing the maintenance department under the public relations group or the psychiatric department under the department of buildings and grounds. If you want to see your company/firm/agency/organization forever screwed up and mired in paralysis-analysis, put Human Resources under a finance administrator. Sorry to be so vague. x:-)
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  • 52 Comments sorted by Votes Date Added
  • Don, I normally would agree with you. I have been in this business over 25 years and almost all of it has been reporting to somone in the "bean counter position or background". My last job my "boss" continually harrassed me because every week he wanted me to financially justify HR (which can be done, but I really didn't have the time to do it and if I did he never looked at it.)
    The job I have now is wonderful. Small company so I report to Treasurer/Contoller but sit next to President and interact with him as much as Controller. Also, I am not nit picked, but left to get the "job done". I finally decided that don't care who I report to as long as they will let me know the big picture and leave me alone to do my work.

    E Wart
  • Perhaps the most problematic situations are those that result from the mindset of "Where can we stick HR on the org chart? Let's put it over here under Finance. Gotta put them someplace."
  • HR here falls under "Budget and Administration"...
  • Don: Is it the title or can it be the individual? In one company,I reported to the Pres who had a sales background. Nightmare! Do whatever you have to do to get the product out the door and keep the customer happy.

    Financial people typically (can I use that word?) need everyting to balance and prove out. Not so in a HR environment. They deal with black and white, and we have all these grays areas. If you end up reporting to a financial person, I think it really depends on that person ability to recognize that HR is an unique area. The micro managing, the second guessing, the interrogations, the constant need to be kept abreast are traits many, many individuals have. Some just happen to be in finance.
  • Here's just one example, that I've experienced at two separate places. Let a bill show that you were charged $38 for a labor law discussion with an attorney and then be prepared to spend about $200 in wasted staff time explaining in detail to the CFO why the call was necessary, what the resolution was, how the cost could have been avoided and what could have happened if you just 'let the chips fall where they may'. And the beauty of it is, you're gonna go through that same process again in 6 months as if the financial wizards retained nothing of the earlier conversation. Maybe it's a generalization, but they think in terms of balance sheets and HR exists in terms of color slide shows. Oil and water.
  • We have the same problems, micromanagement, second guessing decisions, and too many people weighing in on decisions. The worst is management wanting to make exceptions to rules that do not allow exceptions! HR is not viewed as unique here; rather, HR is viewed as an obstacle and a nuisance that prevents people from handling things the way they want instead of the way they should. Never a dull moment!
  • I kinda, sorta have the same scenario here. I report to the VP Administration with a dotted line to the Pres.

    It usually goes something like this.
    Me: No you can't do that. FLSA, or FMLA or ADA or OSHA says yada, yada, yada.
    Them: Can you find the ruling?

    Next day or later that day
    Them: I called our attorney and he said that your assessment of the situation is accurate.
    Me: Duh.
  • It really depends on the individual. I have had nightmares and wonderful. There are finance chiefs who understand HR, but I think fewer than the nightmares.
  • Gillian3, I wonder if those that appear to understand HR are either just comfortable ignoring it or are intimidated by its multifaceted complexities and the endless trails of colors and sounds it generates.

    People schooled in the processes of black and white often do not find comfort in either.
  • The person I referenced as "wonderful" would have been just as superb as an HR person as he is a finance expert.
  • I guess I have it pretty good here. The finance people report to me along with the administrative folks. But I'm a rather unique (substitute the word, "odd" if you must) person with unique talents. And they all love me!
  • I have to take issue with your blanket generalization of accounting/finance reports. I have been in HR for 20 years at several different employers. I went back to school after several years in the HR field and became a CPA. I have now grown into the CFO role at my current employer and oversee the finance and HR departments. I think it is a natural fit because so many of the responsibilities overlap such as payroll, benefits, compensation and budgeting. My prior experience was a constant power struggle between the two departments over who should be in charge of what, and sharing information was out of the question. We now all work very well together and everyone pitches in wherever needed. The key is the person who is managing the department, not whether that person has an accounting or HR background. Thanks for letting me get that off my chest in defense of all those accounting professionals out there.
  • You make an interesting and valid point, SW, but I'm curious as to what the final tally would be if we took a poll of all HR professionals. I have been in HR since 1985 and the only time I have ever had any real difficulty getting things done was the time I reported to the CFO instead of the President. I hate to generalize, but accountants do tend to view things from a number-cruncher perspective and if it can't be quantified, it must be invalid. HR people, on the other hand, (IMHO) tend more toward approaching and evaluating an issue from different perspectives, much like lawyers, and are able to see the different hues in the spectrum rather than just the primary colors.

    So maybe M Lee Smith should make this one of their weekly polls? I'd be curious as to the results.
  • Parabeagle, great minds think alike. O=* We asked this question in our Monthly Survey in September 2003, which was on the subject of Your HR Department:

    Who does the head of HR report to?

