Work in the 21st Century: The Changing Role of Human Resources
Karen E. May
Terranova Consulting Group
There are an incredible number of pressures on today's organizations. To name a few: environmental pressures such as increasing globalization, rapid technological change, and tougher competition; organizational changes such as new organizational alliances, new structures and hierarchies, new ways of assigning work, and a very high rate of change; changes in the workforce, including employees' priorities, capabilities, and demographic characteristics. Within these pressured organizations, there is a need for (and opportunity for) the human resource function to play a critical role in helping organizations navigate through these transitions. In order to play this role, however, HR will have to increase its real and perceived value.
The role of human resources has been evolving for some time. The shift from "personnel" to "human resources," for example, was part of the movement to acknowledge the value of employees as an organizational resource, and was an attempt to remove some of the stigma that was coming to be associated with slow, bureaucratic personnel departments. This shift in label was accompanied by a call for HR to become a strategic partner with the leaders of the business-to contribute to significant business decisions, advise on critical transitions, and develop the value of the employees-in short, to have a seat at the table.
Dave Ulrich provides a clear path to the next generation of HR with HumanResource Champions:The Next agenda for Adding Value and Delivering Results (1997). He describes a multi-faceted approach to delivering HR services that meets the needs of both employees and employers, and positions HR as a significant contributor to organizational success.
Ulrich presents his approach in terms of deliverables, or outcomes, for which HR should be responsible: strategy execution, administrative efficiency, employee contribution, and capacity for change. In the course of delivering in these four areas, he describes four corresponding roles for HR to play within a business: a) as a strategic partner working to align HR and business strategy, b) as an administrative expert working to improve organizational processes and deliver basic HR services, c) as an employee champion, listening and responding to employees' needs, and d) as a change agent managing change processes to increase the effectiveness of the organization. One of unique things about Ulrich's approach is that it is includes all of the ways that HR can deliver value to an organization, rather than shifting focus from one area to another.
Similarly, Johnson (1997) describes his experiences in executive search in which CEOs describe the HR leaders they want to hire. They want people who will be successful business partners, strategic thinkers, and people who will understand the pressures of running an effective business in today's market. He reports that, when hiring a leader for the HR function, most CEOs ask for someone who is, "not a typical HR person," and that most of the successful candidates describe themselves that way. This trend reflects the common perception that HR "business-as-usual" is not prepared to meet the challenges that today's businesses present.
Making the shift to a new HR role will raise unique issues for every HR group that attempts it, but there are some common steps and activities that will increase the likelihood of success. Some of these steps and activities are:
- Strong HR leadership. As with any major change effort, a strong leader can develop a clear vision, motivate others to share that vision, and help them work toward achieving it. In order to change the role of HR in an organization, the HR leader will need to work both within the HR group and with the organizational leaders to reshape everyone's expectations of what HR can and will deliver. The success of the change will depend upon HR's ability to meet the real needs of the organization and the credibility it develops.
- Acute future orientation. One of the ways that HR can provide value is to understand how changing environmental, organizational, and workforce factors will likely influence the business, anticipate the associated HR needs, and be prepared to deliver appropriate solutions to meet those needs. By maintaining a focus on workplace trends, for instance, HR can prepare to evaluate the impact that particular changes are likely to have on an organization's people and processes, and be prepared to work with the business leaders to decide how to respond-being ahead of the curve, not behind it. For example, one movement that is likely to have significant impact on the way people are hired, managed, and valued is that of intellectual capital. A "new role" HR department is one that has learned about intellectual capital and its implications, evaluated the impact on current practice, and developed ideas and recommendations for changing HR practice and other business processes.
- Flexibility and creativity. An HR group that is successful in the future will likely be one that is responsive to the changing needs of its client organization. Responsiveness in the changing world of work will require being flexible-as the organizations change, so will their needs and priorities. In addition, traditional activities and processes may not be sufficient to meet the unique needs of the future-HR leaders will likely rely on creativity of their groups to achieve effective results. Increasing globalization of the market will create a need for both flexibility and creativity as businesses try to succeed in new locations, with a new workforce, and with new customers.
