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SHRM at a Crossroads

February 1, 2008
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Related Topics: The HR Profession, Workforce Planning, Featured Article
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With Las Vegas as the setting for its annual conference and life-size stand-up cards in place to showcase individual members and a refashioned logo, the Society for Human Resource Management announced in June 2007 that it was rebranding itself—an effort designed, in part, to emphasize the strategic nature of human resources.

    Indeed, SHRM president and CEO Susan Meisinger said that SHRM was rebranding the HR profession as a whole. "We want people to know that our new look is a reflection of our profession’s increasing influence and responsibility," she said.

    Now, six months into its rebranding effort, and as SHRM is about to undertake a lengthy and comprehensive strategic review, Meisinger, 55, has announced that she intends to retire from the organization in June. After 20 years in various positions at SHRM, she is going to devote time to a couple close family members who are ill.

    "I need to be present," she said in an interview in Washington a few days after her January 8 retirement announcement to SHRM staffers. "In the big scheme of things [over the next] 20 years, my family will be my priority, not SHRM."

    As SHRM’s board sets about naming her successor, there are pivotal questions ahead for the organization, which has grown by 63,000 members since 2002, when Meisinger stepped up to lead it.

    Such growth is impressive, but it also makes it more challenging for SHRM to serve all its constituencies—from newbie HR clerk to chief human resource officer. During its strategic review, SHRM also will consider how to respond to opportunities in its market.

    "The amount of time spent around the boardrooms and in the C-suite discussing talent is causing HR to have to raise its game," Meisinger says. Within that atmosphere, "how do we leverage our strength for maximum impact? That’s where the focus of the conversation needs to be."

    In interviews with SHRM leaders, society members and observers of the HR profession, what has emerged is this picture of the organization:

uWith 233,000 members worldwide, SHRM is huge and growing, in part by reaching out to people who are not traditionally seen as being part of the HR profession.

uWith 2006 revenue of $95 million and $179 million in assets, SHRM is rich. The society has $122 million of its assets in long-term investments, which is tens of millions of dollars more on hand than many other nonprofits its size.

uWith its broad organizational reach, SHRM is an effective Washington lobbying organization, making its opinion heard on public policy matters ranging from immigration to the Family and Medical Leave Act—issues that not only affect HR practitioners, but can influence the financial future of companies nationwide.

uFinally, there is a good deal of debate over SHRM’s very broad member-service mission. Some HR professionals question whether it really can be a valuable resource for executives and senior HR officials—the real focal point of strategic HR practice—when it also caters to thousands of entry-level and midlevel practitioners.

    (Workforce Management competes directly with SHRM’s publication, HR Magazine, and its Web site, SHRM.org, both editorially and for advertising revenue.)

Growth strategy
    SHRM points to its 233,000 members as evidence that it is accomplishing its mission of advancing the profession and serving the professional.

    "The membership growth has been largely because of the value proposition we offer," Meisinger says. "People know when they come to us, we’re giving them quality information. They’re comfortable in the advocacy positions we’re taking."

    Another reason SHRM is so big is that it does not reject anyone who signs up and pays the $160 annual fee. It adds about 50,000 people to its rolls each year and retains about 81 percent of its membership annually.

    Its roster is not limited to HR professionals. It encompasses anyone whose work includes some kind of HR dimension as well as those who simply have an interest in HR.

    Casting a wide net enables SHRM to capture people who work in finance or legal departments. Their titles may not say HR, but they do have HR responsibilities. Their belonging to SHRM helps the organization elevate the field.

    "The strategy is not growth for growth’s sake," Meisinger says. But limiting membership would involve changing SHRM’s bylaws.


"We do operate like a business, and i make no apologies for that . It's something we take pride in because we don't want to get dinged for not knowing how to run a business."
 —Susan Meisinger,
SHRM president and CEO


    "If you create a criteria, how do you balance education and experience? What value do you get for that? These are questions I think the next president has to look at," Mei­singer says.

    SHRM officials stress that the organization’s size does not undermine its quality.

    "While we’re getting bigger and our membership is growing, we also appear to be doing a lot of things better year-to-year," says Steven Miranda, the organization’s chief human resource, strategic planning and diversity officer.

