Say goodbye to the days of paper shuffling. Human resources staff members now draft company strategy and occupy a seat at the decision-making table.
It wasn't long ago that human resources staff members were viewed as mere paper-pushers. They collected résumés, filed job applications and fulfilled all documentation needs related to new hires, departing employees and those who needed to change their benefits or take a leave of absence.
How times have changed.
This new view on HR isn't solely a result of technology, which has moved most paperwork to the computer. Instead, human resources departments have shifted from performing "back office" tasks to serving as frontline cogs in the operation. They now have a seat at the decision-making table and a central role in company strategy.
Oftentimes, traditional HR functions-from processing payroll to benefits administration-are outsourced while in-house staffers tackle big-picture projects such as drafting hiring and retention policies or outlining corporate goals.
"It allows them to free up internal resources. We all know that HR continues to be asked to do more with less. It is changing from an administrative function to a strategic role," says Kyle Pifher, a Findley Davies principal and leader of its defined contribution, recordkeeping and administration practice.
Today, the top HR official might be part of the C-suite, or a corporation might embed HR professionals across its business units. The evolution of the job mandates a deep knowledge of an organization and its goals. "One of the critical pieces is there is more focus on human resources understanding the business. When it works well, human resources is a sounding board for top issues," says Steve Gravenkemper, a partner in the Detroit office of accounting and business advisory firm Plante & Moran.
HR professionals increasingly concentrate on business goals, their firm's capabilities, where to recruit and how to retain employees. Many participate in strategic planning efforts so that everyone in the organization is communicating on the same wavelength. "You have to be a businessperson and understand the strategy of the business," says Carole Watkins, chief human resources officer for Dublin-based Cardinal Health, which employs 35,000 people around the globe.
These expanded duties call for employees who can think more critically than before, says HR consultant Joy Kouns-Lewis, who has worked for the American Red Cross and the Mid-Ohio Regional Planning Commission, among other organizations. "Those who succeeded in HR 30 years ago might not succeed today. The HR professional has become more aligned with business outcomes," she says.
From Backroom to Boardroom
In the past, HR operated in a reactive manner, making changes after issues arose rather than anticipating them as part of strategic planning, says Joan Berry Kalamas, a professor at Ashland University and past president of the Human Resources Association of Central Ohio.
Now, it's imperative to be proactive if an organization wants to remain competitive in the marketplace. Companies also must craft retirement and succession strategies to ensure institutional knowledge doesn't disappear. "With a huge population of baby boomers closer to retirement age, we want companies to begin thinking about meeting those workforce needs. Every community in the nation is facing that. What happens is all that institutional memory goes out the door," says Andrea Applegate, director of workforce initiatives for the Columbus Chamber.
Retention issues go beyond just keeping longtime employees on the payroll. It includes tapping the knowledge of key talent so the organization not only has a succession of people but a line of business knowledge as well, Pifher says.
Kouns-Lewis explored the HR evolution in Central Ohio in her doctoral dissertation. She says her research showed many firms are still adopting new HR protocols, but large corporations such as Cardinal Health, Abercrombie & Fitch, Limited Brands and Nationwide have taken pioneering steps.
The transformation has entered the public sector as well: Ohio State University has placed HR departments within its schools. President E. Gordon Gee launched a major initiative to transform the university's culture, and OSU hosted employee retreats to create high-quality work environments as well as "unfreezing" workshops to banish unproductive work habits. "Human resources has been leading the transformation program. We do have that global reach. We're looking at processes and systems across the university to make sure the underlying structure supports the desired culture," says Kerry Francis, an OSU communications director.
An impact has already been felt at OSU Medical Center's Emergency Department. After a session to streamline communication and improve teamwork, Francis says, ambulance diversion hours have plummeted, customer satisfaction increased from 71 percent to 85.6 percent and the number of patients who left the ER in frustration without seeing anyone fell from 7 percent to 2.8 percent.
Smaller firms face the same issues, but their size means the staff member handling human resources might wear several other hats. But even small businesses recognize HR's role in their growth strategies and attracting top recruits. "With our size, we've constantly struggled between how much and how little we need for HR. As the firm grows and offers more benefits, ideally it becomes more strategic," says Rachel Sullivan, operations manager for DesignGroup, a Columbus architectural firm with 50 employees and two offices.
For the smallest operations, a dedicated HR professional becomes more the exception than the rule. For almost any organization with 25 or less employees, the administrator responsible for HR typically has other high-level job duties, such as chief operating officer, Pifher says.
