HR Executives Views of HR Education: Do Hiring Managers Really Care What Education HR Applicants Have? Lynn M. Shore. Department of Management

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1 HR Executives Views of HR Education: HR Education 1 Do Hiring Managers Really Care What Education HR Applicants Have? Lynn M. Shore Department of Management College of Business San Diego State University 5500 Campanile Drive San Diego, CA Phone: Fax: Patricia Lynch Management & Human Resources Department California State Polytechnic University, Pomona 3801 W. Temple Ave. Pomona, California Phone: (909) Fax: (909) Debra Dookeran Department of Management Baruch College, Zicklin School of Business

2 One Bernard Baruch Way, Box B9-240 HR Education 2 New York, New York Tel: (646)

3 HR Executives Views of HR Education: HR Education 3 Does Anyone Really Care What Education HR Applicants Have When Making Hiring Decisions? As educators in the field of human resource management (HR), we believe in the value of HR training for master s students, but we wonder if the business community shares our perception. That is, does the business community view master s level HR education as valuable, and in fact, do applicants with this type of training have a competitive advantage in the job market? While much has been written about HR education in the last 10 years (c.f., Adler & Lawler, 1999; Brockbank, Ulrich, & Beatty, 1999; Heneman, 1999; Kaufman, 1999; Thacker, 2002; Wooten & Elden, 2001), there has been limited exploration of the perspectives of typical HR managers and executives regarding the adequacy of HR education provided in business school settings. We consider this an important omission, as these are the individuals who are in positions to create policies that affect the hiring of students who we train in the business school. Thus, the purpose of this chapter is to look specifically at HR executives views of the relevance of master s level education in HR in the business school setting. The questions we set out to address include the following: (1) Is there a gap between the knowledge, skills, abilities, and competencies that employers require of HR professionals and the HR education and training that students receive in HR master s programs? (2) If there is a gap, what is its nature? (3) What are potential solutions for closing such a gap and how can HR academics and practitioners work together to implement the identified solutions? (4) After summarizing the executives perspectives, what reflections and suggestions can we provide for improving HR education in the business school?

4 HR Education 4 METHODOLOGY In searching for the answers to these questions, we sought the help of HR managers and executives who we know through consulting or teaching experiences, or who have a connection with one of our respective schools. We administered a survey via to fourteen HR managers and executives who agreed in advance to complete a questionnaire and subsequently to be interviewed. The purpose of the questionnaire was to learn about the backgrounds of the participants and their current employees, and to identify core competencies (i.e., knowledge, skills, abilities) they seek when hiring or promoting candidates into HR positions in their respective organizations. Appendix 1 contains the items in the questionnaire completed by the HR managers and executives, and Appendix 2 displays the interview questions that we asked the study participants. Our purpose in conducting the interviews was to allow the managers and executives to elaborate on some of their questionnaire responses to provide us with a more indepth understanding of issues relevant to HR education at the master s level. Below, we include some quotes from the HR managers and executives that we consider especially informative as well as summaries of the themes that were apparent across the surveys and interviews. The 14 HR executives represent many different types of organizations, and they have quite varied backgrounds. They have spent 21 years on average in the HR field (with a range from 12 to 32 years), and they have held an average of five HR positions during their careers. Ten of the participants (71%) have the title of HR director or vice president. Three participants work in the public sector, one works in a non-profit organization, and ten work in for-profit companies. While all of the executives have college degrees, ten out of the fourteen executives (71%) also have graduate degrees: one MBA, one MBA and JD, one JD, one MPA, three

5 HR Education 5 Master s in HR, one Ph.D. in Human Resource Development, one Ph.D. in Instructional Design, and one Master s in Communications. The executives noted that very few of their employees who work in HR have had formal HR training in either their undergraduate or their graduate education. This fact is particularly striking since 28% of the HR employees in the executives firms hold supervisory, middle management, or upper management positions in their respective organizations. In examining the education levels of HR employees with whom the executives worked, we found that 59% had bachelor s degrees on average (range = 25% to 99% across the 14 organizations), and only 14% had master s degrees on average (range = 0% to 38% across the 14 organizations). Of the 14% of HR employees with master s degrees (consisting of 652 HR employees across the 14 organizations), only 5 HR employees had an MBA with an HR major, 2 had MBAs (not HR), 15 employees had an MS in HR from a college of business, 4 had master s degrees in HR from a college of education, and 1 had a master s degree in I/O psychology. Thus, only 4% of those with master s degrees had formal education in HR. While we don t have data on education levels of employees in these organizations who work outside of HR for comparison purposes, we were surprised at the generally low levels of education (41% did not even have college degrees) in the HR function, and also the few who had formal education in the field of HR. FINDINGS To better report the views of our HR executives regarding the education and development of HR professionals, we have organized our discussion below into two major categories: (1) the role of the organizational context in influencing HR activities, and (2) the core competencies for employees in HR. The organizational context category includes both the general environment in which HR professionals work as well as to the demands and challenges they face in their own

