Is HR needed in a billion-pound company?

Greg Jackson, the founder and CEO of Octopus Energy, sparked a debate last week when he said that he didn’t have an HR department in his £1.4bn company, despite having more than 1,200 employees. It may surprise some to hear that at People Puzzles, we agree to some extent with what Jackson says.

Jackson told the BBC that there was a tendency for large companies to ‘infantalise’ their employees and ‘drown creative people in process and bureaucracy’. Instead, he expects his managers to take personal responsibility for things like disputes and bullying rather than ‘shelving responsibility to a third party’.

When we go into companies, one of our priorities is to get managers able to manage their direct reports effectively so they don’t feel the need to call HR every time there’s a problem.

We also recognise that there is little need for the bureaucracy traditionally associated with HR, now that there are cloud-based systems to take care of things like booking leave and appraisal forms.

However, we don’t recognise the picture of HR that Jackson paints of ‘command and control’ top-down management structures.

Rather, we see our role as an enabler: helping staff develop to the best of their abilities. Helping recruit the best people to take businesses to the next level. Who else is going to focus on staff wellbeing, diversity and inclusion, keeping an eye on latest developments in HR externally – all while devising strategies to promote a strong culture? It’s a big ask to expect every manager in your business to keep on top of it all.

It transpired after the BBC article was published that Octopus has ‘two or three’ recruiters and a chief of staff – which Jackson described as a ‘strategy role’. We would argue that recruitment and strategy are both integral aspects of HR.

We see an HR director’s role as a trusted advisor to the CEO – providing challenge and support when needed – to ensure they have the right people in the right places to move the business forward. We’re in a unique position; as HR involves all of the team we gain a unique, holistic view of the business.

We agree that HR done badly can be a drag on creativity. But it is evolving to meet the challenges we face today. A good people strategy can transform businesses and help them meet the challenges that fast growth can bring. Take a look at some of our case studies to see how.

We would love to carry on the conversation with you on this subject. Please drop us an email on [email protected] or join the debate on LinkedIn.