Smaller firms have resources available to assist them in recruitment, such as the Columbus Chamber's Attract and Retain Talent initiative. Providing businesses with the tools to attract newcomers, relocating them into neighborhoods that fit their sensibilities and getting them attuned to life in Central Ohio helps workers settle into their jobs more quickly, Applegate says.
Communication & Direction
Technology, too, has played a significant role in the evolution by enabling communication between the CEO and human resources leaders as well as outside contractors handling HR functions. For firms that don't outsource, technology has improved the speed of those functions.
In well-run organizations, human resources serves as a nexus for communication where business goals and the people responsible for their implementation intersect. A corporation cannot be truly engaged without the involvement of HR, Plante & Moran's Gravenkemper says.
Sullivan says at DesignGroup, the organizational culture has helped to sculpt HR's role. With more employees seeking a better work-life balance, HR professionals must adapt to the flexibility and environment sought by top talent.
Like many other industries, the recession has hit the architectural field hard as construction projects have slowed. Even as staff reductions are considered, the firm has sought ways to continue to invest in employees, Sullivan says. "These issues are addressed through a different lens. That's all about communication and trust. These are the intangibles that take a lot of time to institute and build upon," she says.
While HR has moved away from its reactive past, leaders must outline clear goals to ensure future success. If a firm doesn't know what it wants from HR or has nebulous ambitions, it could wind up in trouble. "All of this begins with clear direction. Without that, you won't get where you want to be," Pifher says.
Watkins credits strong leadership from Cardinal Health's CEOs, who believe employee talent is vital to the organization's goals. That drove HR into a more engaged position, where the company didn't simply recruit and retain workers, but encouraged greater employee contributions. "We've found that diversity of talent brings additional opportunities," she says.
By stepping out of the backroom, HR sometimes gives employees greater sway in developing policy. Watkins points to an example at Cardinal Health's distribution center, where prescriptions have to be loaded nonstop onto the trucks until they all are shipped. For employees who had a family commitment, that proved difficult until one worker suggested employees be given four to five opportunities a year to leave early. "If everyone works together, we can figure it out. You involve the people in coming up with the solutions," Watkins says.
The company also has implemented more flexible hours for its workforce. There will always be positions where standard business hours aren't negotiable, Watkins says, but a looser schedule allows employees to live their lives outside of work and bring their whole selves into the office. "There are a lot of jobs where the work is more important [than the hours]," she says.
Raising the Bar
HR also has a role to play in merger & acquisition discussions. Staffers can evaluate how the organizations mesh on goals, culture and attitudes, Kalamas says. "Even in acquisition, you want to see if this will work," she says. If a merger were to occur, human resources could help the CEO decide what business lines could be spun off, where staff redundancies lie and what lines of business would blend most easily.
The shift in HR responsibilities has improved these professionals' position in a down economy. In a traditional setting, such jobs are often among the first casualties because of their supporting role. Firms don't hire when business has dried up, so the people who do the hiring become expendable. But for HR staffs with more strategic responsibilities, corporate leaders expect their help in turning business around. "It does mean the bar has been raised, and they are looking for someone who is more than transactional," Gravenkemper says.
Still, the shift in job duties doesn't give HR professionals the luxury of specializing, Kouns-Lewis says. In anticipating organizational needs and goals, they must tap a broad range of knowledge. "HR practitioners must also continue to strive to become generalists rather than specialists, prompted by requirements to perform a wide variety of duties in less time with fewer resources," she writes in her dissertation.
For an organization hunting for a strategy-driven HR professional, the options are plentiful. One popular designation has made those candidates easier to identify. The Human Resources Certification Institute's Senior Professional in Human Resources (SPHR) test has only a 50 percent passage rate, but applicants with those initials behind their name often land at the top of the résumé pile. "We see that reflected in the postings. Someone who passes the test shows they understand the body of knowledge. The breadth of knowledge is huge," says Kalamas. Both she and Kouns-Lewis have earned SPHR certification.
Some organizations draft a top executive to lead HR, Gravenkemper says. Those moves generate instant credibility with other members of the C suite. In other companies, the opposite holds true: HR administrators spend time with other department managers to get a better grasp of the business. This takes the HR professionals out of their comfort zone, but gives them good standing with line managers and staff across different business units. "As they see them more often, it builds credibility from a strategic focus," Gra-venkemper says.
By taking on more business functions, HR departments have a better handle on corporate operations, which aids them in dealing with the workforce. "Knowing how business decisions affect HR decisions keeps me grounded. I can do what's right for the company and for the employee," DesignGroup's Sullivan says.
Bill Melville is a freelance writer.
Reprinted from the October 2010 issue of Columbus C.E.O. Copyright © Columbus C.E.O.