- Delivering value. Although this is not a new challenge for HR, it remains a critical one. HR is still perceived by many within today's organizations as simply a non-revenue generating function. It is important to make apparent the value provided by working with the management team to hire the right people, manage them well, pay them appropriately, and build a working environment that encourages success. Beatty and Schneier (1997) extended the concept of delivering value within the organization by arguing that HR must deliver economic value to the customers, as well as to employees.
Here is a sampling of strategies that I have seen implemented as HR groups work to respond to environmental and organizational changes, become more valuable, and deliver results.
- Business unit assignment. Some companies are assigning HR employees to specific business units as a way of enabling them to develop a focused relationship with a small part of the business. This relationship can be enforced when the HR person has a direct reporting relationship with the leader of the business unit. In these situations, the central HR group usually provides information and services to the "distributed" HR representatives, who then deliver the service personally to the business unit. One advantage of this structure is that it fosters the flexibility and creativity mentioned above, as the local HR people can modify and tailor processes and services to meet the needs of their assigned business units.
- Centers of excellence. As organizations grow by merger and acquisition, they often find themselves with multiple HR groups. These can be duplicative or complementary. When they are duplicative, they can be subject to (painful) downsizing and consolidation, leaving behind a department that is unable to serve all areas of the business as well as they had been accustomed, which can, in turn, undermine the credibility of HR. An effective response to this issue is to utilize the multiple HR groups differently. One approach that seems to work well is to develop "centers of excellence," where the HR groups in different parts of the company develop their expertise in a particular area and serve the needs of the larger company in that area-HR groups operating within this model can see each other as resources rather than competitors, and the company benefits from high levels of expertise in a number of areas.
- Consulting model. A number of HR departments with whom I've worked have adopted a consulting model of providing service. They view their internal customers as clients, learn consulting skills, and take their client satisfaction as a measure of their success. In one large high-technology firm, internal clients whose needs cannot be met by the internal HR group can go to external service providers directly-even for basic HR needs.
- Job rotation. One way to bring the perspective of the business into HR-and vice versa-is to rotate line managers into the HR function for periods of time. These individuals often serve as reality checks for the HR group, and then bring an increased understanding of the value of HR back to their line function when the rotation is over. This approach seems to work best when the duration of the assignment is sufficient to allow the rotated individual enough time to become proficient in some area(s) of HR and when he or she is working closely with experienced HR people who can help them learn. Sending HR people into other areas of the business can serve a similar purpose.
- Increasing line managers' capabilities. Part of the future HR model is that responsibility for HR activities is shared between line management and HR people. This approach allows the manager to be more fully involved in the development and direction of employees, with HR as a resource; it requires, however, that those managers have the capabilities needed to work through issues with employees successfully. Many companies are therefore increasing line managers' access to information. Many of today's HR information systems and integrated HR systems put tools and data on each manager's desktop.
It is clearly time for a quantum leap in the HR field, and I/O psychologists working with and for HR professionals can support this transition by taking seriously the organizational pressures to change, helping to identify ways to measure the value delivered by HR, and conducting meaningful research related to all areas of human performance in tomorrow's organizations.
In the next column, I will be contributing to the special edition of TIP by interviewing one or more business leaders about their perspectives on our field. As always, I am interested in hearing from you. Please call, write, fax, or e-mail me at: Terranova Consulting Group (formerly Human Resource Solutions) 61-F Avenida de Orinda, Orinda, CA 94563, Phone (510) 253-0458, Fax (510) 253-9432, firstname.lastname@example.org.
Beatty, R. W., & Schneier, C. E. (1997). New human resource roles to impact organizational performance: From "partners" to "players." In D. Ulrich, M. R. Losey, and G. Lake (Eds.), Tomorrow's HR management: 48 thought leaders call for change. Boston: Harvard Business School Press.
Johnson, H. E. (1997). "Don't send me one of those typical human resource people": A true life adventure story. In D. Ulrich, M. R. Losey, and G. Lake (eds.), Tomorrow's HR management: 48 thought leaders call for change. Boston: Harvard Business School Press.
Ulrich, D. (1997). Human resource champions: the next agenda for adding value and delivering results. Boston: Harvard Business School Press.