HR managers are used to taking the blame when things go pear-shaped. It’s just as well because now they are in the firing line for the credit crunch too.
According to Personnel Today, a number of people are pointing the finger at City HR directors for not doing more to prevent the financial sector’s excessive risk-taking and bonus culture. The paper quotes union boss Rob MacGregor:
It takes a brave HR professional to push against these practices and point out that some of the problems the finance industry has been experiencing are down to the culture that exists.
What needs to change is the culture. HR directors have got to be far more independent and dynamic to encourage that culture of fronting up to businesses about the practices that are going on.
Now I’m all for HR directors being more bullish but trying to change something like the City bonus culture would have been suicidal for any HR chief. I used to work in ‘comp and ben’ for an investment bank and I have seen how the culture works. Arguing against aggressive business practices and high remuneration would have been seen as undermining the bank’s competitive position because all the others were doing it too. Up until a year or so ago, these policies were reaping huge rewards. Any suggestion that it might be risky would have been shouted down.
Now things have fallen apart, there may be some in the financial services world willing to consider changing the way they do business and, as there is now slightly less hype and arrogance in investment banking, some of these ideas might just get heard.
But to suggest that City HR directors could have done anything to stop this debacle is fanciful. Like everyone else, they were swept along with a tide that was just too strong to swim against.