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The Evolution of HR

August 27, 2014, Eric Friedman - Human resources as a strategic influencer
The Evolution of HR

“Personnel”—this is what the human resources department was called not so long ago. The personnel department of years gone by mainly handled employee grievances and strikes, issued paychecks and bonuses, and acted in a mostly administrative function.

The advent of new Technology, advances in interpersonal and professional communications, and the fast-paced business world have all led to an evolution in the role of the HR department. Add to that the changes to employment law, the rollercoaster economy, and the “Gen Y” or “Millennial” generation entering the workforce, and you can see why the HR department has had to evolve. The present corporate world is entrenched in top talent acquisition and retention—finding, attracting, and keeping the best candidates out there. Companies have come to rely on human resources for these functions, thus extending the reach of the HR department into strategic planning on an organization-wide level.

From the day-to-day operations that all human resources departments must handle—such as compensation, benefits, compliance, labor relations, workers’ comp, diversity in the workforce, etc.—the functions of HR professionals have become more strategic. Among the new functions as a strategic partner, HR departments must now manage the following tasks:

1) Business Planning. The HR department has evolved out of the solely administrative side and into the business side of companies. Organizations depend on information from different departments to make decisions and make sure the business successfully moves forward. HR is now a supplier of information that has become paramount in ensuring a business’ success. The Company’s vision and mission must be supported by its employees, which is part of why HR’s new role has become so important to companies’ goals. The input that HR can supply to a Company’s business strategy has effectively turned its role into that of business partner or consultant.

2) Talent Acquisition and Retention. The role of HR has increasingly become more about attracting top talent and making sure they are nurtured and happy enough to stay on a long-term basis. With the growth of the talent pool (more people graduating from college, obtaining higher level degrees, accumulating work experience through internships, etc.) and the increase in competition for hiring that talent (more companies are operating today, from small start-ups to 100-year-old corporations), the task before HR departments isn’t easy. They have to strategically plan the type of talent the Company needs to succeed, find the candidates, attract them to the Company, and make sure they stick around.

3) Company Culture. A way to attract and keep top talent is through a Company culture that appeals to the type of candidates a Company seeks. The HR department’s role has evolved to include the development of a clear Company culture that represents the organization’s values and attracts desirable candidates. Everything from ice cream happy-hour Thursdays to a flexible work from home option; from daycare available onsite to lounge areas for brainstorming sessions—it matters how the Company shapes itself to attract potential employees. It has become HR’s job to make sure the Company culture is synched with what top talent (as defined by the Company’s needs) values most.

4) Performance Management. The HR department has traditionally been an advocate for employees—making sure that their needs are met, that any issues are resolved quickly to their benefit (and the Company’s), and that they’re generally happy with their jobs. This traditional function has evolved to include a kind of performance management that evaluates employees’ skills and potential and designs a system to move the workforce forward. This mobilization means promoting employees who excel at their jobs and who have expressed an interest in advancing their careers with the Company. Developing, managing, and analyzing performance reviews is now a key function of HR, which works closely with managers and senior-level staff to make sure the right people continue to move up the corporate ladder.

5) Training and Development. Finally, offering career training and professional development opportunities to staff has become a cornerstone of the modern HR department. A Company’s success depends on its employees being equipped with the skills and training needed to effectively compete in the industry and drive the Company forward. Offering these types of opportunities (including offering opportunities to pursue higher education, like obtaining an MBA degree) on the Company’s dime reflects on a Company culture that values professional improvement. Employees are also happy to participate in activities that benefit their careers, and thus are more likely to stay at a Company that values the same thing.

Have you noticed the evolution of human resources? What other functions have become regular parts of the modern HR department’s repertoire?

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