HR's Epic Journey
As Human Resource Executive® celebrates its 30th anniversary, CHROs weigh in on the most important HR developments over the past three decades and what major new changes loom on the horizon.
By Will Bunch
Johnna Torsone, longtime executive vice president and chief human resources officer at the business-services company Pitney Bowes, can look back on her career and see how it mirrors the radical changes in HR over the last three decades.
The Albany Law School grad spent the first half of her career as a labor and employment attorney, joining the Stamford, Conn.-based firm in 1990 and working on labor-law and diversity issues before becoming its chief human resource officer in 2003. Like her own career, the focus of HR has become less legalistic and bogged down by rote functions such as payroll and benefits administration, and more about building a winning culture at Pitney Bowes and developing its top executives.
"The transformation of human resources from more or less an administrative, strictly employee-relations function to more of a strategic business partner" is the most dramatic change that Torsone says she's witnessed in her 27 years dealing with employment and HR issues at Pitney Bowes.
Torsone is one of the HR executives who's held a front-row seat for 30 years of dramatic transitions in their field. It has been an era when sweeping changes in the wider American workplace -- with the rise of a service economy and booming high-tech and financial sectors -- revolutionized the art and the science of human resources. Gone forever is the notion of HR as a second-tier administrative function, tied to negotiated labor contracts or tasked with complying with a raft of federal equal-opportunity mandates. In its place: The 21st century human resource executive, who works closely with the CEO in developing key business strategies that affect the firm's bottom line while creating a culture to retain the most talented workers and attract promising millennials to a vibrant, socially committed firm.
"It's been gradual, but I do think there's been a much stronger realization over the course of that time frame that HR is a critical function to a business," says John Murabito, executive vice president for human resources and services at Cigna, the Philadelphia-based health insurance giant, noting the strong C-suite awareness of a concept that barely existed in the late 1980s: "human capital."
Yesterday and Today
To help celebrate the 30-year anniversary of Human Resource Executive®, we talked to a half-dozen leaders in the HR field to pick their brains about what have been the most important developments in people management over the past 30 years, what major new changes loom on the horizon, and what are some of the skills that will be required for the HR executive of the future.
What's clear from these conversations is that the modern history of managing human relations is, in some ways, deeply intertwined with the broader tale of how business and the workplace have evolved during those same years -- as the U.S. economy transitioned from its sturdy manufacturing roots to one based more on innovation and service.
Darryl Robinson, executive vice president and chief human resource officer at Dignity Health, the San Francisco-based hospital system, has watched that epic transition since he graduated in 1981 with a labor relations degree from Michigan State and took a job in Kansas City with the steelmaker then known as Armco, which had a strong union and a bustling factory floor. Some 36 years later, he says he can still see the bright flash of molten steel.
The younger Robinson was eager to negotiate labor contracts and got the opportunity at Armco and his next job at Mead Paper, where he says he helped strike 18 different labor deals. Although he still deals with unionized nurses in his current post at Dignity Health, the HR veteran says the job now involves less negotiation and more creativity. "In the last 10 years the focus has been on strategy . . . how do you take an organization that is not performing well and help it to be great."
For many HR executives, the downsizing of manufacturing and the transition of the workforce became a significant storyline as the millennium turned. At Pitney Bowes, Torsone says executives saw early on that many of its Connecticut factory jobs would vanish, and HR was tasked with developing a transition program that would train blue-collar employees in computers or other skills, as well as English language classes. Says Torsone: "We knew this work was going [away], so we were very transparent about why this was happening -- and we trained them."
In 1987, the year that HRE first published, personal computers were just gaining a toehold, and widespread use of the Internet was still a decade away. For HR leaders, the sweeping change in technology has been a defining feature of the last 30 years, drastically changing the workflow within HR.
"I think technology has had a massive, positive influence on our business," says Pam Kimmet, CHRO at Dublin, Ohio-based Cardinal Health. She previously held the top HR positions at Coca-Cola Enterprises, Bear Stearns and Lucent Technologies, after stints at Citigroup and General Motors.
When she first joined the profession, it mostly involved "people administration" -- work that, as Kimmet recalls, took "a lot of arms and legs" to get done. But the ability to perform once-complex tasks such as benefits management with the help of technology, she says, has played a key role in liberating HR executives so they could now focus more on business strategy and getting the most out of the workforce. With the increasing ability to move key tasks such as employee training online, or use social media to connect and motivate employees, the importance of technology has only accelerated in recent years.
"At my company, we have new software that's a search engine for learning on the Internet," says Michael D'Ambrose, senior vice president and CHRO at Archer Daniels Midland, the Chicago-based agribusiness, who marveled at the tool's ability to instantly connect workers with TED talks, white papers and other learning materials in a few nanoseconds.
Technology has also helped fuel another key development in HR over the last three decades: Dealing with rapid globalization. HR leaders -- particularly at large corporations -- say the modern multinational workforce has hastened the need to develop a companywide culture and norms that can cross the International Date Line. D'Ambrose says that's certainly the case at ADM, whose 32,000 employees work in 160 different nations. He explained that ADM strives to "articulate the difference that we make . . . that we feed the world."
