HR's Future Looks Strategic—or Does It?
A new survey notes that with advances in technology, human resources managers will have time away from administrative tasks to help their CEOs with big-picture questions, though one expert contends that things haven't changed much.
The human resources manager of the future is likely to take on a much more prominent role, acting more like a performance adviser for driving corporate profitability and shareholder value, according to a new survey of business leaders from the Institute for Corporate Productivity.
The Seattle-based institute, commonly known as i4cp, surveyed 384 business leaders from a variety of industries and interviewed more than 70 senior-level HR leaders for its report, The Future of HR: The Transition to Performance Advisor. Among those surveyed were chief human resources officers and other executives from Fortune 1000 companies, including Adobe Systems Inc.; Campbell Soup Co.; Experian; Flextronics International; General Electric Co.; and T-Mobile USA Inc., among others. The report is scheduled for release in late October.
Two-thirds of the companies surveyed said they expect to centralize administrative processes into shared services units within five years, thus freeing up the HR leader's job for more strategic and advisory work.
Sixty-four percent of respondents said employees will begin to take away some of the transactional work from HR, partly because of new technology that allows HR departments to streamline traditional tasks.
"The thing I've heard more and more of in the last five years is that HR is stepping up to the plate," says Jay Jamrog, a senior vice president at i4cp who conducted many of the interviews with HR leaders. "We heard a lot about business acumen, and that's not just reading balance sheets. I heard a lot about how HR people need to really think strategically for the long term. ... They have to help [the frontline managers] think more deeply about their own workforce, and ask questions like, 'Where's your business going in five years? What kind of talent do we have? Are we structured right?' "
Still, some prominent HR leaders say there's still little evidence of HR managers actually doing things that much differently.
University of Southern California professor Edward Lawler has tracked the amount of time HR managers spent on working as a strategic partner since 1995. He recently released the results of his latest research, from 2010, and found nothing has changed.
"When we ask them: 'What is their role in developing business strategy for their companies?' we're getting the same answers as we've always gotten," Lawler says.
Lawler says part of what is holding back HR from taking the strategic roles is the mound of administrative work that's still required.
"It's kind of hard to ignore the cry from someone complaining, 'I didn't get my paycheck' or from someone who felt their appraisal was unfair or unreasonable," Lawler said. "This all takes time away from the HR people. They don't always have time to be a strategic partner."
In other cases, Lawler says, HR managers may also lack the skill sets needed to engage in strategic discussions because their experience is limited exclusively to HR.
Jamrog, who's handled dozens of research projects for i4cp, says the push for HR to take on more responsibility is nothing new, but the urgency and activity around it appears much stronger.
"The difference today is this is not talk anymore," Jamrog says. "Over the last five years, something has happened during this recession ... to move HR from just talking about things like this to actually doing them."
Jamrog also argues that with advances in software technology, more HR managers have time away from administrative tasks to help their CEOs with big-picture questions, such as how staffing can help achieve corporate goals and drive profitability. In some cases, HR leaders are also handing more administrative responsibilities to line managers.
"The future of HR is all about making the organization better," Jamrog says. "If you're going to go anywhere in HR and make an impact in HR, it's about how you helped the company make more money."
Karla Gehlen, executive vice president of HR for Sterling Savings Bank in Spokane, Washington, who was featured in the i4cp report, agrees that HR's role is clearly becoming more strategic.
"Much of it is about workforce planning—understanding what the budget is and what the production goals are, and then planning staffing around that," Gehlen says. "I see that as a truly critical component for the future of HR."
Meg McSherry Breslin is a writer based in the Chicago area. Comment below or email email@example.com.