Today’s Wall Street Journal published an article entitled “Is It A Dream Or A Drag? Companies Without HR.” It discusses the pros and cons of having an HR department, and uses real life examples from start-ups to mega companies, and begins: “Sometimes the only thing worse than having an HR department is not having one.”
This article is sure to generate a lively debate among our readers.
“Startups usually launch without personnel teams, but SHRM advises that companies bring on a human-resources staffer once they reach 15 employees, the point at which personnel issues become complex enough to require specialized skills.”
“Managers often lack specialized knowledge that is crucial for keeping a company competitive and on the right side of the law … If they don’t understand the latest rules under the Family and Medical Leave Act, for example, they can open their company up to lawsuits; if they don’t know where to find qualified engineers, they can end up behind in the battle for talent.”
One quote about Outback Steakhouse’s gamble struck us — we who said today in an earlier post that: “We have always preached preventive law, that is, using our knowledge of employment law and HR practices to counsel employers how to prevent claims, charges or lawsuits from ever happening. It’s far less expensive, time consuming and distracting to spend a little time and money now to comply with the law, than not to do so and gamble that you won’t get sued or be pursued by the EEOC. It’s a bad bet — ask anyone who has been there.”
The Journal reporter wrote that “Outback Steakhouse, a unit of Bloomin’ Brands Inc., had no HR department before 2008 but created one not long after the Equal Employment Opportunity Commission sued the restaurant chain for sex discrimination. In 2009, Outback paid $19 million to settle the case and agreed to add an executive-level HR position (emphasis added).”
One expert was quoted in the WSJ: “‘Whenever you consider eliminating portions of HR you have to think of the financial risk, the strategic risk.”
As we always say: its a bad bet to gamble that you will not be sued and therefore fail to prepare with “preventive HR.”