6 HR Education 6 organizational settings. The core competencies category addresses the executives perceived gaps between the knowledge, skills and abilities necessary for employees in HR positions and the competencies their HR employees actually possess. Organizational Context To provide some context for the executives responses, we asked the participants questions about how they define HR, how much autonomy and power HR professionals in their respective organizations enjoy, and how they believe the field has changed over time. In general, the respondents seemed to find it challenging to define HR as a field. Some described it in narrow operational terms (e.g., listing its important functional areas, explaining how HR is structured in a given company, describing it as managing people or as attracting, motivating, and retaining people), while others painted a more strategic picture of HR s role as pushing forward the organizational agenda. There was some distinction between the role HR plays and the role the executives feel it should play. For example, many respondents believe that HR professionals should be strategic partners and have a seat at the strategic planning table; however, that scenario often does not occur. One person used an analogy to describe HR s role, suggesting that even though it is the heart of the organization, when it comes to decision making it is the tail, not the dog. The answers to our question about how much autonomy HR professionals have in each respondent s organization to pursue their ideas and strategies indicate that while they generally have a fair degree of autonomy, often the answer depends on the individual(s) involved and/or the organizational culture. That is, the more credible the HR professional is within his or her organization, the more autonomy he or she enjoys. Regarding how much power HR professionals in the organization have to influence management decisions, responses indicate

7 HR Education 7 that such power is contingent upon a variety of factors. For example, HR professionals who effectively make persuasive recommendations, who know their stuff and give viable options, who are viewed as credible by their clients and whose top management supports the HR area are viewed as having more power to influence management decisions than those professionals who lack these characteristics. To get an idea of what the future holds for HR professionals, we asked the managers and executives about changes in the field of HR in the last ten years. All the respondents agreed that the field has changed significantly and has resulted in gains in credibility for HR in their organizations. The two areas cited most frequently as being responsible for the changes were the proliferation in the number of employment-related laws and regulations, and the increased amount of change and level of complexity faced by today s organizations. Several respondents suggested that the former is responsible for the heightened level of respect for HR in the workplace; others attributed the increased credibility of HR to both the need for legal compliance and to a rise in the level of professionalism of people in the field. A third reason given for the perceived increase in HR s value is that changing labor market conditions (e.g., labor shortages, skill shortages, multiple generations of workers) mean that organizations need more help with workforce planning now than they did earlier. One study participant summed up the changes overall by saying that HR has gone from being administrator of the handbook and benefits to being a core member of the leadership team. Core Competencies Desired Competencies: To assess the existence and nature of a gap between the knowledge, skills, abilities (KSAs), and competencies that employers require of HR professionals and the HR education and training that students receive in HR master s programs,

8 HR Education 8 we asked the managers and executives a series of questions about (a) the HR and general business competencies they consider when hiring and promoting HR professionals, and (b) their evaluations of the extent to which the HR employees with master s degrees possess these competencies in their respective organizations. The question about the core HR competencies for HR professionals fell into three general categories: HR functional competencies, business competencies, and general competencies. When asked which HR functional competencies they look for when hiring, participants identified recruitment/selection (50%), labor/employee relations (43%), compensation (29%), and legal issues (4%). In addition, fourteen percent reported that they seek HR functional competencies that match the position, and 50% listed multiple competency areas or said they prefer an HR generalist who knows all functional areas. When asked which HR functional areas they look for when promoting employees, the HR managers and executives said their criteria are very similar to those used for selection. Additional promotion criteria that some participants listed include a higher level of skills and stronger technical skills in the appropriate specialty area (e.g., compensation) than those required at the lower level, and good employee relations skills. Finally, several respondents noted that they consider general managerial skills as well as written and oral communication skills for promotion to HR manager positions. Next we asked our managers and executives what business knowledge or skills they look for when hiring employees in HR. They listed finance (50%), budgeting or accounting (36%), data base management (21%) and/or IT systems, and strategic thinking, reasoning and problem solving (21%). Other business-related criteria listed include project management, knowledge of operations, a clear understanding of HR and business measurement, and an understanding of HR s role as a business partner. Responses regarding business knowledge and skills considered