    The breadth of SHRM’s activities contributes to the size of its budget. In 2006, it had revenue of $95.5 million and expenses, including income tax expense, of $89.1 million. It had $179.6 million in total assets—$122.4 million of which was in long-term investments. The amount of money in that category grew from $65.6 million in 2003 and gives SHRM sizable liquidity.

    SHRM has substantially more money in long-term investments than many other nonprofits with roughly the same revenue in its IRS category: 501(c)(6), also known as business leagues.

    For instance, the American Institute of Architects had $26.8 million in investments at the end of 2005. The American Bankers Association had $58.8 million. The American Academy of Family Physicians had $54.9 million. The American Dental Association had $64 million.

    SHRM does not dip into its flush coffers to boost its executives to the top pay ranks. Meisinger earned $490,000 in 2005, and received $815,140 in pension and benefit plan contributions. In total compensation, that’s comparable to Edward Yingling, president and CEO of the bankers group, who in 2004 made $834,208 in salary and $523,069 in pension and benefit plan contributions.

    Meisinger says that SHRM stays within parameters set by the audit committee of its board when increasing its reserves, which she pegs at $160 million for 2007. Moody’s Investors Service defines SHRM’s reserves as being in the middle of the range for nonprofits its size.

    It’s not unusual for a membership organization like SHRM to have a large amount of money on hand, according to experts. It’s not equivalent to a charity building up substantial reserves.

    "They aren’t under the expectation that they’re going to be spending it all on their mission," says Suzanne Coffman, a spokeswoman for GuideStar, an organization that tracks finances of nonprofits.

    Coffman says that it all boils down to one simple question: "How do they explain it to their membership?"


"The amount of time spent around the boardrooms and in the c-suite discussing talent is causing HR to have to raise its game."
—Susan Meisinger

    SHRM officials say that part of the reason they maintain a large reserve is to ensure that the organization can continue to operate in a severe economic downturn.

    Beyond preparing for whatever tomorrow may bring, SHRM also uses its financial wherewithal to invest in new programs. Over the past year, in addition to the rebranding campaign, it has launched an educational initiative to work with universities to develop HR curricula for graduate and undergraduate study. It also undertook a study of diversity and has launched a national communications campaign—starting with ads on TV, radio and in the print media to promote the HR profession.

    Meisinger says the initiatives are not funded out of the operating budget. "It’s what the reserves are for," she says.

    That approach demonstrates an HR organization with financial acumen. "We do operate like a business, and I make no apologies for that," Meisinger says. "It’s something we take pride in because we don’t want to get dinged for not knowing how to run a business."

    SHRM declined to reveal the size of its spending for rebranding or the new programs. One of its biggest budget items is its huge annual meeting. SHRM spent $6.5 million on the conference in 2006. It generated $16.9 million in revenue.

A force on Capitol Hill
    SHRM invests substantial time, money and staff in influencing public policy. It spent $766,418 on lobbying in 2006. On occasion, the organization consults with other lobbying firms, but only SHRM represents itself in talks with members of Congress and the administration.

    Although opinions are mixed about other dimensions of SHRM, the general consensus is that it can be a force on Capitol Hill, where it made nearly 300 visits in 2007.

    The reason for its effectiveness is its size. The organization is given credit for its ability to gin up the grass roots, either in support of or in opposition to legislation.

    Leading a coalition of business groups, SHRM successfully removed from several appropriations bills a provision that would mandate that 200,000 federal contractors use the government’s electronic system to verify workers, a mechanism SHRM says is deeply flawed.

    Another way SHRM is visible in Congress is through sending members to testify before House and Senate committees. Last fall, Christine Vion-Gillespie, employee relations and compliance manager at SAS Institute Inc. in Cary, North Carolina, was a witness at a House Education and Labor subcommittee hearing on extending the amount of family and medical leave provided to members of the military.

    "I don’t know that I’d do this on my own if I didn’t have the backing of SHRM," Vion-Gillespie says.

    In her appearance, she urged that before Congress expands the Family and Medical Leave Act, it first fix the problems that the law is posing for employers, who have been struggling with intermittent leave.

    As is often the case, the recommendation of the SHRM witness was similar to the stance taken by Republicans. But Vion-Gillespie’s argument drew criticism from the subcommittee’s chairwoman, Rep. Lynn Woolsey, D-California.


