Has HR really changed?

by 25 Jun 2007

In August 2005, Fast Company Magazine published an article that launched a firestorm among HR professionals worldwide. It was called: Why We Hate HR. In it, Keith Hammonds decried the mentality of HR as a gatekeeper, a management stooge, a career graveyard for people who can’t make it in other parts of the business and a profession that is constantly droning on about “gaining a seat at the table” but never getting any closer to that goal. Naturally, the article evoked strong reactions.

Some in HR agreed with the criticism and welcomed it as a call to action. Many refuted the claims and insisted that what ails HR is not the fault of its practitioners, but of executives and CEOs who perpetually hold the profession back.

A lot has happened in business since 2005, particularly in the ‘global’sense. But has HR evolved with it? The language has changed. ‘Talent management’ has gone from consultant-speak to mainstream but more importantly, the attitudes of business leaders have shifted dramatically. Today, there is widespread agreement among leaders in both the private and public sectors that talent is the key differentiator in knowledge economies and industries. Increasingly, CEOs are looking for talent advantages and trying to get their arms around devising workforce strategies to sustain growth, to innovate and to compete. In short, if CEOs ever were blocking the way for HR, they aren’t anymore.

So has the profession taken advantage of this tremendous opportunity? As the question of talent, skills, successors, performance and leadership consume more board and C-suite mindshare; how will the HR profession evolve? There are really just two possibilities – up or out. ‘Up’ means C-level HR executives reporting to the CEO. ‘Out’ means more extensive HR outsourcing and responsibility for ‘talent’ moving to other executives.

To succeed as senior executives, it isn’t only the high profile challenges (the aging workforce, for example) that HR leaders need to get in front of. The workforce is being transformed through rapid changes in its makeup–more women, more minorities, more generations in the workforce and more disparate types of workers – from contingent to virtual. These trends are accelerating faster than most organisations can respond.

Too few HR leaders truly understand the implications of continued and faster paced globalisation. The threats and opportunities it poses to economies, industries and businesses are barely on the agenda of most HR conferences. For stewards of talent, globalisation requires a deeper understanding of international economics, laws and culture as well as a range of new expertise in issues such as outsourcing and offshoring.

The art of human resources is quickly evolving into the art and science of human capital management.

HR executives with their eye on a bigger role in the business agree that the reputation of HR is so poor today that the profession must be re-branded.

Beyond the name, hardcore change and re-skilling is needed. The modern talent management executive must be able to speak in financial terms about the workforce.

They must understand the organisation’s current complement of skills and competencies as well as external local, national and international workforce demographics. They must be able to tell the C-suite and the board whether it makes sense to buy, develop or borrow talent and this advice must be presented in financial terms. They must be able to forecast workforce needs aligned with corporate goals, capabilities and objectives. The modern talent management executive will be multidisciplinary: an economist, demographer, strategist, salesperson, speaker, leader, coach, consultant, and among the company’s most knowledgeable executives on globalisation, outsourcing and offshoring, sustainability, corporate social responsibility, talent-related technologies, finance, corporate governance and measurement.

This is a tall order but an exciting one at the same time.

An executive that can demonstrate these competencies will almost certainly take a well-earned position beside the CEO and will be at least on par with any other senior executive. But advancement is not the point. Increasingly, winning organisations will require world-class talent management executives. The best from other parts of the business need to be drawn into these ranks as this transformation has already begun.

By Allan Schweyer, president of the Human Capital Institute