To Usher in the Age of HR, We Need to Start By Tearing It Apart

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Jul 2, 2015
This article is part of a series called Editor's Pick.

By Ron Mester

Editor’s Note: This is the last of 12 essays from the new book, The Rise of HR; Wisdom From 73 Thoughts Leaders. It’s compiled by Dave Ulrich, Bill Schiemann and Libby Sartain, and sponsored by the HR Certification Institute.

We are at the dawn of the Age of Talent. But will this also be the Age of HR?

I believe the answer can and should be yes. Organizations, workers, and even the broader economy will be better off if the answer is yes. But, it’s an open question.

The power to make the answer “yes” lies with HR leaders — but exercising that power will be very difficult and likely very painful as well. It will require challenging and uprooting some of the longest-held assumptions about the human resource function, including assumptions about the focus on employees, the definition of “HR expertise,” HR’s status as a “support function,” and the very competencies it takes to be an effective human resource professional.

In short, making this the Age of HR requires that HR leaders do nothing less than rearrange the HR function’s DNA — and quickly. It’s the ultimate version of HR transformation, well beyond reengineering HR processes or creating centers of excellence.

If this seems a little overdramatic, consider this: Our business environment is radically changing. The way people work is radically changing. And, as many others have pointed out (and something I won’t belabor), we’re in the Age of Talent, where people’s impact on organizations is at unprecedented levels.

These radical changes are fundamentally altering the relationships between work activities, people, and organizations. Given this, it’s nearly impossible to imagine that HR can be effective, much less bring about the Age of HR, under the same basic assumptions and DNA largely formed more than 50 years ago.

The radically changing business environment

The context in which all of us do business is undergoing massive change. We all know this. But I’d like to highlight a few examples (not an exhaustive list) that have big implications for the relationship between work activities, people, and organizations.

  • From stability to volatility —We used to talk about five- and 10-year business plans, but rarely do anymore. That’s because almost every element of the business world has shifted from largely stable to consistently volatile. New competitors rise and fall in months, sometimes weeks. New products are released and promoted or killed in quick bursts. Customer spending and needs are harder than ever to forecast. All of this means that predicting the work that will need to be done next quarter (much less next year), and the type of talent needed to do it, is impossible — or at least increasingly complex. It’s not surprising that we’re seeing a shift from organizing work around “jobs” to “projects.”
  • From confidentiality to transparency — It’s becoming easier to learn just about anything about organizations and individuals, even (or perhaps especially!) about information that used to be considered “private” or “confidential.” Not only is technology creating and forcing transparency, but being transparent is increasingly viewed as a desirable characteristic. This means companies can learn almost anything they want about workers, and vice versa. And workers can also learn much about their fellow workers. As formerly private and confidential information becomes readily available, this new knowledge will change relationships between people and organizations, and workers and their colleagues.
  • From standardization to mass customization — Just as the Industrial Revolution brought us standardization to drive down costs and make more products accessible to more people, our current technology revolution is bringing us mass customization. More now than even five or 10 years ago, consumers expect websites, products, and services to be tailored to their specific and individual wants and needs. It’s also reasonable to assume that we’ll see this expectation carry over to the world of work, meaning that people will increasingly expect their work to be tailored to their personal wants and needs. These new expectations could impact every aspect of work — hours, schedule, job location, pay, benefits, reporting relationships, professional development, tenure, title, work assignments, etc.

The radical changes in how people work

Of course, our work environments are also changing radically. Again, I’d like to share few examples that are fundamentally altering the relationship between work activities, people, and organizations. You can undoubtedly think of many more.

  • From dependent employees to independent talent — Until very recently, employees were largely dependent on companies to do their work. Organizations provided not only the jobs but also the space, tools, knowledge, and colleagues to do the job — not to mention the compensation. But today, more people than ever can do their work without much (if any) help from a company. They can contract themselves out, in whole or in part. They can work from home or from the local Starbucks. For little or no money, they can access the tools and information they need to do their work. They can easily build their own network of colleagues and mentors. In short, more than ever, workers are independent. And with that independence comes an increasing ability — even desire — for people to view employment or work, for any given company, as a “gig” more than a career.
  • From clustered workers to distributed workersThe Industrial Revolution brought us not only standardization but also clustering. For more than 100 years we’ve been clustering people in factories and offices, often making people move or commute great distances so they can work next to their colleagues. But for many different reasons, we are rapidly moving to a more distributed model of work. As companies have become more globally integrated, teams within companies have become more globally integrated, and companies have had to let go of the requirement that teams must be clustered.

As companies look to reduce costs to stay competitive, they’ve looked for ways to reduce office requirements and have become more willing to let employees work from home. As hard-to-retain workers seek ways to balance their work and personal lives, they’re increasingly demanding the ability to work virtually, and more companies are listening.