"While we're getting bigger and our membership is growing, we also appear to be doing a lot of things better year-to-year."
—Steven Miranda, chief human resource, strategic planning and
diversity officer, SHRM


    Woolsey maintained that the country has an obligation to do something now for military families. It’s not the first time that Woolsey, a former HR practitioner, has been frustrated with a SHRM representative’s testimony.

    "They make a good case in representing the employer, but I think that HR is about the employee as well," Woolsey says. "HR should be the advocate for the employee and help management and the employee come out on the winning end."

    The Democratic majorities that have taken over the House and Senate have not made life harder for SHRM, says William Maroni, SHRM chief external affairs officer.

    "We’ve got good working relationships with members of both parties," he says.

    In fact, the door is open so often that SHRM doesn’t feel compelled to set up a political action committee so that it can make donations to politicians.


SHRM is "more tactical, more administrative," while HRPS is "a little more futuristic. ... They're excellent in promoting the field. Both are needed."
—Mary Jane Reed, president, HR Leadership Forum in Northern Virginia


    Unlike the U.S. Chamber of Commerce or the National Association of Manufacturers, SHRM represents people rather than companies, Maroni says. "We pride ourselves on being an organization of professional members," he says. "That’s why we are sought out as a resource."

    Although SHRM’s work on Capitol Hill can give it a high profile, the way it reaches most of its constituency is at the local level.

    For instance, the Washington chapter holds an annual conference on regional compensation and benefit levels.

    It is designed to help members be more credible and strategic in their approach to pay. Like many other events at its 560 affiliate chapters, it’s also a development opportunity.

    "We’ve been trying to find ways for our members to do more networking with each other," says Lori Golino, senior vice president for human resources at Social & Scientific Systems in Silver Spring, Maryland, and president of the SHRM chapter in Washington. "At the chapter level, it’s more about making those connections at events."

Mission accomplished?
    As SHRM grows, it must appeal to an audience that ranges from the entry level to the C-suite. Some critics, who declined to be quoted on the record, accuse SHRM of being bottom-heavy and thin in participation from senior levels in corporations.

    SHRM says 40 percent of its members are at the director level or above in their companies. The distribution of people from the top, middle and bottom of the ladder within the organization is roughly equivalent to that in the profession overall. But engaging all the different levels can be a different matter.


"I don't think
[SHRM has] yet been able to fully make the case of HR as a business partner for people outside the profession."
—Susan Strayer, director of talent management, Ritz-Carlton Hotel Co.


    "It is a continuing challenge in a sense to get everyone involved with such a wide diversity," says Bob Mathis, professor emeritus of management at the University of Nebraska at Omaha.

    In local SHRM chapters, many members are from small and medium-size companies and from non-HR departments, says Mathis, author of an HR textbook used at hundreds of colleges.

    "A challenge in the chapters is to have senior HR managers in larger organizations more involved," Mathis says.

    Regardless of the composition of individual locals, SHRM argues that it is a resource for each member from the moment they enter the field until they get to the top. For instance, SHRM proudly points to Libby Sartain, chief people officer at Yahoo, as someone who joined the organization as a student member and remains affiliated.

    "Our desire is to be their career partner wherever an individual may be in their career," says Keith Greene, SHRM vice president of workforce readiness.

    Thousands of SHRM members are just beginning their careers.

    "The biggest impact SHRM has is on the new or emerging HR professional," says Susan Strayer, director of talent management at Ritz-Carlton Hotel Co. "It’s done a really great job of professionalizing the profession. I don’t think it’s yet been able to fully make the case of HR as a business partner for people outside the profession."

    The need to speak to such a broad range of membership dilutes the offerings that SHRM provides for top corporate leadership, according to some observers.

    Mary Jane Reed, president of the HR Leadership Forum in Northern Virginia, says that she turns to SHRM for the latest in employment law and other timely information needed for daily HR practice.


SHRM has been "proactive in arguing that we should have a seat at the
table and preparing the HR professional to take that seat."
—Dan Weber, senior compensation analyst, Informatics


    When she wants to delve into areas like leadership development, talent management and succession planning, she depends on the Human Resource Planning Society, an organization of which her group is an affiliate.

    She describes SHRM as being "more tactical, more administrative," while the HR Planning Society is "a little more futuristic."