    CEO 32%
    President 24%
    Vice President 15%
    Finance Department 9%
    Operations Department 3%
    Other 13%
    2834 total responses

    You can find the rest of the survey in the Subscribers Area of this website if you're an Employment Law Letter subscriber:
    [url]http://www.hrhero.com/lc/[/url]

    James Sokolowski
    HRhero.com
  • I think it is a natural fit
    >because so many of the responsibilities overlap
    >such as payroll, benefits, compensation and
    >budgeting.

    Interestingly, SW, none of those are traditional Human Resources functions of monumental value, unless you consider the mundane tasks of establishing pay grades and running salary surveys and talking to groups and an endless stream of individuals about benefits. The problem HR professionals have, and I take great risk and liberty in speaking for us, is in the non-black-and-white areas such as the administration of company policy, the application of a multitude of labor laws, the interraction with employees on myriad planes, things like grievances, complaints, investigations, recruiting, interviewing, rejecting, accepting, recommending, calling attorneys for counsel, administering the company discipline program, employee relations, union avoidance, gosh how long can the list get? And most if not all of those have little appreciation in the accounting community, or such has been my experience over 35 years. It's as if when you work as a direct report of an accountant-type, you best just not even discuss those issues. Just proceed and explain later. And do it all over again every month. I don't report to a CFO now, thank God. Thankfully it's a national HR executive who reports to another national executive who reports to the corporate CEO/President. Beancounters report to beancounters. And you cannot twist and screw HR professionals into that mold. x:-)

  • I wholeheartedly agree with Don, though my experience is limited to 4-5 years in HR with one company. Initially we had a true HR department that reported to the CEO. Then after the CEO was replaced the HR department was slashed and I reported to the Finance Manager. The HR function of the company was completely undermined and ignored. The CO. was a retail environment and basically HR was the only dept. that did'nt generate $$$. I was constantly assigned tasks like assisting AP and AR. The company is now existing with no HR dept. and the fallout has apparently been disasterous.
    It really is a shame when HR is misunderstood.
    I am now looking into a position with my past company's major competitor that has an HR Rep in every location.
  • And to all the budget analysts out there, I would remind you that an HR Department does not cost a company one thin dime. A good HR person saves a company enough money with one decision to staff and fund that department for two years! It is often an HR department that actually keeps the company's bottom line black instead of red. xclap
  • When I originally was alerted to this post via email, I must admit that I read all of these general assertions with some incredulity and the sneaking suspicion that I was being baited by our ever effervescent Don D. While I may not be specifically the target, it is pointed generally enough in my direction to generate a response.

    I currently wear the CFO hat along with the HR Director hat. I have worn the CFO hat in more than one company, including a 4 year stint in a company that was at one time, the largest privately held corporation in America. I have also been EVP, COO, controller and a CPA. I am not listing these job descriptions to impress anyone, just listing them so you can understand why I might consider myself qualified to respond. In all of these situations, the HR department has reported to me. I will admit that early on, I knew very little about the HR arena, but I made it my business to get training and to hire individuals with the knowledge I lacked. We always made decisions together. HR's input was always solicited when appropriate and although I made the decisions and lived with the results, it was a rare circumstance that I did not completely incorporate thier input. I cannot speak for all of my compadres in accounting, but to label us black and white thinkers without the imagination to see in color is an unfair and inaccurate characterization.

    The wide-spread shotgun bursts that have been aimed at the accounting profession can be said of any of the professions, even HR types. The mundane tasks of administering various facets of any business is generally done by lower paid EEs with varying levels of training - this is true in any department and any profession.

    As one climbs the ladder in any department or profession, you will find some common trends: Those that have higher degrees of responsibility should reflect higher degrees of knowledge dealing with that specific department or profession and, should begin having a grasp of, or an appreciation for the bigger picture. Thus while a supervisor of billing might have an accounting degree, he/she would not be expected to have much depth in HR, however, any EE that is in senior management or with those aspirations, should have a working knowledge of every facet of the companies business.

    While I do not have a SHRM certification as a generalist or specialist, I think I could pass the certification tests just by taking one of the review courses, which I have considered putting on my professional development task list. Now that I am wearing the HR hat instead of having the HR department report to me, I have found it necessary to improve the depth and breadth of my everyday working knowledge with respect to HR. I apply that knowledge on a regular basis and to date, we spend very little on our attorneys and (knock on wood), are not currently having any issues in front of our courts or HR agencies.

    We do have a turnover rate I am not satisfied with (18%) and I am behind on revising our handbook - it is nearly ready for review by legal, but other than that, I think I do a descent job of administering HR in our shop - even for a CFO.


  • I fell asleep Marc, sorry. But, the real question is, what's your response to post number 16? James, I've never heard of your surveys. Do they leave Tennessee?
  • If each major entity or department isn't similarly proving their value, their function should be closely examined. But to say that a single department or function is entirely responsible for a bottom line is disingenuous, unless you are a one person company.

