Where We've Come From

Human resource leaders have experienced dramatic functional shifts in 20 years, from administrator to business leader, necessitating a new sort of integration into organizations' structures.

Sunday, April 1, 2007
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Since the very first issue of Human Resource Executive® rolled off the presses two decades ago, human resource professionals have witnessed numerous changes in the field. Among the most significant has been the concerted effort to upgrade the professionalism of the HR function.

Certainly, success has been achieved on that front. While numerous HR executives now assume integral roles within their organizations, with many in critical C-suite roles, it hasn't always been that way.

To help us assess just how far HR has come since the magazine's inception in 1987, we talked with HR leaders featured in its first and second years who remain active in the profession today. The general consensus among them is that HR has made some very significant advances.

Only 20 years ago, the emphasis in HR focused on service, support, employee relations, listening skills, recruiting and ensuring compensation programs were competitive. At the time, Ian Ziskin, then director of HR at TRW Systems Division in Fairfax, Va., had assumed responsibility for the design of a flexible benefits plan. He also served on the team that participated in contract negotiations for the Dayton Motor Division of Cleveland-based TRW Inc., as detailed in the May 1988 issue of HRE.

In the late 1980s, says Ziskin, now corporate vice president and chief human resource and administrative officer at Los Angeles-based Northrup Grumman, much discussion focused on ways HR executives could become strategic business partners.

"The profession began to articulate some competencies that were expected of HR professionals, including having a better understanding of the financials and a grasp on business," he says. Practitioners actually began to "apply HR tools and principles" to business priorities. Over the past 10 years, he has perceived a growing emphasis on change management and the necessity for HR professionals to develop the skills necessary not only to deal with change, but "to help lead it."

Tony Rucci was featured in HRE's November/December 1987 issue when he was the corporate vice president of HR for Baxter Inc. in Deerfield, Ill. At the time, he helped facilitate the merger between Baxter and Chicago-based American Hospital Supply Corp. Now a semi-retired senior lecturer at Ohio State University's Fisher College of Business in Columbus, Ohio, he agrees with Ziskin's assessment.

Twenty years ago, organizations looked to identify HR leaders. "Today," he says, "we're looking for business leaders." In addition to developing personal credibility and business acumen, says Rucci, "I look for HR leaders to be primary change agents."

HR executives also need to be "diagnosticians," becoming adept at detecting problems in the sales force or operations, for example. While CEOs "didn't expect HR people to have that competency" 20 years ago, Rucci says, the field today requires knowledge of balance-sheet ratios, customers, what drives those customers, who the competitors are and what drives success in competing companies. It also requires "a realistic business assessment of their own company," he adds.

The real litmus test for HR executives today involves their ability to speak "intelligently" for 15 minutes about the strategic and economic positioning of that firm, Rucci says. "An HR executive ought to be able to do that."

Picking up the Pace

Even as HR executives develop new skills and embrace new challenges in an increasingly complex profession, the pace continues to quicken. "Everything is faster," says Madelyn Jennings, featured in HRE's March 1988 issue during the launch of Gannett Co. Inc.'s USA Today. Her innovative staffing strategies as the senior vice president of personnel at the Arlington, Va.-based publisher prompted kudos from her own management team, as well as from the American Society of Personnel Administration.

Jennings, who, though retired, serves as principal of the Bedminster, N.J., Cabot Advisory Group, says use of computers, BlackBerries, e-mail and cell phones translates to expectations of stepped-up productivity. Often, the barrage of information results in an "overload that consists, in some part, of unimportant stuff," she says. It's sifting out the important information that presents a real challenge, she says.

Indeed, technology has played a large role in HR's evolution. New concerns have emerged over workplace behaviors related to the use of computers, electronic data issues and data accessibility, according to employment strategist Cathy Fyock of Innovative Management Concepts in Crestwood, Ky.

"We need to be technically savvy," she says. "We need to understand how to adapt our methods to come into the 21st century."

HR executives need to develop integrated HR systems to support HR and the business, Fyock says. HR also needs to understand the shift to e-HR, employ a more strategic approach to HRIS and be able to communicate effectively with systems people to achieve objectives.

"We also need to be savvy in Word, Excel, PowerPoint and e-mails so that we can be responsive in the workplace," she says.

Time lags that might have been customary, or even expected, 20 years ago are unacceptable now, says Ziskin. "Everything that's being delivered today has to be done faster," from communications to training to administrative functions.

Although Ziskin finds "the virtuality with which work gets done" very exciting, he recognizes the downside of technological capabilities. "Everyone is now expected to be universally available; no matter where you are in the world, there's an expectation of connectedness," he says.

Nevertheless, the advantages of technology far outweigh the disadvantages, Ziskin says. The electronic workplace "enables higher degrees of flexibility in where, when and how work gets done," he says.

Evolving HR Skills

Twenty years ago, getting the job done for HR professionals meant familiarity with, and competence in, administering compensation and benefits, communications, labor relations and recruiting, according to Susan Boren, who, as the top HR official for Minneapolis-based Dayton Hudson Department Store Co., told her story in HRE's May 1988 issue. At the time, her efforts were directed toward making the HR function more customer-oriented.