9 HR Education 9 when making promotion decisions were quite similar to those used for hiring with a few exceptions. For example, 21% of the HR managers and executives seek general management skills or experience, and 14% listed awareness/sensitivity to organizational culture as an important characteristic. Other promotion criteria included knowledge of business operations, interpersonal skills, written and oral communication skills, and an internal knowledge of the organization. When asked what schools or HR programs they favor when hiring new graduates, the majority of the participants stated no particular preference. In fact, most stated that they prefer to hire individuals who had worked in the HR field, regardless of educational background. A variety of other general business competencies, most of which are thought to be learned only through experience, were viewed as important. These include leadership skills, strategic thinking and proactive planning. Some of our executives suggested that HR programs include workshops for students that focus on skill development in these softer areas, since they assumed these types of skills are rarely included in the HR curriculum. For example, one executive commented that: It is easier to hire someone who has consulting skills and teach them technical skills. The toughest thing is being able to think at a broad strategic level about how the function fits into the corporate structure; the role they need to play/are playing; the ability to change all those things; systems thinking; good conceptual thinking; the ability to conceive things abstractly and discern things which may not be obvious, and turn them into something practical. When asked what new competencies HR professionals will need in the future, the respondents listed contracting skills, ability to obtain resources, ability to handle numbers and

10 HR Education 10 budgets, an understanding of the financial impact of HR actions, an understanding of what motivates people, and negotiation skills. Actual Competencies: The final focus of evaluating employee competencies is the assessment of current HR employees who have master s degrees in HR. Many of the respondents were not able to address these questions because their employees do not have such degrees. Of those who could answer, however, the majority indicated that they are very satisfied or extremely satisfied both with their employees HR competencies and knowledge of HR functional areas. On the other hand, they were not satisfied with the general business knowledge of their employees. One respondent specified that her employees lacked knowledge of contracts and budgets; another stated that her employees knowledge could be better, especially in the areas of finance, financial reports, statistical knowledge, and general economics. When asked what skills their current HR professionals lack, the respondents identified the following: general business knowledge, an understanding of the organization s business needs, basic management skills (outside of HR skills), good writing skills, ability to communicate their ideas effectively, ability to be persuasive, listening skills (one executive commented that HR people tend to do a quick fix instead of listening to what people are really saying), critical thinking, ability to take the complex and make it simple for their customers, ability to multi-task, strategic thinking, and organizational development skills. In short, the responses suggest that there is a sizable gap between the business and general competencies that the executives said are required of HR professionals in their organizations and those that their current HR employees with master s degrees possess.

11 HR Education 11 Perceived Gaps in Master s Level HR Programs After asking the executives to identify the KSAs and competencies required of HR professionals and to assess the extent to which their own HR employees with master s degrees meet those requirements, we asked some questions to determine the gaps that they perceive in HR master s level education in general. Perhaps the most direct and telling statement was made by the executive who said, There s a reason why the Operations Vice President is tapped as the HR Vice President: the HR people can t solve business problems. To address the perceived gaps in HR education the executives offered various suggestions. First, they addressed the question of whether business schools are doing a good job of preparing HR professionals for the future. The overall theme of the answers was that there is too much theory and not enough practical knowledge and skills. For example, one respondent was concerned that graduates don t seem to have a good sense approach to business i.e., they are unable to relate HR to the business or to what is going on in the organization. Another suggested that the schools are doing a reasonably good job within the parameters of academics. However, much of what is needed can be learned only on the job. Other missing links in HR education, as perceived by the respondents, include the following: strategic approaches to HR; exposure to handling conflict (viewed as an important omission because of the amount of conflict HR professional have to manage); a realistic picture of HR s role in an organization (several participants emphasized that they have no use for people who want to enter the HR field because they like people ); ability to relate to the diversity of the workforce, particularly in terms of language and culture; the practical vs. theoretical side of HR; the business side of organizations; business strategy, economics, statistics; real life business scenarios; and measurement.

