The human resources department is a section of the organization staffed by people responsible for managing human resources. Such people are responsible for developing and managing human resources, policies and practices for the organization’s benefit. The people in this department are referred to as human resources professionals. They often possess a human resources degree, diploma and additional certification necessary to support their area of specialty.
The human resources department is responsible for various areas of human resources, such as recruitment and selection, training and development, compensation and benefits, employee relations and employee wellness, among other things. The scope of what the human resources department is responsible for can vary by sector and sometimes from organization to organization. The organization’s headcount and the complexity of the business model can impact how the human resources department is structured.
What is the role of the human resources department?
Phil (2013) reviews the evolution of HRM, highlighting its transformation from a maintenance function to a source of sustained competitive advantage for organizations in a global economy. Human Resource Management (HRM) has undergone significant changes in the last century, especially in the past two decades. It has experienced a major transformation in its structure and purpose. This evolution has been driven by various internal and external factors that have shaped HRM into a function that goes beyond mere maintenance tasks. Today, many experts and professionals consider HRM a crucial factor for organizations to gain a competitive edge in the global economy.
Over the years, HR has undergone significant transformations. According to Gartner, the focus has shifted from solely hiring and compliance to prioritizing employee experience and retention. This change reflects the growing recognition of creating a positive work environment that fosters employee satisfaction and loyalty. HR has embraced digital transformation by adopting the latest technologies to streamline processes and enhance efficiency. Another notable shift is the increased emphasis on diversity, equity, and inclusion (DEI) as organizations recognize the value of fostering diverse and inclusive workplaces. Lastly, HR has also evolved to support leaders and managers better, recognizing their crucial role in driving organizational success. The rise of flexible work environments has become a key aspect of HR practices, acknowledging employees’ changing needs and preferences. These changes collectively reflect the dynamic nature of HR and its commitment to adapting to evolving workplace trends.
In the face of prevailing economic uncertainties, cost pressures, an exhausted workforce, and evolving work dynamics, the future focus of HR professionals will centre around several key areas. Firstly, there will be a need to improve operational capabilities and enhance the strategic impact of HR to increase overall efficiency within the function. Secondly, HR will play a crucial role in creating and implementing a more human-centric work design that leverages the advantages of a hybrid workforce. This approach will prioritize employee well-being, engagement, and productivity. HR professionals must provide support and training to bridge the widening skills gap among managers, ensuring they have the necessary tools to lead effectively in changing environments.
There will be an increased emphasis on employee mental health, recognizing its impact on overall well-being and performance. Lastly, HR must confront data ethics concerns associated with new HR technologies, ensuring that employee privacy and ethical considerations are upheld. These focus areas reflect the evolving work landscape and the critical role that HR professionals will play in navigating these challenges and driving organizational success.
An article on the World Economic Forum website summarises it all, “HR faces existential threats in a world of increasingly intangible labor performed in a digital realm by workers whose motivations extend beyond monetizing their labor, into passion and personal fulfillment”.
Nabil Dabal Executive Director, HR Department, Saudi Aramco says “As we move deeper into the Fourth Industrial Revolution (4IR), we clearly see HR changing to reflect our role as a crucial business driver. Our success in the future of work will depend heavily on our ability to effectively prepare our workforce – by fostering a culture of reskilling, upskilling and lifelong learning.”
Leena Nair, Chief HR Officer of Unilever, had this to say about the role of HR. “The digital revolution is a human revolution. While new technologies are what’s driving the Fourth Industrial Revolution, ultimately, it is people who will bring it to life in businesses. As HR Leaders, we play a pivotal role in helping to lead our organizations to a new future of work - one that has the potential to be more inclusive, more purposeful and one which can deliver more positive impact to our people and our consumers. It is for this reason why I think there’s no better time to be in HR. This framework is an important tool to help accelerate the redefinition of our function and profession, and I look forward to seeing how it is leveraged by business leaders globally.”
The World Economic Forum, in a paper titled “HR4.0: Shaping People Strategies in the Fourth Industrial Revolution” lays bare the role of the human resources department as we go into the future. I summarise some of the key insights from this paper here. In today’s rapidly changing business landscape, organizations recognize the need for comprehensive approaches to navigate the future of work. As a result, CEOs are increasingly relying on the human resources function to adapt and meet evolving demands swiftly. HR professionals now find themselves at the forefront of supporting their organizations and leaders in embracing technological advancements, fostering innovation, facilitating new work models, and ultimately attracting, retaining, and nurturing the workforce of tomorrow. The white paper lists six imperatives:
- Developing New Leadership Capabilities for the 4IR: In the Fourth Industrial Revolution (4IR) era, organizations adopt to distributed business models, requiring leaders to lead from the edge. To succeed, leaders must embrace technology, foster a new vision of organizational culture, and develop innovative people strategies for the future of work.
