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The Future of HR Leadership — Transforming Companies From the Inside

  • Groundswell
  • August 25, 2022

HR professionals are central to all employee-centered needs of a business. They are responsible for employee recruitment, training, engagement and management. They help ensure that all employees understand and follow company policies, potentially saving the business from landing in legal hot water. HR is the one department that touches every employee in multiple ways across their entire relationship with their employer — from the first face they meet in hiring interviews through conflict resolution, professional development and accessing their benefits, up to planning their exit and retirement from the company. 

When you consider all the responsibilities of the HR department, it’s hard to believe it could become even more central, but that’s the likely future of HR. In a world where the entire corporate structure — indeed, the very concept of what a corporation is and does — is rapidly evolving, the human resources department is taking on an increasingly central role in business management, and that’s likely to continue.

Before looking at the future of HR and what it holds for HR professionals, employers, employees and the corporate world as a whole, it’s important to take a look back at the origins of the modern human resources department.

The Evolution of the HR Department

Not that long ago, the idea of a department devoted solely to addressing the needs of employees was a foreign one. Until the late 19th to early 20th centuries, employees were seen as largely expendable. Employee management consisted mostly of payroll management. With few laws protecting workers, there was little reason to employ anyone other than bookkeepers to ensure that workers were paid as promised.

That all began to change with the Industrial Revolution, as leaders of the industry began to realize the importance of a healthy, happy workforce to business success. Robert Owen, a Scottish textile manufacturer, and Charles Babbage, a mechanical engineer, are generally credited with being the fathers of human resources by connecting worker treatment with worker productivity. 

Early Days: Employee Relations and Safety

Babbage and Owen’s theories coincided with a growing labor movement that demanded better, safer working conditions, often through costly — and sometimes violent — labor stoppages. The first personnel department — a precursor to the HR department — was created in reaction to a series of strikes and quality control issues at the National Cash Register Company. In 1901, owner John Henry Patterson concluded that “Enthusiasm is the biggest asset in business… Therefore, we have solved the labor problem…if we can infuse enthusiasm into all the various kinds of people who go to make up a working force. It is a give-and-take proposition of mutual benefit and mutual responsibility.” 

Following his conclusion, he set up a department to deal exclusively with employee relations. In addition to handling payroll, the new personnel department also handled employee complaints and disputes, maintained employee records and managed an impressive list of benefits designed to keep its employees content. 

While Patterson was a pioneer, other industry leaders were also learning the benefits of providing incentives for their workers: employee loyalty, reduced retention and training costs, higher morale and increased productivity. 

Mid-Century: Rules Compliance

In the 1930s, labor unions achieved a series of legislative victories that culminated in the creation of the National Labor Relations Board, which forced a shift in the focus of the personnel department to ensure that companies complied with new laws and regulations. Where the early incarnations of HR management had focused on managing employee relations and benefits, the focus on rules compliance fundamentally changed the structure and role of the HR department. While the department was still responsible for the functions of personnel management, they now also had to contend with a growing raft of regulations encompassing worker safety, equal pay and discrimination in hiring, firing and disciplining workers. By the 1970s, the personnel department had evolved into the typical HR department, concerned with hiring, firing, training, disciplinary measures and benefits management. 

Late Century Evolution: HR as the Bad Guy

In the 1980s, the growing use of the office computer and the arrival of the HR information system (HRIS) revolutionized the HR department yet again. The new technology freed up hours of HR time by making personnel records easily and quickly accessible. By freeing HR professionals from the time-consuming task of keeping paper records, HRIS had the potential to empower the department to renew its focus on recruitment, training, retention and planning. Unfortunately, the 1980s also ushered in the era of downsizing, with many companies gutting their HR departments, and others pushing them into being the “bad guy,” delivering the news of layoffs and cost-cutting measures. Between their roles in compliance enforcement and discipline, HR acquired a reputation as the department with no sense of humor. 

HR Today: A Transformative Evolution

As companies outsourced many of the traditional HR functions to payroll and benefits management companies, business pundits began predicting the death of HR as a profession — but they were premature. Instead, the combination of better technology and changing attitudes toward workforce management have again turned HR toward its original principles — improving relations between management and the workforce. The adoption of HR platforms that allow employees to access and manage their own benefits has freed the HR department from its most tedious traditional tasks and returned the focus to attracting, training and retaining talent. 

The Future of HR: An Active Partner in Corporate Leadership

In the process, the corporate C-suite has begun to recognize the creativity and people skills of HR professionals. Over the past decade, the HR department has been moving out of its role as a buffer between management and labor and coming into its own as an active partner in planning and implementing future plans and policies. The upheaval of the pandemic accelerated the transformation by highlighting the vital role of HR in helping ease the sudden transition from office work to remote work. As companies continue to evolve and adjust to changes on the ground, executives will increasingly turn to HR professionals for their expertise and knowledge in the field of personnel management, recruitment and retention.

Today’s corporate culture is recognizing that employees are at the center of their company’s success. In order to remain competitive, they need to evolve to meet the needs and expectations of their employees. No one knows how to do this better than the HR department, which puts HR professionals in the perfect position to actively collaborate and lead corporate teams in redefining company purposes, goals and future strategies. After all, HR management is about empowering people to be the best they can be. It’s not a stretch to apply the same principles to inspiring entire companies to rise to the same level.

How Groundswell Supports Your HR Team

Groundswell recognizes the work, talent and creativity that goes into HR in the modern workplace. Our platform gives your HR department tools that take the time-consuming work out of administering your corporate giving program while providing a seamless way for each of your employees to support the causes that mean the most to them. 

Contact us to learn more about how Groundswell can support your company in attracting, incentivizing and retaining top talent by providing them with the means to do more good.

  • Groundswell
  • August 25, 2022