· 5 min read · Features

How has HR evolved in the last 25 years?

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HR magazine is 25 years old. To celebrate we look back at the profession's growth into what we know today

BBC HR director Valerie Hughes-D’Aeth recalls what day-to-day life was like in the average HR, or rather ‘personnel’, department a quarter of a century ago: “We worked with paper employee files and, if lucky, basic spreadsheets of staff data. I used to hand write HR reports with a ruler, and pen tables of statistics that I calculated manually. I used to manage recruitment and reward across Europe; travelling every week to different European countries and juggling a series of envelopes containing local currency.”

“There was little regard for employee wellbeing at work and smoking in offices was the norm,” she adds, remembering “having to introduce a no smoking policy and being the subject of hate messages for months because senior managers who had their own offices refused to co-operate, arguing their smoking didn’t affect others”.

An extremely different world – in many ways, thankfully – to today. But it is not only radical enhancements to technology and automation, a liberalisation of attitudes, and advances in health and wellbeing knowledge that have dramatically altered the essence of what it means to work in HR. The evolution of the profession over the last quarter decade – from ‘pay and rations’ to personnel to HR – has been arguably by far the most radical of all the business functions, believes Cary Cooper, 50th anniversary professor of organisational psychology and health at Manchester Business School. And the profession should be pleased with the meteoric rise it has achieved.

Monumental change

“I’m quite proud of HR,” says Cooper. “If you look at marketing it’s moved to engage with social media to promote products but that’s about it… I think HR has been forced to change the most.”

“In many companies there is less variance, therefore less risk, in finance, marketing, and IT services than in HR outcomes of talent, leadership, and capability,” agrees Rensis Likert professor at the Ross School of Business Dave Ulrich. “Where there is more risk, or variance, there is a chance to differentiate and become more unique. So HR outcomes are increasingly a source of competitive advantage.”

What the profession has achieved, at least in many circles, is nothing short of a rise from obscurity to vital importance. “The main difference for me is if you go back 25, 30 years to when I started, HR stood apart from the business. HR was something that was called out of the cupboard if there was a problem to fix, as opposed to being integral to how the business was run,” says group HR director at IMI Geoff Tranfield.

The drivers, he explains, have been rapid globalisation and technology’s significant levelling of the business playing field. “It’s about economic conditions,” he says. “If anything it’s even more competitive than it used to be. You have to run pretty fast to stand still, never mind move forward. Functions being less than 100% value-adding is even less of an option than before.

“If you look around, from a UK perspective there aren’t protected industries anymore,” he adds. “In a modern economy there aren’t many places to hide.”

Though the drivers may be different, the pressures on public sector HR are no less acute. And HR has done no less of an impressive job, on the whole, of transforming itself to rise to the challenge says Barry Pirrie, president of the Public Services People Managers’ Association (PPMA), and director of people and business services at Wiltshire Council.

“Back then [25 years ago] HR was still performing a predominantly welfare role and seen as a ‘tea and sympathy’ function more focused on providing employee support and less focused on delivering strategic business solutions. Today an HRD is a strategic director responsible for a highly skilled, professional function supporting business transformation,” he says.

“As public sector organisations shrink, performance is a higher profile issue and requires a bolder, quicker approach,” he continues, adding that “as the size of HR and OD functions in the public sector faces its own scrutiny, we have to be clear about our ability to add value, provide new answers to new challenges, and show we are worth the money.”

Still a way to go

As Pirrie highlights, there is no room for complacency – in public or private HR functions. In the words of UK and north-west Europe HRD for Siemens Toby Peyton-Jones: “There is still quite a long way to go.” For Peyton-Jones HR must stay on top of the push to further automate and hive off administrative tasks if it is to fully realise a strategic, indispensable role. His vision for the next 25 years is for all admin tasks, including those in finance and IT, to sit in a “total shared service concept”.

“There are a lot of organisations where HR is highly regarded and adding real value, but there are also HR functions that provide less than effective transactional support and management information,” agrees Hughes-D’Aeth. “It is essential that as a profession we provide efficient and effective support in the basics of HR, giving ourselves time to focus on guiding the wider organisation change issues that are needed to ensure the business is sustainable and competitive.”

Tranfield agrees there is a danger that if the profession doesn’t achieve exemplary operational efficiency as quickly as possible and seize the resulting chance to make a strategic impact, it “will become commoditised and devalued”.

“When people talk about ‘has HR got a seat at the table, are we business people or HR people?’ that worries me; as a profession we can be too self-obsessed and narcissistic,” he says, adding that the function must be wary of becoming so preoccupied with “cutting 1% here or 2% there” that it “loses relevance and influence”.

For Ulrich there’s much encouraging evidence that most have moved away from a preoccupation with ‘a seat at the table’. What’s needed now, and is in many circles already happening, he says, is an evolution from “a mostly talent agenda –right person, right place, right job, right motivation – to an organisation capability agenda – building capabilities of speed/agility, information/external sensing, collaboration, culture change, and innovation.”

What’s really required, he adds, is a globally-focused “growth mindset – a combination of learning, resilience, grit and agility”. “I hope HR professionals continue to be open to having a growth mindset to continue to learn,” he says. “We see outstanding HR professional groups emerging in each region of the world, offering thoughtful services. I hope this global collaboration can continue so that HR continues to evolve.”

Completing the puzzle

For Cooper the imperative now is for HR to realise there is no one “magic bullet”, such as employee engagement. “What the employee engagement movement did was provide metrics to measure engagement,” he says. “But by itself it is not the magic bullet that organisations need to get people motivated and more productive. It hasn’t changed our productivity or our sickness absence rate.”

What’s needed now, says Cooper, is the engagement piece of the puzzle to be slotted into place with several other pieces.

“We’ve put our toe in the water in each of the bits of the puzzle: so engagement, the health of employees, a little bit of work on the manager’s role, on the hours that people work… It’s like going to a restaurant. We’ve done the taster meal and now I think we realise it’s not any one of those that’s going to solve our problem. So we’re going to sit down and have a well thought-out five-course meal that will tackle all the issues”.

Cooper is encouraged, in light of the profession’s achievements over the past 25 years, that “this is the direction we’re now going.”

The heart of the business

So there is much to be proud of over the last quarter century of HR. “We’ve moved from a reactive, back office, administrative and welfare function that was often considered bureaucratic and a bit of a nuisance, to a proactive function that is at the heart of an organisation, managing very significant change and adding real value,” reiterates Hughes-D’aeth.

“HR has saved organisations from themselves and been their conscience at some difficult times,” points out Peyton-Jones. “I think HR has played a profound part in the industrial relations journey. Where there is real difficulty it’s helped provoke the right conversations at board level… what I’ve seen is HR being courageous in many difficult situations.”

And so here’s to the next 25 years of HR (and of course HR magazine), and to the profession really coming of age right across the board. And here’s to the important recognition that, in the words of Cooper: “HR has been trying to find its role, and now it understands its role is for us all to have a good day at work.”

Further reading

Richard Smelt: My 25 years in HR

From the HR editors: Martin Leach