- Managing the Integration of Technology in the Workplace: Work is evolving. HR professionals are crucial in partnering with CEOs and C-suite leaders to find the optimal balance between the human workforce and automation. By effectively integrating technology, organizations can ensure a positive impact on the future of work.
- Enhancing the Employee Experience: The complexity of the modern workforce and the use of technology necessitate a shift in how work is experienced. HR plays a vital role in defining, measuring, and enabling a meaningful employee experience in the context of the 4IR.
- Building an Agile and Personalized Learning Culture: To thrive in the 4IR, organizations must cultivate an agile and personalized learning culture. This involves promoting continuous learning opportunities, leveraging technology for personalized development experiences, and adapting to rapidly changing skill requirements.
- Embracing Diversity and Inclusion: In an increasingly diverse and interconnected world, organizations must prioritize diversity and inclusion as key drivers of success. HR should champion initiatives that foster a culture of inclusivity, promote diverse perspectives, and create equitable opportunities for all employees.
- Nurturing Ethical Leadership: As technology advances in the 4IR, ethical leadership becomes even more critical. HR should prioritize nurturing ethical leaders who navigate complex ethical dilemmas, uphold integrity, and make responsible decisions that align with organizational values.
The above priorities for the human resources department ensure that the human resources department adds value to the organization. This is a shift from the traditional human resources roles where the focus has been on routine functions of recruitment, training, employee relations and compensation.
What is an HR structure?
An HR structure is how the human resources function is structured to allow them to deliver value to the organization. The HR structure is often headed by the Human Resources Director in big organizations. The equivalent title in similar organizations is called the Chief People Officer. In some organizations, the person heading the human resources department is called the Human Resources Manager. Anyone heading the human resources department in a sizeable organization has the mandate to bring the best value from the organization’s workforce by crafting human resources practices and policies.
The Human Resources Department Structure
Some research papers collectively suggest that an HR structure is a framework within a human resources department that divides the decision-making functions within HR into specific groups with distinct job functions. Stríteský 2013 discusses the new HR Business Partner model trend, which reflects modern expectations arising from the new roles of human resources managers in organizations. Ulrich 2008 argues that HR departments should operate as a business within a business and lays out five roles and responsibilities of HR that respond to the organization model: service centres, corporate, centres of expertise, embedded HR, and operational HR. Hird 2010 argues that HR should start with the organization’s business model and reverse engineer what this means for the most appropriate structure. Wang-Cowham 2008 examines the issue of HR structures and the transfer of HR knowledge to discover whether and how HR structure facilitates the transfer of HR knowledge between subsidiaries of an MNC in China. Huang (2000) found that effective firms adopt a highly effective approach to managing their human resources, including planning, staffing, appraisal, compensation, and training and development. Overall, the papers suggest that effective HR structures are tailored to the organization’s business model and context and effectively manage human resources.
The modern-day title for a person heading the HR department is Chief People Officer. A chief people officer (CPO) is responsible for managing a company’s human resources (HR) department and ensuring effective practices and policies related to hiring, staff development, performance, and retention. They play a crucial role in shaping the company’s culture and fostering a positive work environment.
The most common skills associated with a CPO include culture change, HR strategy, and strategic human resources leadership. These skills are essential for driving organizational growth, managing talent effectively, and aligning HR initiatives with the company’s strategic objectives. CPOs are commonly found in professional, technology, media, and financial services. These sectors often require strong HR leadership.
On gender distribution, CPO roles are predominantly held by women, with 77% female representation compared to 23% male representation. However, it is important to note that gender diversity in this field is gradually increasing. The median years of prior experience for CPOs is 6.8 years. This indicates that professionals in this role typically have substantial experience in HR or related fields before assuming the position of a CPO.
When properly structured, The human resources department can add value to any organization that values good human resources practices. The structure of the human resources department depends on the nature of the business and the size of the workforce. The human resources department’s mandate depends on the organization’s long strategic goals.