Of all the developments and trends in human resources, what would be at the top of your list?
Would strategic HR be there? How about outsourcing; or should that be in-sourcing? Does employer branding and the “war for talent” belong there? And where would technology fit in, especially the trend away from so-called best in class components and toward integrated systems?
Not an easy call is it? Just since the start of the recession in late 2007 HR departments, and the profession itself, has seen a remarkable shift in both function and practice.
Strategic HR, a concept that began to percolate about the same time companies changed the personnel division to the HR department, got jumped into the C-suite consciousness shortly after the layoffs began. It was helped along by the angst created earlier by Keith Hammond’s wake-up call to the profession in Fast Company titled Why We Hate HR.
Yes, 4,000 HR VPs with an MBA
Call it a trend, call it a coincidence, but today, on LinkedIn, there are 4,000 HR vice presidents with MBAs. Coming up in the ranks are twice that many MBA-holding HR directors. This is telling, suggesting Hammond’s observation that, “Most human-resources managers aren’t particularly interested in, or equipped for, doing business” had an effect.
Merely having a business degree doesn’t necessarily make the holder a candidate for CEO, but it does prepare him or her to take a seat at the grown-ups table. And the evidence is there to officially say HR is getting that seat; LinkedIn lists 761 MBA-holding, HR vice presidents at Fortune 1000 companies.
Other trends? Certainly the growth of contract labor has to be on the list. Today, contingent labor comprises, on average, 16 percent of the workforce of companies with 1,000 or more workers. Seven years ago, it was 11 percent. That percentage is only going to continue to grow, with Fortune 100 companies leading the way.
More significantly, we’re not talking here about companies simply bringing in more seasonal help, the way retailers do at holiday time. This is a shift in the strategic mix of the corporate workforce, much as tech companies have done for years. Enabled by the availability through layoff or buyout or forced retirement of skilled professionals, companies have discovered they can tap this pool for specific projects without adding to corporate headcount.
The rise of professional “supertemps”
The Harvard Business Review called this growing corps of professionals “supertemps.” Many of them, having discovered the freedom of moving from challenge to challenge, have little interest in becoming permanent staff. Write the authors: “as growing numbers of professionals decide that they prefer to work on a temporary basis, organizations are finding ways to work with them.”
Besides these, readers of the Human Resources IQ blog, weighed in on other developments that figure as trends: metrics and analytics; technology; outsourcing; compensation and benefits; compliance; training, and; the mobile workforce. Several of these, and specifically the welcome focus on analytics, are part of HR’s growing strategic emphasis. As every MBA knows, “if it’s not measured, it isn’t managed,” and you don’t know if it’s effective or not.
So, with the help of technology, today’s HR MBAs are linking performance to the bottom line, and back to talent acquisition and the management of the entire workforce. The HRIQ audience talks about the technology trend as automating HR’s rote processes. That’s certainly important, but it’s evolutionary, not revolutionary. What puts technology on the list is the integration of discrete HR systems — the ATS, payroll, time management, performance, and the like — into a single system that offers a “big picture” view.
An industry standard for valuing human capital
It’s not yet a complete integration; ERP software steps toward it, but few of those implementations were designed with HR as partner. HR systems got added on. As the C-suite grows in its appreciation of the economic value of its talent, ever more of these holistic integrations will occur, making the impact of the workforce on the bottom line clearer and more measurable.
The Society for Human Resource Management is working on an industry standard to provide companies a uniform, internationally accepted method of valuing a company’s human capital. The work of a group of dozens of professionals from academia, finance, HR and elsewhere, the standard will eventually be presented to the Amercian National Standards Institute.
Among the elements to be valued, according to the proposed standard, are: human capital spending; retention; engagement; and something the standard calls “Human Capital discussion & analysis.”
The “Era of Big Data?”
The objective of this latter element is “to provide management with an opportunity to connect the dots and to provide investors with an enterprise-wide perspective of the meaning and importance of the various human capital metrics.” Connecting those dots will demand a sharper focus on the economic contribution — and not just the cost — of the workforce. Inevitably, that will mean more emphasis on enterprise-wide linkage of HR’s information, with the rest of the operation.
In other words, as Haig R. Nalbantian, senior partner at Mercer, told the HRIQ audience:
Developing one’s own data to ascertain the impact of policies and practices is becoming more the norm. This is a major change and is aligned with developments in other fields like Finance, Marketing, Logistics, etc. that are pushing the boundaries and tapping the benefits of what the Economist has called the ‘Era of Big Data’.”
Where HRIQ identified eight (8) HR trends – and there are at least that many — on a macro scale, technology and structural changes in the American labor force, are the trends propelling human resources from a tactical, functionary part of an organization, into a strategic partner on an equal footing with every other division represented at the big table.