Phasing out HR Departments
Critics argue HR departments create unnecessary bureaucracy and slow down decision-making. They introduce excessive policies, procedures, and compliance requirements that make organizations less agile and flexible.
They are said to lack strategic value. HR is often seen as administrative rather than strategic. Many believe HR departments focus on enforcing rules, managing payrolls, and handling grievances rather than contributing to the overall business strategy or profitability.
They overemphasize compliance and risk avoidance. HR departments are accused of prioritizing legal compliance and protecting the organization from liability over supporting employee wellbeing or organizational culture. This risk-averse culture can stifle innovation and trust.
They seem to have poor understanding of business operations. HR professionals are sometimes criticized for lacking commercial awareness and understanding of how the core business works. This can lead to policies that are disconnected from the realities of the workforce or market pressures.
HR departments can be expensive to run and may duplicate functions that could be handled directly by line managers or outsourced to specialist providers that could handle such things as recruitment, payroll, or legal compliance.
Some critics claim that HR departments are rooted in outdated industrial-era structures and are ill-equipped to handle contemporary issues such as remote work, flexible careers, or gig-economy labour models.
They are said to favour one-size-fits-all policies. HR is accused of imposing uniform policies that ignore individual or team needs, reducing autonomy and creativity. HR departments are seen as centralized power structures that control access to opportunities, promotions, and information, which can disempower managers and employees.
With digital tools now able to handle many HR functions, such as recruitment platforms, payroll automation, and performance tracking, some argue that HR departments are becoming obsolete and should be replaced by technology-driven, decentralized systems managed directly by teams.
One of the strongest criticisms is that HR bosses tend to follow fads and fashions such as diversity, equality and inclusion, to the detriment of their firm’s success and profitability. They not only ignore the bottom line, it is claimed, but insist on decisions that run counter to it.
Taken together, these arguments suggest that HR departments may add limited value, create unnecessary friction, and fail to meet the needs of modern organizations, leading some to propose the reduction in their authority or, indeed, their elimination.
Madsen Pirie