Those specialties haven't gone away, Boren says. However, in 2007, organizations seek HR executives with "broader skills." HR practitioners need to have spent time in more than one of those functional areas before taking on a senior role, she says.

Often, HR executives need to have spent time abroad to expand their exposure and experience. And just as organizations' needs vary, "there is no one-size-fits-all model that applies across all areas of the world" to HR professionals' skills and backgrounds, she says.

Workforces also now include Generation X and Y workers, requiring a whole new perspective. HR executives need to recognize that younger employees are more independent, says Jennings. The new generations require "more understanding that there's more to their lives than their jobs," she says. More socially conscious, the new generations are "serious about their personal time and their right to personal time," says Jennings. "And they're more global in their thinking."

Diane Iorfida, too, has seen a vast change since 1987 in HR executives' required skills. That year found her at Ravenswood Health Care Corp. in Chicago, where she served as assistant vice president. Profiled in the "Up and Comers in HR" feature in HRE's May 1988 issue, she remembers when HR skills in 1987 meant dealing with compensation, benefits, employment and HR laws.

Iorfida, now senior vice president for human resources at Minneapolis-based Fairview Health Services, says that's no longer the case. "First and foremost, HR people must understand the business they are in," she says, from cash flow, market share and customer base to leading an organization in managing change.

The HR role also includes knowledge and practice of performance measurement and feedback, leadership development, rewards packages and recruiting, Iorfida says.

One skill, however, has remained constant over the last 20 years, according to Tom Denton, also featured in "Up and Comers in HR" in the same issue. At the time, Denton, then vice president of human resources at Providence, R.I.-based Rhode Island Hospital, advised, "Don't be afraid to be controversial. . . . It's OK to rock the boat, but know what you are talking about."

Now the vice president of human resources at Day Kimball Hospital in Putnam, Conn., Denton believes that, in order to be successful in HR, you have to have the courage to be controversial. "It was true then," he says. "I think that's still true today." Also critical is a "certain amount of political expertise."

"There are political aspects and elements to every organization," he says. All organizations have internal politics -- who likes who, who doesn't like who, who's in favor with the boss, personal as opposed to organizational agendas -- at least to some extent. "If you don't acknowledge that fact, then you're being naïve."

HR executives, in addition to being technically competent, must be able to exert their influence in such a political arena. Denton suggests this requires a high level of interpersonal skills, along with the ability to discern "what's right instead of who's right."

Changing Laws

Recognizing and understanding the impact of legal changes affecting HR has also become an important aspect of the function.

Significant changes in the Fair Labor Standards Act, pregnancy protection, Americans with Disabilities Act and other laws with HR implications have prompted the need for additional education among HR professionals, so practitioners can "manage risks in appropriate ways," says Fyock.

The Family and Medical Leave Act itself has had a profound effect on HR practitioners in its administration. In Iorfida's estimation, the "No. 1 law that has been the most expensive for any American business is the Family and Medical Leave Act. I don't think anybody in Congress had a clue what this was going to cost, not just in payroll dollars, but in productivity."

The detrimental impact on operations occurs when organizations accommodate lengthy leaves, during which positions are often filled with temporary workers with no stake in the organization's productivity, she says. Not only are the knowledge and skills of regular workers lacking, but temporary workers frequently perform duties half-heartedly at best with the knowledge that their tenure will end shortly, she adds.

The FMLA, Iorfida says, has been an absolute "disaster for American business."

Litigation poses an imminent threat to organizations' smooth functioning as well. "Society in general tends to be more litigious," Ziskin says. Disputes, disagreements and differences of opinion formerly handled internally now present a much higher probability that employees who feel wronged will "seek outside involvement much sooner," he says.

Increasing use of alternative dispute resolution within organizations and development of fair mechanisms for adjudicating employee concerns is essential to ease hair-trigger litigation threats, Ziskin says.

And, he adds, an increasing emphasis on ethics and integrity has emerged over time. The pressing need to focus on ethics moved to the front burner in the wake of recent scandals such as the Enron fiasco. HR is uniquely positioned to serve as an organization's ethical anchor.

On the heels of the Enron debacle and other dramatic national scandals, Fyock says, "We need ethics and a moral compass more than we've ever needed it before." HR is viewed as the "key communicator of ethics and standards that organizations adopt," she says.

With that in mind, CEOs have expressed growing interest in HR moving toward enabling business performance, these experts say. They expect HR to contribute to growing the business. From an ethical standpoint, more and more organizations have become serious about being values-driven. The focus now revolves around aligning the performance of individuals to the organization's value system.

The revival of ethics concerns has sparked a "renewed importance in organizations around determining the core values of the enterprise," Rucci says. It's become essential that organizations hold employees accountable for their performance against the core values of the business. HR can have a "huge positive influence" in that endeavor, he says. It's up to HR to communicate ethical standards and behaviors to the workforce.