12 HR Education 12 The executives responses to the question of how business schools could better prepare students at the Master s level revealed a number of themes. One of the most frequently mentioned was the importance of practical experience. The key issue they raised was that educators should emphasize the application of classroom knowledge. Specifically, they suggested that academics consider (a) including case analyses, applied projects in organizations, and HR practitioner involvement (e.g., to review course content or as speakers) as part of the curriculum, and (b) hiring faculty with applied HR experience. They also identified internship and practicum experiences as important learning tools. It was no surprise that the respondents list of KSAs and competencies that they believe should be part of a good HR master s level curriculum reflect the perceived deficiencies listed above. This list includes interpersonal skills; persuasiveness; applied experience (i.e., internship); written and oral communication; understanding of the technical principles of HR (especially compensation and benefits because of the tremendous cost impact they have on organizations); the business side of organizations; how HR fits into the business, and how it can help advance the organization s agenda; HR metrics and accounting; business strategy; economics; statistics; leadership and critical thinking skills; conflict management; and finance (especially the ability to turn data into Return on Investment (ROI) and to talk in ROI and benchmarking terms). One of the themes that were apparent in the interviews was that many managers view the Society for Human Resource Management (SHRM) as the major source of training and development for HR functional knowledge and skills. The majority of managers viewed SHRM certification along with work experience in HR as adequate for learning the functional aspects of

13 HR Education 13 the field. However, some of the participants commented on the inadequacy of SHRM and the American Society for Training and Development (ASTD) for higher-level managers and executives in HR. At one time, ASTD and SHRM were very fulfilling for me. But now, I have to prepare white papers for my ideas. I am in a more strategic role and these organizations are incredibly ineffective for me. It is too low level now it s about learning through collaboration, storytelling about when things have gone wrong [and] when they have gone right. Likewise, many of the HR managers argued for the importance of understanding the business or organization. A criticism of traditional HR education was the emphasis on teaching HR functional skills to the exclusion of business knowledge and skills. Below are some representative comments. It is important to understand what drives business decisions or have the ability to learn how a business functions. One disconnect of HR: great ideas but do not understand what s driving costs [and] constraints, and [who] values business processes. They must tailor what they say and do into the organizational context. I would prefer someone with a business and HR combination. Master s education programs are getting very specialized being too narrowly focused is not good, need to encourage connectivity. HR needs to know HR, but also needs to know business specifically, your business. HR professionals need to get out, walk around, check out new equipment, learn people s names. These things help if later you have to displace people you know what they ve been doing. You

14 HR Education 14 can t be isolated in an HR strategic tower; have to balance strategy with operations. The HR managers also had concerns about traditional MBA education, which often does not include a required HR course. They were concerned that this makes the value of HR less apparent to many people in business. Most MBAs are in finance. They don t see HR as an integral part of strategy and planning. MBAs don t get the soft costs of labor vacancies, shortages (e.g., worker s compensation, replacement costs, lost productivity, training, etc.). They look at the bottom line only, while the real costs may be three times those numbers. ROI models are the biggest frustration. Finance people want to hear financial terms so HR professionals need to speak this language and use these models. ANALYSIS AND DISCUSSION Our analysis of the executives views reflects our own orientation to HR graduate education. Specifically, we view HR as having an interdisciplinary foundation, but as a distinct field with an identifiable knowledge and theory base that should define the education of HR academics and practitioners. In this section we respond to the information shared by the executives about their employees and the practice of HR in their organizations, as well as their perspectives on the field of HR. As part of our discussion, we make a number of recommendations for academics and practitioners alike. HR as a Distinct Field One surprising result was the difficulty that the HR executives in this sample had in defining the field of Human Resource Management. Even when they did define it, their

