The Human Resources Evolution: From administrative afterthought to strategic partnership
A pharmaceutical company’s recent job posting for a human resources manager cited three key responsibilities of the position: create an integrated strategy for advancing business; provide tactical coaching to managers; implement leadership development initiatives. It was public confirmation that the days of the human resources manager relegated to the administrative tasks of keeping employee files current, managing benefits and coordinating terminations were over, as corporations integrate their human resources managers into corporate decision making. Increasingly, organizations are viewing human resources managers as strategic partners who can influence future success.
“The function is now more proactive as opposed to reactive,” remarks Carl Jefferson, national president and CEO of the National Association of African Americans in Human Resources.
Less “clean-up” duty
Jefferson is the chief people officer at Al Copeland Investments Inc., owner-operator of a range of enterprises that includes restaurants, hotels, a food-processing company and comedy clubs. During his more-than 17 years as a HR practitioner, he says, HR managers have begun to do less “clean-up” duty, as their function focuses more on people processes and performance-enhancement programs. The reason for the shift, he says, is a new, pressing need for specific types of services and competencies to support the leaders who are operating the business. In a rapidly changing, technology-driven global market, a new diverse work force will be needed to take products to market and boost brand recognition. Human resources management is essential to determining the best way to use these different facets of talent.
While external forces played a part, human resource professionals have been setting the groundwork for this shift for years, experts say. “HR managers have been building a case for their relevancy and working to partner with other functional managers to drive businesses forward,” says Deirdre L. Cash, HR manager at the Paco Group, a programmanagement and construction-management consulting firm. “Managers realize that there is increased turnover, that they have disgruntled employees and that profit could have been better, and are beginning to see the added value HR can bring to the organization’s profit, culture, employee relations and operations,” she notes.
William Rolack, president and CEO of the Greater New York Chapter of the NAAAHR, adds: “Human resources professionals are making new contributions to their organizations by taking the challenge head-on of linking the companies’ strategy, people and performance.”
The merger and acquisition process offers another example of how the role of the HR manager has evolved. Ten years ago, HR management, the one-time afterthought group, would not be at the heart of this major corporate decision. Fast forward to 2008 and managers are now sitting in on early discussions, as leaders turn to HR for its expertise. “HR possesses the knowledge and skills needed to conduct an internal culture check, evaluate the compatibility of both corporate cultures and offer options for merging all resources,” Cash says.
In an acquisitions guide prepared for HR managers, Deloitte Consulting lists HR accountabilities during the early phase of a buy-side transaction. The list includes “defining employment characteristics of the new team and its executives,” “setting terms in the purchase agreement around the disposition of employee equity” and “allocating structure retention funds.” “Excluding human resources from these kinds of discussions is now considered an infraction of due diligence,” Cash declares.
HR departments are bound to encounter new challenges as they take on a more results-driven, proactive and consultative role. When The Boston Consulting Group and the World Federation of Personnel Management conducted a survey of more than 4,700 executives worldwide to determine the top challenges of the future, they found that the most critical challenges fall into three strategic categories: developing and retaining the best employees; anticipating change; and enabling the organization. Many organizations are already beginning to address these challenges.
Retention. Addressing the retention challenge focuses on managing talent and on leadership development. To this end, HR professionals are launching mentoring programs, as well as business resource groups that allow employees to meet with people outside of their business units to share ideas and voice concerns. Some companies are implementing succession-planning initiatives. The goal not only is to boost retention but also to ensure that employees are ready for new leadership roles when the opportunities surface.
Other companies are introducing work-life balance programs in order to retain top talent.
The 10 companies on Fortune’s “100 Best Companies to Work For” list with the smallest percentage of employee turnover allow employees to telecommute. Nine offered a compressed workweek option, while seven permitted job sharing.
Anticipating change. This involves managing emerging demographics and globalization. “There is a serious talent war to find the right people with the right skills sets for available jobs throughout America, mainly because of the aging population and the increasing worker shortage,” remarks Rolack. To win the war, many organizations have expanded their recruitment efforts into the global market — essentially bringing people to the jobs against taking the jobs to the people.
Rolack, the diversity manager for Adecco USA, has seen this process in action. When an Adecco General Staffing client in Germany had difficulty finding engineers with a desired skill set in Germany, Adecco searched its global pipeline for individuals with the needed skills and identified candidates in the Czech Republic. The client eventually relocated the engineers from Prague to support their operations in Germany.
Companies also will need to look at how to best attract and retain skilled minorities and women if they want to maintain their strength in the talent pool. Cash contends that more companies are taking notice — and should continue to take notice — of women and minorities and realize that they come prepared with great talent. According to Rolack, women and minorities will account for three out of every four new hires in America in the very near future. They are becoming the talent pool of choice, he says.
Enabling the organization. This involves transforming HR into a strategic partner. As a strategic partner, the HR professional becomes a true consultant who analyzes, responds and makes viable recommendations that impact the business beyond the aspect of the human capital. It is up to HR professionals to take the lead in ensuring this transformation, HR executives say.
For Cash, learning how to speak the language of executives, plus understanding the business drivers, legal and regulatory issues, as well as current affairs, is essential in gaining the executive trust required to become a partner. This has led thousands of HR professionals to seek certifications from organizations such as the Human Resources Certification Institute, the credentialing affiliate of the Society for Human Resource Management, the world’s largest association devoted to professional human resource management. HRCI certification candidates doubled to 18,500 between 1995 and 2005, while about 92,000 HR professionals worldwide have earned and maintained credentials from the institute this year alone.