Minding the Commons: HR 3.0

This post is part of the Blogswap. David Kippen writes today about the short history of HR. Enjoy!

Since this is an HR blog, I’m going to throw those shiny coppers at a brief history of HR…wait…don’t go…this will be short!

Okay, thanks for sticking around for a minute.

Let me start with the relevant bit. I know you know that HR is in a period of immense transition.

You’re in the consulting space, it’s a time of immense opportunity; if you’re in HR, it’s a time of immense risk. And, as Fast Company so famously pointed out late last year, there’s not a whole lot of love going ‘round. So let’s take a look at how HR came to be what it is and at least one opportunity to help it become what it can and should: a strategic profession.

Though recruiting has been around since business began, much of what became what we call the modern HR function evolved from personnel departments. These were, in turn, the outgrowth of WW II wage freezes.

Why does that matter? Well, think about what most of the job of RPA (records and personnel administration) was.

RPA delivered primarily administrative support relying on home-grown systems (the “legacy systems” of today), to develop company-specific, custom plans ranging from policies on leave to benefits design. The point is, until at least the 1970s everywhere — and much more recently in many places — the job of what eventually came to be called Human Resources was to create customized home-grown solutions to most problems.

As a result, the primary challenge you faced as an “HR Professional” was to understand the process.

SHRM research illustrates the home-grown nature of this earlier version of HR, finding that HR practitioners who have been in HR less than 10 years tend to have started their career in HR, while HR practitioners who have been in HR for more than 10 years had prior work experience that was not in HR. (“The Maturing Profession of HR: Worldwide and Regional View” Feb 2005)

In a phrase, HR was a high-touch, low volume, locally-run in-house service

The people who held these roles — and who did a very good job at them, for the most part — were likely to be well connected within the organizations in which they worked. The rewards of “the old HR” are interpersonal, and the people attracted to the work tended to be both relationship driven and known for “smiles and files,” not strategy or business savvy. And, of course, given the work, these folks needed to have a high level of comfort with procedural thinking though they were typically neither asked to be, nor innately, strategic. When strategy was called for, it was typically supplied by vendors and a small group of large “consulting partners.”

During the last ten years almost everywhere, but much earlier in some places, a radical set of changes in what HR is held accountable for has taken place, dramatically transforming the function and challenging the people who remain.

Chief among these changes, of course, was the advent of business process outsourcing’s move from IT to HR. What started as an attempt to standardize some plans (typically, dental and vision plans, then defined contribution plans, then medical plans, then defined benefit plans) because a move to replace HR administration.

This change was driven by a new (for HR, at least) focus on cost containment and efficiencies of scale. Over time, enterprise solutions replaced legacy systems; vanilla installations of these systems (think Oracle, PeopleSoft, SAP) by their very nature enforce standard plan designs and administrative rules. In turn, vendor or centralized HR services (like shared service organizations) replaced “the HR office down the hall.” In sum, that high touch, low volume locally run in-house service moved from a comfortable, people-centered cost center to business at serious risk. In turn, the people who called themselves HR professionals had two choices: move out, or leave the procedural thinking behind and learn to get comfortable in strategic roles.

Now, while many good people have been displaced, it’s nevertheless hard to argue with the benefit in value of having these new tools, which can actually begin to allow HR to measure ROI and value-add. Similarly, it’s hard to be upset that more senior HR leaders sit at the “big table” than ever before.

But those consulting partners? Actually, it’s possible to feel quite sad about what’s happened there. Sadly, many of them have been sucked into the boiler room. Instead of doing the fun, strategic stuff they’d done in the past, too many of them are spending their time feeding the BPO machine their organizations have become.

Today, this world of HR is still in transition, but if you’re in HR, the trend line is clear: evolve, or die. There are only two paths leading to continued viability. One is adding strategic value. The other is finding cost savings.

Today’s HR leaders must deliver strategic results or leave, but many of them are legacy players lacking essential strategic skills, business knowledge — and often, support from their cohort group — necessary to enable them to succeed. One level down, HR managers are told that they must align with the vision, not the work — but the work must still get done. And both leaders and their reports increasingly manage vendors and contracts, not people and relationships, and must work more closely with business partners to deliver on bottom-line-driven objectives

What’s the point of all this? To me, two things are pretty clear about the people who continue to survive in HR. One is that they’ll do so because of their success in developing partnerships outside of HR. The second is that the strong mandate around costs won’t go away.

So here are a couple key opportunities this creates, both for HR professionals and for their internal and external partners. The opportunities are in the brand arena, but I’m not calling them out because I’m a practitioner, but rather, because I sincerely believe it’s the most strategic, people-directed opportunity in the HR realm.

So here goes:
- If you’re in HR, you need to understand brand. I’m not talking about happy-clappy pretty pictures, I’m talking about learning brand the way someone who lives in marketing or communications (MarCom) understands it. Nobody in marketing has to make the case that brand is strategic — at least, not to leadership. And once you get what it is, how it works, how to build it and manage it, learn how to measure impact, ROI, value of that employment equity. I don’t have a silver bullet for measurement — different numbers are important in different organizations – but that strong mandate around costs translates to a strong benefit in demonstrated outcomes. (And it’s not rocket science.)
-On the partner side, help your HR colleagues elevate their game. Don’t give them simple decks and send them off to embarrass themselves: give them the kind of advice and context for thinking about brand that you use to develop brands. And help them measure the work you do. Agencies should never get away with saying “leadership loved it.” They must learn to say either “…and it delivered these tangible benefits” or “…and here’s what we’re going to do to close the gap, and here’s how we’re going to measure our success.”

When we get there, who remains will be a strategic professional in earnest.