15 HR Education 15 descriptions varied widely as noted. In retrospect, this point may be the cause of some of the other issues that we discuss below. Because of this confusion, we would like to begin our analysis by making the case for HR as a distinct field. Before we can make the case that HR is a field unto itself we have to be clear about what it is and what it is not e.g., it is not organizational behavior (OB) or the legal field or industrial/organizational psychology or management, although all those areas influence HR. However, defining the field of human resource management (HRM) and drawing clear boundaries between it and each of the other related fields poses an immediate challenge to HR academics and practitioners. As a starting point, we draw upon the Academy of Management (AOM), the major professional organization for academics in the business discipline of management. Members of the Academy of Management draw a clear distinction between HR and organizational behavior (OB), as demonstrated by the descriptions of each field on its web site: The Human Resource Division is dedicated to a better understanding of how work organizations can perform more effectively by better management of their human resources. That is, we are interested in understanding, identifying, and improving the effectiveness of HR practices in the various functions and activities carried out as part of HR and determining the optimal fit between these practices and organizational strategies, cultures, and performance... (AOM, 2004). In contrast, the domain statement of the Organizational Behavior Division is the study of individuals and groups within an organizational context, and the study of internal processes and practices as they affect individuals and groups (AOM, 2004). Clearly management scholars view HR s domain as encompassing the functional aspects of HR and how they advance organizational goals, and OB s focus domain as examining individual and group processes and behavior within

16 HR Education 16 organizations. The fact that HR executives do not see such distinctions challenges HR scholars to more clearly communicate, through multiple forums, the domain of the HR field and the value of business education as a means of developing the competencies specified in the domain. An important question is why the HR discipline suffers from a lack of clarity. One reason for this turn of events is the relative supply of, and demand for, academics trained in functional HR as compared with those trained in related areas such as OB. Professors in Management Departments who have not received training in HR may have little understanding of the field, and may assume that anyone trained in a behavioral science discipline, such as psychology or sociology, is qualified to teach HR courses. Another reason for the confusion is the diversity of academic programs that label themselves as HR. Currently in programs across the U.S. there are different versions of professional HR education, all subsumed under the HR name. These programs are presented through schools of business, industrial relations, psychology, and education. Each type of school has a different focus and in turn, its graduates may have different strengths and weaknesses. Most importantly, many programs with HR labels do not train individuals across the entire HR field, limiting the contributions that both academics and practitioners from these programs can offer organizations with complex human resource and business problems. This diversity in HR programs contributes to confusion among managers in the field with regard to what HR education has indeed to offer their organizations. What can we do? First, academics and practitioners must define the HR field and its boundaries, and develop programs that reflect this definition. Second, academics and practitioners must communicate that information clearly to the public. Partnerships between academics and practitioner professional associations such as SHRM, ASTD, Human Resource Planning Society and World at Work could help to achieve this goal to the benefit of academics,

17 HR Education 17 practitioners, and ultimately to employees and organizations. Third, HR executives need to get involved in business schools, making clear the value of HR trained graduate students for their organizations. In short, they must create a demand for the courses and programs that will educate future HR employees in the areas that organizations require. Fourth, academics and practitioners should put pressure on so-called HR programs (i.e., those who offer few or no HR functional courses) either to overhaul those programs so that they do include the functional HR areas or at least to define clearly what domains they do and do not represent. A consensus on standardized HR training seems critical. It is necessary for leaders in the HR field, both academic and practitioner, to agree on the major core content of qualified HR programs in order to ensure consistency in the graduates they produce. This outcome will help to clarify for executives and prospective HR professionals the value of HR master s graduates to organizations. Creating Buy-In for HR Master s Degree Programs Before we leave this topic we would like to offer our own view of how HR should be defined. We would like to see HRM perceived and operationalized as a recognized partner in an organization s leadership structure. The reason HR exists is to help the organization achieve its goals, which means that it is concerned with every aspect of the business. One HR executive in our sample provided the following example of what such a vision would look like: if an HR manager asks a production manager what keeps her up at night and the response is, I ve got 10 defects per 100 items and I need to get it down to 1, the HR manager can help IF that manager knows that this is an HR problem and is willing and able to explore a variety of alternatives to address it. Another executive reported that despite one applicant s relative lack of HR experience, he hired her on the spot because she understood HR s role in the organization. Specifically, in response to his question about why she wanted to get into HR, the applicant

