There’s no denying it; the HR function has seen drastic changes in the past few decades. From its early beginnings as the personnel department to being one of the key stakeholders in a company’s operations, the HR department has enjoyed a slow ascent in the organizational hierarchy. Let’s draw up a comparison of how things were back then and how they are now.
Reactive vs. Proactive
The first evident difference is how the HR department has changed in scope. Back then, HR’s range was limited to problems within the organization. Need a new hire? Call the HR guy. Feel that an employee needs to undergo disciplinary measures? Call the HR guy. The HR department would only be called upon if upper management faced a workforce related problem.
Today, the role has become much more proactive, and HR doesn’t necessarily need to limit their range to problems. Rather, they would also be on the lookout for new opportunities and developments within the industry and try to stay ahead of the curve. Companies pour thousands of dollars into research every year to come up with ways of reducing their employee overheads. The HR department now works in conjunction with the CEO to design the company’s compensation philosophy. This is a testament to the HR department’s new role as a key stakeholder within the organization.
This has also shifted the paradigm from a short-term orientation to one that aligns with the company’s long-term goals. The basic function of the department was to deal with problems relating to employees as well as administrating control measures to keep them in check. Now, HR makes sure that the company’s employee policies are in line with the company’s values and actively works on new ways to boost productivity.
New employee compliance measures such as fixed minority and gender quotas as well as overtime limitations fall under the HR manager’s job description. For example, the new FLSA amendments now state a lower overtime threshold at 40 hours for employees earning less than $970 a week. Managers must now work out ways to streamline their operations with these new guidelines. They are also responsible for conducting equity adjustments, both internal and external, as well as gauging market wage levels by going through comparator data.
Cost vs. Asset
The biggest change isn’t something tangible. Rather, it’s the way the HR department is perceived. In the old days, HR was seen as an expense to the company, literally; their salaries would be credited as an expense within the income statement. Today, the department is considered an asset to the company, with the HR manager positioned at the same level as line managers. In fact, many businesses now offer them equity as payment rather than a conventional salary, with HR managers often being considered for chief executive positions. A perfect example of this phenomenon are individuals such as Marry Barra, Lisa Weber, and Nigel Travis, all of whom worked in HR in differing capacities.
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