Evangelists for Diversity
Both globalization and the rapid pace of change has made most top HR leaders evangelists for diversity in recent years, believing that a rich mix of backgrounds and experiences is critical for companies to succeed in the marketplace. In the '80s and '90s, a key focus in most HR departments was simply following the new laws and mandates on equal opportunity, affirmative action and related workplace issues. Murabito hailed the importance in more recent years of diversity -- real diversity that enables companies to have a more effective workforce.
HR leaders say the changing workforce helped fuel the surge in programs to promote work-life balance -- an agenda fueled in part, although not exclusively, by the rising numbers of women in the labor force. "I still remember when we were asked if we should have on-site day care," recalls Torsone, who says such amenities are now commonplace as HR leaders grapple with other balance-related issues, such as needing time and flexibility to care for aging parents. "We've trained our managers to be smart about dealing with these changes."
Several of the interviewees cited a growing emphasis on developing top talent, especially for the C-suite. The latter years of the 20th century also brought the rise of the so-called "celebrity CEO" like General Electric's Jack Welch, tied to a growing sense that strong executives were critical to driving higher profits and, in turn, higher stock prices. For CHROs, this new emphasis on leadership meant a focus on talent development that also tended to bring HR executives closer to the center of power.
Kimmet notes that after business profits had flat-lined in the '70s, the Wall Street boom of the '80s and '90s caused shareholders and CEOs to look more closely at ways that HR programs could help push profit margins higher. In these more dynamic modern corporations, she says "people management had a huge critical ability to control the growth of spending and drive more returns."
Mark Berry, vice president for human resources at Covington, La.-based CGB Enterprises, a grain and transportation firm, says the biggest boost for the HR profession has been the ability to use data to show the specific effects of various policies or programs on the bottom line. He recalled a moment at a prior employer, Conagra Brands, when he ran into the firm's CEO at a neighborhood supermarket and mentioned that the initiative he was working on could boost earnings by 7 cents a share. "Suddenly," he recalls with a laugh, "I have the interest of the CEO."
Yet Berry noted that even today, some major companies are in the early stages of figuring out how to best use people-management strategies to drive business results. "The most important development to me is the move to more evidence-based HR policies and programs," he says. Since arriving at CGB a couple of years ago, Berry has increased the frequency of employee surveys but targeted them to solve problems such as a high turnover rate. Those efforts, he says, showed that people were leaving because they perceived a lack of development opportunities, an issue the firm addressed with better training and by targeting the jobs most prone to turnover.
"I think CEOs and boards of directors have become more cognizant of . . . the impact of talent and human capital, and there's a recognition that the HR function has a lot to do with that," says Murabito. "In a service-based economy, people and talent engagement has become more critical to business success than the other costs of goods."
Murabito also notes that as HR has become more strategic and less of an administrative function, a science of people management has emerged. He says he's noticed a stronger fellowship of CHROs who talk with each other about the latest trends, often through conventions and other activities sponsored by groups such as the National Academy of Human Resources or the HR Policy Association. "These associations have helped collectively shape how we, as HR executives, contribute to the function, by sharing best practices."
Looking to the Future
As these HR executives look toward the future, their views of what will happen in the field over the next 30 years are very much shaped by what they see in today's workforce. Right now, the American labor pool is marked by generational change -- as the so-called millennials under the age of 35 become the largest bloc in the workplace -- and experts say this transition is powering new attitudes about the nature of work. The most experienced HR professionals say that when they started out, older workers who'd been raised in the Great Depression and World War II worried more about pay and economic concerns, while today's younger employees are more focused on their workplace experiences and on making a difference in society.
"The conversation about greater social awareness -- about planetary resources and the environment, about social injustice and inequality, about treating people with respect and pay equity -- is a growing drumbeat," Kimmet says. What's more, HR executives are still working through ever-changing ideas about work-life balance. The emphasis on flex time or telecommuting from home has to some degree given way to an emphasis on a workplace that's focused on a shared and fulfilling employee experience.
HR leaders say that many of the changes already afoot -- such as moving away from annual employee ratings to emphasize more personal coaching -- share a desire to better meet the more individualized needs of the modern employee, with the goal of retaining workers and making them more productive.
"The biggest issue over the next 30 years will be how to make a better human connection," says Robinson, who spoke of the need to customize training programs and collect feedback from supervisors in order to meet the goals of the individual worker.
The irony is that a major long-term worry for many HR executives involves the accelerating pace of automation and the increasing capabilities of artificial intelligence to perform work now being done by humans. For Torsone, the challenge of AI is similar to what Pitney Bowes faced when it downsized its Connecticut manufacturing, but with possibly larger ramifications. "We're going to have to think about deconstructing work, and how people will be integrated with artificial intelligence," she says.
Although it's almost impossible to predict exactly how technology will alter the workplace over the next 30 years, the HR executives interviewed for this article mostly agree that the skill the CHROs of the future will need most is business acumen.
"Business acumen sets the table," says Berry, making the case that the CHRO of the present, not to mention the future, "really needs to be a business leader," with training and possibly experience in all facets of the company, such as sales and finance. That much seems clear: While it's hard to imagine which gadgets and robots will revolutionize the workplace by 2047, the experts agree that the concept of the modern HR executive as a key business partner is here for good.