18 HR Education 18 replied that HR is the only function that touches all areas of the business. In this response lies the key to the re-awakening of HR. Another finding of our study which was quite thought provoking was the low number of HR employees with college degrees, particularly advanced degrees. This implies that HR remains as one of the business areas in which lower levels of knowledge and fewer competencies are accepted than in other areas. Based on the conversations with the executives, there appear to be a number of reasons why they do not hire HR-trained applicants for HR jobs. One is that non- HR-trained employees do a good enough job and either bring other skills to the table or are trainable, so they see no need to seek out HR graduates. Another is a perception that HR graduates don t add value, as demonstrated by comments that indicate that such individuals are focused too narrowly on HR and/or they don t know the business of the organization and cannot or will not be open to framing business issues as HR issues. As a point of departure, we recommend that greater emphasis on education for hiring and promoting people in HR would have multiple benefits for organizations. Better educated HR employees are likely to have broader exposure to a variety of disciplines, as well as have greater knowledge and skill. More highly educated HR employees will have greater credibility in the organization. With low education requirements for its jobs, HR is likely to continue to be viewed as an administrative function rather than as a strategic function. A related concern is that students may not perceive HR as one a path to a successful business career, so in their graduate programs they do not specialize or concentrate in HR. While there are thousands of successful business executives with HR backgrounds, students seem to need more convincing that HR is a worthy path to a successful business career. For example, compared to graduate HR programs, MBA programs are marketed more aggressively

19 HR Education 19 as the path to success in the corporate world. Additionally, the financial, operations, and marketing backgrounds of the top CEOs may lead students to believe that these paths are the only valid means to the top of the corporate world. The regular appearance of HR issues in the courts may also add to the perception of incompetence of HR professionals. This perception suggests that HR program content must be more explicit about the impact HR professionals can make in organizations and engage students in mentoring relationships early in their programs. We were struck by the small number of HR employees within executives organizations who have advanced degrees in HR. This may be due partially to the locations in which we conducted our interviews (Georgia and California). There are few MBA and MS programs in HR in either state, and only California has ONE stand-alone industrial relations program. Since all of our HR managers recruit locally, they likely are used to hiring individuals without degrees in HR. This suggests the importance of degree programs in HR throughout all regions of the U.S. if the desire is to professionalize the field. An alternative explanation for the low number of HR degrees among employees in participants organizations lies in the background and experience of the executives themselves. The lack of HR education, in fact, reflects the career experience of many of our participants. Most of those individuals who had either MBAs or MS degrees in HR worked in the field of HR prior to obtaining those degrees. Thus, the graduate degrees likely were not for the purpose of working in HR, but for moving into managerial positions. One unstated possibility is that some executives may believe that since they didn t need an HR education, neither do their employees. Consciously or unconsciously, they are hiring those who are similar to themselves. On the other hand, one private sector executive who started her career by working as a secretary with a high school degree and ended up as a VP of HR reported that she will recommend strongly that her

20 HR Education 20 successor be someone with HR education and experience. Thus we must ask the question as to whether there is a market for people with business degrees who specialize in functional HR. While we didn t investigate the market-related issues discussed in other chapters, those of us who teach HR in the business school need to consider these issues. Related to the above point, we were troubled by the executives stated preference for hiring individuals who have worked in the HR field regardless of their educational backgrounds. Such a preference is problematic for two reasons. First, on-the-job training necessarily involves trial and error, so one cannot assume that everything an individual has learned by this method is correct. Even if it is correct, it may not be acceptable to the hiring organization. Second, the discussion above shows clearly that executives have very different ideas about how to define the field of HR. Thus there is no guarantee that their views are shared by individuals who were trained in other organizations. Far from having a competitive advantage, such candidates may have to be re-educated in some or all areas of HR to fit the hiring organization s needs. Finally, we noted an almost universal view that functional HR could be learned through SHRM courses combined with on-the-job experience. For the reasons described below, we explain why we disagree with that perception. According to its mission statement, SHRM is committed to advancing the human resource profession and the capabilities of all human resource professionals to ensure that HR is an essential and effective partner in developing and executing organizational strategy (SHRM, 2004). In order to do this, SHRM offers a variety of educational programs for HR practitioners from beginners through executives. Although information about the programs on the SHRM web site indicates that some programs are taught or facilitated by academics, most instructors seem to be practitioners, some of whom have earned the SPHR certification. In spite of such a

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