“What’s in a Name?” (People vs Personnel)

Digging through some old papers as part of a wet weekend clear-out, I came across an offer letter for a role from a previous life. It triggered a flood of happy memories, but also got me asking myself, “What’s in a name?”

In April 2002 I was offered the role of ‘Director-People Continuity, Western Europe’, based in Belgium and working for the world’s largest brewer. The role reported into the VP People, Western Europe, who reported into the Global Chief People Officer. How excited and lucky was I?

The role itself was a great one, accountable for topics such as succession, talent development, leadership development, and training across a region with over 22,000 employees. In a nutshell, it would be my job to ensure we had a continuous stream of talent coming in and moving through the business, who not only had the right skills, but critically the right cultural fit to succeed.

But I remember struggling with the functional descriptor – ‘People’.  HR yes, but being described as a ‘Director – People’, was a new one to me and a lot of my colleagues and contacts nearly 20 years ago. I was intrigued, but despite checking with my network and searching other organisations, ‘People’ as a function just was not that prevalent. It existed, in certain organisations, but they were the outliers, seen as being ‘trendy’ or self-consciously ‘cool’. Looking back, it’s clear that it was circulating in some thought leadership pieces and articles from some of the consulting fraternity, so in hindsight, it’s apparent that the ‘people’ function would be landing soon in some shape or form.

Our function has changed name perhaps more than any other since it was first conceived – way back in the Industrial Revolution – when the principle that ‘happy, healthy workers = a successful organisation’ was first floated. This evolved over time to cover industrial relations, and Human Resources as a discipline became a defined and essential business function. Yet it continued to adapt and grow, taking into itself new areas of expertise, for example, also covering the latest thinking around Organisational psychology, behaviours, and engagement etc.

It became clear that creating processes, structure and routines would enable organisations to make the most of their so-called ‘human capital’. Alongside this cold descriptor, ‘Personnel’ became the adopted name – offering, so people thought – a more human side. These individuals were often referred to by operational managers as the “tea and sympathy brigade”, and who viewed their primary function as keeping them out of trouble and solving employee problems.

During the 1950s and 60s, it became clear that linking people to the organisational strategy was a proven enabler of success, and many senior leadership teams grew with the addition of a Personnel Director. This individual very quickly established themselves alongside the FD at the CEOs right hand – and it nearly always was a man back then. The use of the name ‘Human Resources’ became more widespread, replacing ‘Personnel’ as the title du jour, and evolving further – introducing science and data alongside professional expertise to provide more evidence-based insights to shape and drive processes, systems and people.

Even then, it was still often seen as an artificial part of an organisation, not like the real world of sales, production, or marketing. HR was a cost-base – a source of expenditure without income, only useful when it came to a restructure, reduction, or an industrial relations snafu. In an ongoing joke, it wasn’t uncommon around this time to hear operational leaders refer to the function as ‘Humane Resources’.

As we entered the 90’s it was becoming clear that the traditional drivers of attracting and retaining great talent were becoming more values based and moving away from the more traditional offerings, around packages and benefits. The phrase “psychological contract” entered the vocabulary, and the topic became a hot one for senior leadership – creating the opportunity for our function to push to become a strategic partner. And so, the name above the door became more important to signal our true purpose and value. ‘Personnel’ was old school, often seen as derogatory (nameless, faceless, myriad bods); Human clearly better, but then quickly sunk again by the term ‘Resources’ directly afterwards. So even back then the concept of ‘People’ was resonating, even if not as a descriptor, perhaps the most simple and accessible of them all.

The realisation was growing that no organisation would succeed without ‘right people, right place, right time’ as a guiding principle. The role and value-add of our function became embedded in strategy as CEOs and Boards came to realise that without the right people, who had the right skills and cultural fit, being properly engaged by the purpose and vales of the organisation, there would be no sustainable success. It was this dawning realisation that has led to the rise of the ‘people’ function. In the last fifteen years, the Chief People Officer has the norm, rather than exception. Naming what we do the ‘People’ function identifies the broad and vital remit many CPOs (and their teams) cover, thanks to the way our function has evolved, bringing together many activities under one roof.

That all being said, according to the latest data for FTSE 350 companies there are only 54 CPO/HRDs officially attached to the Executive Leadership Team and only 160 identified as being part of the Senior Leadership team. There is still a long way to go to achieve parity with other functions, although our function does fare well when it comes to diversity with over 70% being female in the overall 350 group.

And it is thanks to the work of those early Personnel directors and HRDs that leaders today are well on their way to understanding how critical to future success, an organisation’s people are. Recent events have bought topics like employee well-being, diversity, and sustainability sharply into focus, all of which have a bearing on the happiness & healthiness of your people.  As leaders recognise that there is only one true differentiator and creator of success, and that “element” has a choice about where it works and how, they will need to focus ever closer on the People function to help them build and maintain success. It turns out that my bosses of 20 years ago were ahead of their time, recognising that, as ever ‘it’s all about the people’, not about personnel or capitol or resource…

If you would like to confidentially discuss how Norman Broadbent Group could help you overcome your business or people challenges, please contact Nick Behan on +44 (0) 0207 484 0106 or via nick.behan@normanbroadbent.com