Staffing Challenges

When she was featured in HRE's September 1987 issue, Fyock, then director of field human resources for Louisville, Ky.-based Kentucky Fried Chicken, had developed a fresh approach to recruiting. She targeted nontraditional labor markets, including homemakers and older workers, to lure employees to the fast-food industry.

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Fyock admits the topic of recruitment and sourcing candidates has been a "roller coaster" over the past 20 years. Focus on retention has been up and down. Now, she says, the focus has shifted from retention to employee engagement.

Just in the last year or two, staffing issues have "started to heat up," Fyock says. HR executives are interested now because they're faced with the problem and "they know they're not prepared."

As a result, CEOs are continuing to ask HR executives what the talent pipeline looks like for all types of jobs. CEOs maintain a keen interest in reviewing the leadership pipeline, identifying leaders to run the company and developing talent. That's what it's all about, Iorfida says: "It's talent, talent, talent."

The issue of succession planning has also become a huge item on the agenda for CEOs, HR executives and boards of directors.

"Many companies are struggling with the fact that they don't have the bench strength they may have thought they had in the past," says Boren.

She finds many successful baby boomers have amassed the nest eggs they need and have opted to retire -- some even earlier than expected. "There's some scrambling going on right now," she says. "It's hard to get that many people ready for those levels of jobs all at once."

Although succession planning has been going on for years, these sources agree it's now become the No. 1 consideration in board rooms in all major organizations. The question remains: Where's the next generation of talent going to come from?

With baby boomers retiring and taking their resident knowledge with them, the challenge for HR has become one of making boomers' work interesting and agreeable enough to keep them on as long as possible. The answer lies in crafting innovative strategies to entice them to stay. Whether it means accommodating part-time positions, flex-time schedules, contract workers or full-time workers, the advantage is obvious.

"Smart companies are going to be smart about keeping a string on their talented employees," says Jennings.

Some of the sources for this story are a little less concerned about a mass exodus of boomers. Although Denton acknowledges the gradual retirement of baby boomers, he remains confident that plenty of "bright people" are waiting in the wings to take their places. "I don't really see it as a crisis," he says.

Iorfida expects baby boomers will make themselves available, either part-time or in other ways that fit into a scaled-back schedule. "It's important to keep boomers engaged," she says. "Their careers have been their lives."

HR and the C-Suite

Over the years, the relationship between HR and the C-suite has become increasingly strong, these HR experts agree. In the past 10 years, it's become far more common to see the HR professional as part of that top leadership team.

HR executives have become far more visible, sought for their competence and expertise, and have been successfully integrated into the executive team. This integration has been embraced and, over time, Ziskin finds, it's become "much more intimate." Communications going on between the board and senior-level executives have become significantly more transparent, he says.

In 2007, HR executives also enjoy an unprecedented ability to participate and contribute at organizations' highest levels. "Today," says Boren, "the board is very interested in succession planning and executive compensation and a number of issues that HR executives have primary accountability for."

The elements of executive compensation involve significant complexity, with many facets to consider, she says: "Executive compensation is much more visible and companies are held publicly accountable for not only the way they structure it, but for the overall level of compensation."

Many organizations now tie company performance to compensation for executives, with clearly articulated goals and accountability measures to satisfy them. Where executive compensation is concerned, HR executives involved must be comfortable with interaction at the board level. Equally critical to the process is an HR executive willing and able to influence the discussions.

Executive compensation over the recent past has developed into a corporate dilemma, the sources agree. "I think we've gone from 'What is it going to take to recruit and/or retain the best CEO and the best CFO?' to 'Let's do what is fair and what is reasonable,' " says Iorfida. Boards, she adds, continue to struggle with what's reasonable.

HR 20 Years Hence

HR is destined to become more complex, with executives pressured to address succession planning and global issues. The global labor market "translates to HR people who will have to become more and more global in their thinking and understanding of various cultures," says Jennings.

Visionary HR executives need to focus on ways to improve policies and procedures with respect to employees and their productivity. The HR function, more than ever, will be that of facilitator.

Technology and the advancements the future undoubtedly holds will profoundly impact HR. Denton envisions a workplace in which voice-activated software will handle routine tasks. "Keyboards are going to be a thing of the past. Computers will be married to televisions. You're going to have distance learning in a huge way," he says.

He also believes telecommuting will become pervasive throughout the workforce. "We're on the threshold of a great deal of what's being done at the office being done at home," he says. Technological tools will facilitate that change. "There's no need for many office functions to be done on the company premises," says Denton.

Removal of a significant portion of the workforce from organizations' buildings and office space will create new challenges for HR professionals of the future, according to Denton. Time clocks and supervisors will go the way of the dinosaurs and workers will be paid at a daily, weekly or annual rate based on completed work.

"Control of employee behavior will diminish," Denton says. "It's going to revolutionize the way this country operates and the way corporations in this country operate."

Successful companies in the future, Ziskin adds, will be those with "winning human capital strategy, organizational capability and culture."

"Nearly all [HR] issues ... have some connection to talent, an organization's ability to change, culture and rapidly improving the operating effectiveness of a business," he says. The HR function is "right in the sweet spot" of all those areas.

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