    She was careful to be evenhanded. "I don’t want to put [SHRM] in a box," says Reed, former vice president for HR at Bell Atlantic. "They’re excellent in promoting the field. Both [SHRM and HRPS] are needed."

    Like SHRM, the HR Planning Society, which has about 3,000 members, does not have membership criteria. It is encouraging "enterprise membership," which involves signing up a CEO and his or her "direct reports," says Lisa Boyd, a spokeswoman for the organization.

    The difference between Alexandria, Virginia-based SHRM and other organizations that provide guidance and information on HR issues is highlighted within one company.

    Linda Pfeiffer does corporate education and learning development for Informatica, a data integration software company in Redwood City, California. She turns to a number of different resources for the corporate education and organizational development work she performs.

    "I equate training with the American Society for Training & Development, coaching with the International Coach Federation [and] instructional technology and human performance technology with the International Society for Performance Improvement," she says. "I equate SHRM more in the area of general HR education, targeting the ‘HR business partner’ audience."

    That makes sense, says her colleague Dan Weber, a senior compensation analyst at Informatica. "Most HR people are generalists," he says.

    Weber, who teaches SHRM certification courses and participated in establishing a special certification for California HR professionals, credits the organization with improving the field.

    "They have been proactive in arguing that we should have a seat at the table and preparing the HR professional to take that seat," Weber says.

    One of the primary ways SHRM has played that role is by substantially increasing the strategic management and general business knowledge components of certification exams. "It gives the generalists what they need to know and how to apply it," Weber says.

    If a specialist needs more detailed knowledge about compensation, for instance, he or she might turn to World­atWork, which specializes in pay issues and opened a Washington office in September.

    Or, if the area is benefits, the best organizations may be the American Benefits Council and the ERISA Industry Committee (ERIC). Both groups are based in Washington, and their memberships consist mostly of large companies.

    Martha Priddy Patterson, a director of the human capital group at Deloitte Consulting in Washington, is a former SHRM member. She praises the benefits organizations for their insight and clout on Capitol Hill and with federal agencies. "Every place that I’ve gone, I’ve insisted that they be members of ERIC and ABC," she says.

    Although some specialists say that SHRM doesn’t offer the deep dive into specific areas that they seek, Mathis credits the organization as "being a leader in changing the perception of HR from being administrative to professional."

    Another prominent HR scholar says SHRM is comprehensive and effective in meeting many different needs.

    "Simply stated, SHRM is the voice of the profession," says Dave Ulrich, a professor in the Ross School of Business at the University of Michigan. "It services all types of organizations—large and small, public and private—and all types of HR professionals: junior and senior, generalists and specialists. Their research is timely, their education programs are forward-looking, and their publications are helpful."

Rebranding

    SHRM’s rebranding campaign seeks to make all those resources more user-friendly for its membership. Brand subcategories include SHRM Education, SHRM Research, SHRM Community and SHRM Advocacy.

    The organization also has embraced SHRM as a name—something it strenuously avoided in the past. (The organization’s "Working with the Media" guide instructed SHRM members: "don’t say ‘Sherm’ or some other nickname for the Society. Say S-H-R-M ..."). It has redesigned its logo to emphasize the HR in the middle, and it will launch a redesigned Web site early this year.

    But the thrust of the campaign is to help organize and target what SHRM acknowledges is a large amount of material.

    Part of the branding strategy was to do more segmenting of the market," Meisinger says. "We’ll provide more information to people based on where they are in their career rather than provide everything to everybody."

    There was no pivotal event that prompted SHRM to do the rebranding, which had been under way for months before the Las Vegas announcement. "It was part of [our] continual improvement commitment," Maroni says.

    The feedback has been positive, according to SHRM’s Miranda. Members are saying, "You guys are now helping me manage my inbox more effectively because you’re being more specific in what you send me," he says.

    But some members say SHRM’s results are mixed when it comes to the very area that Meisinger highlighted in Las Vegas: the strategic dimensions of HR, like talent development and organizational design, that help contribute to an organization’s profitability.

    "There could be more targeted information to senior HR professionals about the strategic issues and HR planning for the future to meet the needs of the organization," says Golino, the Washington chapter president. "They’re not quite there yet; they’re headed in the right direction."

Workforce Management, February 4, 2008, p. 1, 18-25 -- Subscribe Now!

Recent Articles by Mark Schoeff Jr.

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