They will also face an additional challenge as firms become more integrated and may have to serve employees from separate organisations.
Speaking at a Career Moves Group breakfast in London, professor of international HR management at Lancaster University Paul Sparrow predicted that dedicated HR departments will get smaller.
Sparrow, who is also director of the Centre for Performance-Led HR, told HR magazine that other departments would absorb HR elements.
The CEO of a company will be less concerned about which functions people report to, said Sparrow, and leaders will value connections and influence over projects more than operational control of individuals.
The dangers this poses include the “fragmentation” of HR. “We have to be careful that we don’t lose some of the specialist work we do around employee engagement and values as we devolve HR into more line structures,” he said.
Miriam Koller, HR director at Bibby Financial Services, said HR needs to be more vocal about its unique qualities. “Overall, I see this move as a positive thing. Being more integrated in the business will give us more influence,” she said.
“Some people see HR in a very negative light, but as a function we bring very specialist knowledge around making sure leadership gets the best out of all their staff. We need to make sure people are aware of this and that it cannot be done as part of another department.”
Former ITV HR manager Patricia James agreed there will be big changes in the future. “When I was at ITV seven years ago, I could see a shift in HR directors becoming much more involved with other areas of the business,” she said.
“The strategic thinking was becoming more prominent but we still had to keep the operational side ticking along. In the future, senior HR professionals may not even have to sit within the department because they will be more outward-focused and business-driven. This could lead to job losses within in-house HR teams in the next three to five years.”
Sparrow said that as the lines between HR and other departments become blurred, employees may find their identity increasingly ambiguous. “Some HR business partners have done such a good job that the business wants to adopt them as their own,” he explained.
Traditional HR structures also face challenges due to the increased interaction between companies and their reliance on each other. This can lead to an HR department not only having to serve its own staff, but also those of affiliated companies.
Sparrow cited Rolls-Royce, saying the nature of its contracts means it relies on sub-contractors to deliver engine performance for its customers and would suffer dire financial consequences if these smaller companies failed. Therefore, the HR department in Rolls-Royce might be called upon to resolve issues for its partners.
In such a case, HR essentially plays a “business consultancy role”, applying its specialist knowledge to improve processes at a separate company, he said.
Simon Gibson, director of learning and development at NBC Universal, said: “There is a very interesting question here about how much you support your supplier with your approaches, development and insight.”
He added that influencing another company could prove to be difficult for an HR function: “You can try your hardest to support another firm, but the element of control disappears when you’re not in the same environment.”
