Is the Human Resources Department (“HR”) On Its Way Out?

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Workplaces have changed and so has the role of HR.  During the Industrial Revolution in the United States in the late 1700s-1800s, there wasn’t an HR department and workers didn’t have many rights.  People worked long days and working conditions were harsh.  But they needed the money and there were long lines of people wanting work, so employers could set wages low and have them work long days in unsafe conditions.  That all began to change in the 1900s when the premise behind the “Personnel Department” came into existence primarily as an administrative role focusing on rules, recordkeeping, forms, hiring, etc.  It wasn’t until the 1980s when the term “Human Resources” replaced “Personnel” in a human-centric effort to better understand the needs and wants of employees.  Today, the push is for HR to be more strategic – moving from process-focused to people-focused with heightened awareness and action towards business results.

HR is typically responsible for managing the people function – from hire to departure, otherwise known as the full lifecycle of the employee journey.  This is one of the most important functions in the organization.  When a position is to be filled, HR must find a qualified person to fill it and foster a workplace that hopefully retains the person.  When things do not work out with that person, HR is called upon to “take care of it.”  And in many organizations, HR is also responsible for total rewards (compensation and benefits), payroll, training and development, employment policies and procedures, compliance (workers comp, OSHA, Affirmative Action, etc.) and it doesn’t end there.  This list of duties HR handles is long. In smaller organizations, a solo HR person may be taxed with handling it all.  That’s a BIG job!  Just as one attorney cannot be an expert in all law related disciplines, it is highly unlikely that even the best of human resource professionals be experts in everything HR.  Many HR “generalists” know a little bit about most aspects of the HR function and may also be well-versed in certain areas.  For an organization to expect their solo HR person to be an expert in “everything HR” is short-sighted.  The key is for the HR person to know where to go to get the information and help they need.  There are no textbooks that make someone fluent in human resources.

There are different ways to manage the HR function whether you have a limited HR team or none.  You can do this by integrating certain functions into existing roles at your organization and outsourcing the rest.

For starters, HR-related tools and technology continue to improve offering the opportunity for employees and managers to be more self-sufficient.  With the broader use and availability of human resource management systems (HRMs) and tools, employees can update personal information, submit time and time off requests, complete benefit open enrollment, and access various records (performance, pay, benefits, vacation), just to name a few.  Managers have the ability to access employee information, utilize the hiring process, manage salary and performance reviews, make employment related decisions, etc.  The information in HRMS also offer the ability to use available data for people analytic purposes to provide better insights into hiring, training, performance, attrition, etc.  By investing in the right tools and technology, part of the administrative burden can be taken off HR.

Secondly, there is a direct correlation between the engagement of teams and the role leaders play in the employee experience. While HR has traditionally been tasked with managing the employee experience, this really belongs to managers and their teams.  Employees are most interested in a feeling of purpose, comradery and accomplishment.  Investing in employees and helping them find their purpose helps to create a trusting, high-performance culture. Managers have the ability to set this tone through open communication, interest, involvement, recognition and development.  It’s a simple concept.  Having a “we’re in it together” attitude is a great start.

Lastly, outsource specific HR tasks when you do not have the infrastructure or ability and automate tasks where you can.  Outsourcing may be the best option for compliance driven processes and paperwork or where there are potential legal risks.  Additionally, automating portions of the hiring process may reduce the administrative load and often can speed up the process of filling a position.

Organizations do have the ability to build an internal structure, in the absence of HR, to handle many aspects of the HR function.  Look at integrating specific areas to other departments, such as accounting/finance for payroll and compensation, sales/marketing for recruitment, purchasing/sourcing for vendor management, etc. Empower and encourage the workforce to be ambassadors of the organization.  Once you have gone through the process of insourcing, then look to using outsourced resources where capabilities and capacity may fall short.

Depending upon your culture, capabilities and collaboration, you may determine that inhouse HR presence is needed, for now, at your organization.   If that’s the direction you decide, whittle down the administrative scope of the function (through insourcing or outsourcing) so HR can focus on more strategic initiatives to be C-Suite worthy and deliver on the people-focused business results.

Over the past thirty years, I’ve had the opportunity to work in the human resources field with a wide range of companies – small, large, privately owned, publicly traded, start-ups, well-established, etc.—both as an employee and a consultant.    There is no one size fits all approach to insourcing or outsourcing the Human Resources function.  So, is the HR Department on its way out?  I don’t think organizations are ready for that yet.  But organizations can work smarter and utilize their HR function in more strategic way.  Don’t know where to start?  HR Outsource can help with an unbiased, independent review of Rethinking the Way HR Works for your organization.

 

Heidi Hoffland, Owner/Advisor, HR Outsource

January 2020

 

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