The Changing Face of Human Resource Management

Andrea Watkins
October 25, 2010 — 2,834 views  
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The rapid and ground-breaking developments in technology and globalization and the development of a knowledge-based economy over the past few decades have necessitated tremendous, concomitant changes in the human resources (HR) space.

The role of HR management has changed significantly in the modern business context. What was better known as Industrial Relations/Personnel a few decades ago began to be called HR, and is today becoming better known as Human Capital Management (HCM). This, however, is not merely a change in euphemism for the department that manages employee-related issues-it is representative of a significant metamorphosis, or evolution, of the HR function into an entity that is increasingly being considered a strategic part of organizational development and success. The previous HR focus on process and administration of the organization has now shifted to employee engagement and obtaining the most effective performance from employees. Thus, enhancing human capital is the future face of HCM.

The most significant factor that has contributed to this change is the transformation of the nature of work itself. Over the span of just a few generations, society has moved from being largely agrarian to industrial to knowledge-based. Thus, from a requirement for manual skills, we have moved to the need for knowledge (the sum total of a person's experience, education and expertise).

Let us define the HR executives of the future-they need to be proactive handlers of the global talent pool, knowledge experts on talent sources, coaches to the organization on linking business outcomes to human capabilities, managers of organizational partnerships (outsourcers), facilitators of organizational transparency to all stakeholders and teachers to incoming talent (which means that they are likely to themselves be highly educated individuals). In this process of evolution, as HR executives increasingly become facilitators and strategists, what are the skill sets and competencies they need to take to the next level?

The growing need for HR to be more versatile and qualified than their counterparts of a few decades ago is reflected in an increase in the number of HR-related degrees being offered by universities-full-time, part-time, distance education and online courses in subjects such as MBA with concentration in Human Resources Management or in Organizational Behavior, M.S. in Industrial and Organizational Psychology, and M.S. in Human Resources Development/Management. Currently, 318 U.S. universities/colleges offer programs in various aspects of HR education, of which 67 offer a doctoral program. The number of bachelor's degrees awarded in human resource management in the U.S. increased by 88% between 1987-88 and 2003-04 (total number of degrees increased by 41%), while the master's degrees increased by 276% (total number of degrees increased by 87%), and doctorates by 125% (total number of degrees increased by 39%). This means that the need for higher levels of education is clearly recognized.

At the same time, mere knowledge about HR processes and functions, although essential, is not enough. The application of this knowledge to increase productivity and tie employees' capabilities to the performance of the organization is also not enough. What the HR executive now needs encompasses these competencies and moves beyond them to the crucial components for success-a comprehensive understanding of the business processes of the organization (including the financial aspects), a grasp of emerging technologies that they can use to their advantage, a thorough knowledge of the stakeholders' and investors' needs, the ability to identify market trends that might affect the organization, the skills to make accurate predictions about future HR requirements (including the ability to assess the best fit for a job) and the ability to weed out or re-channel the competencies of poor performers. Added to all these factors now is the critical need to develop a global outlook as many organizations now span many countries and time zones, in addition to having an increasingly diverse workforce. Understanding what makes the latter tick and how to handle them is a crucial factor in the endeavor to extract the best possible performance from them.

The other challenge for HR practitioners is the perception that they need to pay more attention to metrics-and these must be the right kind, not those tracked merely for the sake of measurement. Key metrics that have been suggested, in addition to those that traditionally measure performance and efficiency, are those based on employees' assessments of how well an organization is doing in meeting their requirements, based on the premise that they will provide a foundation for measuring and managing an organization's human capital advantage. The next step is analyzing these metrics with a view to improvement where there is a perceived shortfall, and then actually implementing the improvements.

In his book "Winning," Jack Welch made the controversial statement that Human Resources in an organization needs to be elevated to a position of substantial power, possibly equal in importance to the CFO. This might sound heretical, but could quite possibly be the way of the future. After all, 60 - 70% of organizational spending comprises people-related costs, and sheer economics should dictate that HR be an important force in the organization. Furthermore, research has proved beyond doubt that HR really does make a difference to business outcomes. As HR evolves into a more strategic role, it will be able to have a greater say in where the organization is going.

In the long run, successful strategy implementation requires total alignment of the technical system, the social system, and the business process system-and HR is the function that can optimize this. Aligning employees and their knowledge and expertise in tandem with the tools and systems they use with the organization's vision, goals and business strategy is the new role HR needs to play. For this, they need to attain the fine balance between the competencies mentioned above and their own instincts, honed by experience and gut feel. Although this is far from simple, it can be done, with phenomenal results for your : talent management strategy.

The business world is changing and adapting even as we read this-can HR keep up? With new strategies for performance management and new technologies in HR software the answer has to be yes.

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Andrea Watkins