From Personnel to Business Partner – how HR has evolved since 1995
ResourceBank was established in June 1995 and we are looking back over the last 20 years to see how specific roles have changed and adapted over this period. Today we look at how the role of the HR professional has changed….
Back in 1995, HR was most often referred to as “Personnel” and viewed as a support function for many organisations. Rather than being a strategic business partner, the “Personnel Manager” was viewed as the administrator of pay awards, the manager of disciplinary sessions, and a budget holder for training and recruitment. He/she would look after functional activities such as manpower planning, recruitment, job analysis, job evaluation, payroll administration, managing performance appraisals and related tasks. However, many HR professional were keen to distinguish themselves from the more administrative functions and wanted to think differently and strategically about their role.
The Ulrich revolution
The publication of Dave Ulrich’s book “Human Resource Champions” in 1997 in which he outlined the three-box HR model (shared services, centres of excellence and HR business partners) was a major catalyst for change. So much so that a recent survey of large UK businesses found that over 50% had invested in the “Ulrich model” for HR, with significant investment in IT and shared-service centres. When measuring the performance of the model, over 90% of their organisations had benefitted in terms of commercial focus and alignment to strategy and greater efficiencies.
The beauty of the Ulrich model was that it recognised the different roles that HR professionals could deliver within an organisation. They could become specialists in a functional area or they could become a Business Partner – giving more strategic and business-focussed input to their organisation.
As HR shared-service centres became established as common centralised functions for handling payroll, advisory and employee relations issues, focus was given on how to make them as operationally efficient (and as cost-effective) as possible. This gave rise to the increased outsourcing of operational HR. By delegating the processes to an external provider, ownership, management and administration of the service can be based on defined and measurable performance metrics. HR professionals within businesses that outsourced operational HR were then able to focus on organizational developmental activity such as leadership, motivation, developing organizational culture, communication of shared values, and so forth. Training and development for Business Partners, in HR, Talent and OD, encompasses consultancy skills and strategic thinking, and less about compliance and policy adherence.
Taking a step back to the 1990’s, Personnel career routes were commonly vertical and standardly recruited via graduate routes, into Trainee Personnel Officer roles, through to Personnel Managers. The profession rarely took in roles from outside the traditional skillset and certainly there was an element of “protectiveness” within the profession.
However, move forward 20 years, and by 2013, almost half of HR directors surveyed said their last job role was outside of HR and seven out of ten HR directors worked in roles outside of HR, five job roles ago. This suggests that time spent learning elsewhere in the business or rotating in and out of HR could be valuable in reaching a senior HR position.
Organisational development skills in highest demand
Going back to 1990s, organisational development and design was a relatively new concept, as organisations did not have the complexities they have today with global reach, internet capability, increased competition and virtual teams. In recent years, the skills below have been the ones most in demand (and most challenging for businesses to recruit for :
- Organisation development (36 per cent)
- Employee engagement (34 per cent)
- Performance and reward (33 per cent)
- Learning and talent development (29 per cent)
- Organisation design (28 per cent).
In the current day, the HRBPs which are most effective as change-agents are those who are innovative, influential, challenge the status quo and very importantly, show business acumen and commercial understanding. Training, coaching and development within HR is still evolving and will continue to evolve moving forwards to meet business needs.
Back in 1995, the internet was in its infancy within UK businesses and most HR activity was paper-based and manually collected. Information was mostly sourced through printed reports and shared via post or though face to face meetings. Fast forward to 2015, where there is a myriad of technology tools and bespoke systems in order to make the HR function more effective, the challenge is more on the sourcing, analysis and interpretation of data. HR professionals need to have an understanding of technology, but more importantly how to utilise the data provided in order to make proactive and effective decisions
The future outlook
In the 2015 HR outlook survey ‘working with the organisation to drive change’ Leadership development has climbed the rankings to become the most important area for HR practitioners to focus on in 2015 (compared to 3rd place in 2012), whilst over half of HR practitioners feel confident about using data and metrics to instigate change in the organisation or to improve the HR function’s effectiveness, but less than half said their HR function goes on to draw insight from people data and communicate it to stakeholders to drive competitive advantage.
The CIPD focus from 2015 onwards is clearly around developing the leadership capability to drive that change.
To conclude, the HR profession has changed significantly over the last 20 years, from a “personnel” department to one which can have a real impact on the bottom line of the business – developing skills, expertise, influencing culture and driving business performance. HR’s challenge is to maintain that influence and to continue to deliver effective ongoing results for the business in a competitive environment. For that it needs to attract and develop skilled individuals into the profession with the abilities, vision and determination to take HR forward for the next 20 years.
ResourceBank was established in June 1995 and we are celebrating 20 years of providing HR and Talent solutions to clients throughout the UK and Europe.