AHRI CEO Lyn Goodear: Good HR is good for businesses

Lyn Goodear


written on November 30, 2015

It hasn’t taken Australia’s assistant treasurer Kelly O’Dwyer long to hit the ground running. In the wake of the Murray financial systems inquiry, O’Dwyer, one of Malcolm Turnbull’s new ministers, left no doubt in anyone’s mind that financial planning advisers must substantially lift their game.

She recently announced that they will be required by law to hold a degree, to undertake a professional year, to pass an exam, to commit to continuous professional development (CPD), and to subscribe to a code of ethics.

One might wonder what standards financial advisers have been required to satisfy if these particulars are now to be mandated under legislation. Aren’t all professional practitioners required to meet standards as fundamental as these?

The reality is that financial planners can gain a basic qualification to practise in little more than seven days. The advice that financial advisers give touches a great many lives and also affects the corporate culture of financial institutions. Yet advisers might be bringing to their practice nothing more than a self-serving desire to make commissions on sales. To say that all financial planners operate in that way would be unfair but to date members of the public have no way of distinguishing between honest and untrustworthy financial planners, and so the former suffer at the hands of the latter whose incompetence or unsavoury practices bring the occupation into disrepute.

Regrettably, almost everything that could be said about the standing of financial planners can be said about HR practitioners.

HR practitioners are not required to hold a university degree, to have done a professional year, to pass an exam, to maintain currency with CPD, or to sign up to a code of ethics.

It might be said in defence of HR practitioners that they are not entrusted with significant quantities of citizens’ money. While that is true, there is ample evidence that the difference between good and bad HR is reflected in the difference between healthy and toxic work cultures, competitive and unsustainable businesses, and happy and miserable employees.

While many HR practitioners have taken it upon themselves to gain an appropriate university degree to inform their professional practice, they are not required by regulation to have done so.

A great many Australian practitioners, around 20,000, are members of this professional association, AHRI, but that is not a legal requirement and many practitioners are not AHRI members.

Professional practising members of AHRI are required, of course, to undertake CPD and they subscribe to a code of ethics and professional conduct which is supported by complaints and disciplinary procedures.

As the HR practising environment is becoming more complex and litigious in a more competitive global business world, AHRI has seen the writing on the wall. And so from January 2017 all practising professional members will be required to undertake a rigorous HR certification credential that sets a high bar for practice.

HR certification requires a minimum professional practising period, the equivalent of a university degree in addition to specific professional knowledge, and also evidence via a mandatory capstone unit that candidates seeking certification can actually do what they say they can do.

An independent National Certification Council has been set up by AHRI to oversee the administration of standards under the new certification regime and to have the final say on the suitability of candidates who have qualified for admission to certification. The first crop of candidates are completing their training this year and will be admitted, at the discretion of the NCC, as certified practitioners (CAHRI-CPs) in March 2016.

In taking this action, AHRI has signalled that, like its counterpart in the United Kingdom, it is heading down the path of self-regulation in the hope that will forestall any moves towards involuntary government regulation.

The human failings within the corporate world that started with Enron and ended with Lehman Brothers and the global financial crisis find themselves repeated too often, and increasingly prompt questions about the role of HR. Inevitably, questions will be asked about what HR was doing in the midst of the recent VW fiasco. HR needs to be coming from a better place to answer those awkward questions, or better still, to play a greater role in their prevention.

To read more about HR certification in Australia visit www.ahri.com.au/certification.

To read past CEO columns, click here.

This article is an edited version. The full article was first published in the December 2015 issue of HRMonthly magazine as ‘A shot across the bows for HR’. AHRI members receive HRMonthly 11 times per year as part of their membership. Find out more about AHRI membership here

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