Technology makes distributed workers much more possible. And yet, a distributed work environment changes the relationship between work activities, people, and organizations. Even basic tasks like managing and communicating must be done in very different ways.

  • From work/life balance to work/life integration — The idea of balancing one’s work life and personal life starts with an assumption that time spent on one is largely independent from the other. Increasingly, this isn’t true or even necessary. People willingly work in the evenings, weekends, and even while on “vacation.” And people need or want time during the day to take care of personal errands or to enjoy watching their child play soccer. More people are wanting — and more companies are enabling—the integration of work and personal lives. This makes it more difficult for companies to “track” work activity, and puts more responsibility on individuals to effectively address all of their commitments.

Ushering in the Age of HR

People who talk and write about the “Age of Talent” don’t always agree on what that means, but in broad terms they agree that, more than ever, workers make or break organizational success. Talent has become (or is fast becoming) the most important source of competitive differentiation, at least for many organizations.

It stands to reason, therefore, that HR should be the most strategic, most centric, and most impactful function in a company. Forget the whole discussion about HR getting a seat at the table. Maybe the advent of the Age of Talent means it should be HR’s table. In short, for the Age of Talent to reach its full potential, it must accompanied by the Age of HR.

But given the radical changes afoot in our business environment and the way people work, and the monumental implications for the relationships between work activities, people, and organizations, ushering in the Age of HR requires HR leaders to reexamine every assumption about HR’s role, how it does its work, and how it creates value.

This goes far beyond putting HR technology in the cloud, or leveraging big data to drive HR decisions, or changing employee-related policies to account for the rise of social media, or any of a number of other worthy changes to consider. Instead, it’s time for HR leaders to look at HR’s DNA itself—the function’s fundamental building blocks — and rearrange it to address the emerging new realities of our business environment and the way we work.

Here are three examples of long-held assumptions about HR that deserve reexamination. I hope this provokes you into identifying and challenging other core HR assumptions, because that’s how we’ll truly usher in the Age of HR.

1. The focus on employees

At its core, HR has always been (and still is) about employees — finding them, compensating them, training them, motivating them. Virtually every HR program is designed around employees. But we’re not talking about the Age of Employees — it’s the Age of Talent. And talent comes to organizations in many forms — temporaries, independent contractors, outsourced services, professional services, volunteers, partners, and more.

In fact, largely as a result of the changes in the business environment and how people work, organizations are relying on non-employee talent more than ever before, and that’s likely to keep increasing. What happens if we discard the assumption that HR is about employees, and that instead, HR is about talent of every type and source?

If two programmers are sitting next to each other, and one is an employee and the other is a contractor, do we only want the employee programmer to be engaged and well trained? How would we rethink every aspect of HR and HR programs if the focus was on talent rather than employees?

2. HR expertise

HR departments are organized in many different ways. But underlying the structure of just about every HR function is the assumption that HR expertise is developed through its disciplines — recruiting, compensation, benefits, training, labor relations, and so on.

But this method of classifying expertise is fundamentally “industrial” — internally driven to promote assembly-line-like efficiency. Imagine if, instead, HR expertise were developed around generations (Baby Boomers, Gen X), or talent sources (temps, independent contractors, services), or skill sets (engineers, marketers), or internal stakeholders (finance department, operations).

Could a change in the way HR thinks about “expertise” better position HR to address the changing business environment and the way people work?

3. Support function

We simply assume that, along with functions like finance and IT, HR provides support to an organization’s “line” operations. By and large we define line operations as the part of the company that directly hires and manages people.

But what happens when we increasingly organize work around projects rather than jobs? A project manager manages people during the weeks/months of the project, but who has overall responsibility for ensuring that the company has the right number/type of workers on hand to support all the projects, and that those people are being managed and developed properly?

In a project-driven world, are workers a shared resource? In that case, is it possible that HR should manage that shared resource, thereby becoming, in essence, a “line” operation?

Challenge, pain, and reward

Challenging assumptions is hard. Sometimes those assumptions are so deeply ingrained that we don’t even realize they are assumptions anymore. Instead, we mistake them for “laws of the universe” that can’t be tampered with. Moreover, altering those assumptions and changing DNA is not only hard but painful.

People in HR will rebel. Employees may rebel. HR’s internal customers will likely rebel. Many current HR professionals may not have the right skills to be effective in the Age of HR.

But isn’t this exactly the work that leaders are meant to do? And specifically, that HR leaders are meant to do? The reward for doing this work well is ensuring that talent rules and that the organizations we serve are very successful.

As HR leaders, we can’t ask for much more than that.

Compiled by Dave Ulrich, Bill Schiemann and Libby Sartain, and sponsored by the HR Certification Institute, The Rise of HR: Wisdom from 73 Thought Leaders is an anthology of essays addressing the critical issues facing business and talent professionals today. The full eBook can be downloaded @ Reprinted with permission of HRCI.

This article is part of a series called Editor's Pick.
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