    That said, any company, and I don't think size matters much here, that does not pay attention to the wild, ever changing tie-dyed patterns with which HR is faced on a daily basis is doomed to under performance.
  • Don, the surveys I was talking about are our HRhero.com Monthly Surveys, and they're nationwide. And since they're my baby and I'm pretty proud of them, I hope you'll pardon a little sales pitch.

    We do a different topic each month, like FMLA, attendance, or documentation, and the purpose is to let readers can see how other employers handle these issues. You can see the responses from employers nationwide, or just employers in your state, or private-sector, non-union employers with more than 500 employees, etc.

    You can find out about new surveys -- where you can take them and where to find the results -- in HR Hero Line, our free weekly e-mail newsletter. We'll announce a new survey next week.

    You should be receiving HR Hero Line every Friday morning, since you're an Employment Law Letter subscriber. If not, log into the Subscribers Area of this website ([url]www.HRhero.com/lc/[/url]), and at the top of the Welcome page you'll see "Customize your e-mail services."

    Also in the Subscribers Area, you'll find the results of old Monthly Surveys. After you log in, look for the yellow box on the right.

    Anyone who's NOT an Employment Law Letter subscriber, you can sign up for the free HR Hero Line e-zine here:
    [url]www.HRhero.com/enewsletter.cgi[/url]

    James Sokolowski
    HRhero.com
  • I have to agree totally with Don. After having worked for the last several years, as a member of Sr. Management on the same level as the COO and the CFO, who all report to the CEO.....I'd never be able to start reporting to a CFO or any accounting types. Our CFO's office is next to mine and I hear what others have to go through. No Thanks!

    (PS How come HR professionals don't have letters have their names? Hmmmmm. What about CPO...."Chief People Officer".
  • I have experienced it both ways. My previous employer had a strong finance dept and a weak HR. They ended up dismantling HR leaving just an Admin Asst in charge of it. Bean counters got their wish. Current employer values HR and keeps HR separate from finance. But fortunately, my boss at corporate (who is also HR) has a decent working relationship with the controller. A few bumps now and then, but it is rare finance gets the best of HR.
  • Once again Don is absolutely correct!

    I am the Senior Accountant and HR Director.

    To make sure what Don has explained does not occur here I created 2 job descriptions.

    My limited Senior Accountant duties have me at times reporting to our Controller.

    As for the HR Director, not the case. This reports only to Vice President who understands the whole picture.

    If I had to answer to the Controller on my HR stuff I would have left a long time ago.

    Accounting is black and white.
    HR is fuzzy grey and off white at times.
    The two do not mix well at all.

    And Don, don't you dare come back with a comment about my black and white being a discriminatory statement!
  • How could I possibly challenge someone who remarked that I am absolutely correct? x:-) But, I do want to correct an impression that I think Ray managed to wiggle into the discussion, or at least he seems to have left it with me. I by no means intend to suggest that 'we cannot have decent relationships' with accounting types. Of course we can, AND DO. I just suggest that the functions we are mired happily in do not mix with those they are mired in and they will not mix well in a verticle reporting conduit. One senior level manager cannot reasonably be expected to have the mental capacity to sort that much polar-opposite stuff. We have a real expensive, huge machine here that's an oil separator. But the human mind can't do that job. Marc's intentions are honorable and I admire his achieving what he states. However, we will probably all agree that he is just as much the exception now as he was in the early 70's.
  • Nope, didn't mean to imply you cannot have decent working relationships. But, some posters have indicated frustration as a result of different ways of looking at things and maybe even at times being confrontational. In my case, my boss is an old fart and the controller is a relatively young man. My boss has taken the controller on as a project to train him properly. Works great for me. We have the different points of view, but the actual environment is closer to what Marc describes.
  • In my company it's no problem at all. Even though I report to the COO, who is a MAJOR bean counter, she's kind of like an HR person with a math brain. The other bean counters are all wimps with big, thick glasses and pocket protectors and I can whup every stinkin' last one of them with one hand tied behind my back, so they aren't a factor. It's a great system.
  • >"Thou shalt never place a person of accounting
    >background in any position of administration
    >over Human Resources."

    Sorry I haven't had time to read all the posts in this thread - I've been busy producing accounting spreadsheets in reference to retirement plans. Retirement, and area of benefit that falls under HR and cannot be administered without some concept of finances. The senior level HR person who researches, develops, and recommends benefit plans should know some accounting. The finance department should know something about benefits but usually is clueless until they attend open enrollment. HR knows Section 125 like the back of their hand. I certainly would not want to be placed under the supervision of the bean counters for whom I generate spreadsheets and cost estimates. Working WITH finance is one thing, working FOR them is another. We can weave a decent benefits package (which by the way is a mere small facet of HR)with the cooperation of finance, but it's ludicrous to be the block under them in the organizational chart.

  • You need a respite. Take the rest of the day off.
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