No need for HR - says former Facebook VP

Chamath Palihapitiya, founder and CEO of Social Capital and former Facebook VP, makes no secret of his views on HR departments. In a recent episode of the popular All-In podcast , the billionaire venture capitalist explained that companies in which he is a majority owner not only don't have an HR department, they don't even have a single HR person. He says there is no need for HR, you need to structure the company differently.

If there are legal issues (drafting employment contracts, termination, internal regulations) or employee complaints, he outsources them to a law firm. This service provider will act as a third party, impartial, specialist, guaranteeing confidentiality and a fair investigation.

Of course, an HR department is not only concerned with legal issues, but also with the well-being, recruitment and training of employees.

Palihapitiya relies on employees for these tasks: empowering them, giving them more responsibility. Employees can set up their own board (committee) in a department. Diversity is an important aspect here, but not in the classic sense of gender, age, colour, but in terms of life situation. For example, a team might include a family member, a single person, or an employee caring for a sick partner.

Members thus protect the interests of certain groups and seek compromise with each other. In the end, the fringe benefits package they put forward is voted on by all employees in the company to decide which is best for them.

Employees are interviewed strictly by their line manager. Billionaire says this is necessary because HR people often lack the expertise to know what skills are critical in different roles.

Palihapitiya also pointed to the dangers of HR overkill. "The role of HR people is often likened to that of police officers or commissars in companies.

The businessman noted the dislike of HR in companies. He has yet to see an example of it working well in the long term. He says in many cases they slow down the progress of companies. "That's why I give employees the opportunity to determine for themselves what they need If you want more bonuses, hire better people," the businessman said. He added that he always makes sure to identify the 5 to 10 percent of employees who are the worst performers at the end of the year. They either have to be upgraded or laid off or transferred to another department

In the discussion, it was asked whether the HR function is then administrative, for example, payroll, statistics and surveys to support management. Palihapitiya says not even that, there is already excellent software for this that can do the administrative work quickly.

Aron Markovics