The Future of Human Resources
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June 11, 2004
June 11, 2004
A number of key factors promise to influence the future of human resources. They include demographics, technology, workforce analysis, corporate culture, globalization, outsourcing, and corporate strategy.
The impact of demographic trends was recently highlighted in a major study from the RAND Corp. called The 21st Century at Work, which focuses on the future of the U.S. workforce and workplace. One prominent demographic trend is the slowing of U.S. annual workforce growth from 2.6% in the 1970s to 1.1% in the 1990s and to just 0.4% by 2010.
The study suggests that in a tighter labor market, employers will become more eager to accommodate those who might otherwise leave the workforce, such as people with disabilities, people struggling to balance work and family obligations, and potential retirees.
The RAND study also points to the impact of technology, which will not only increase worker mobility but will cause companies to become more decentralized and specialized. Such companies will increasingly customize work situations to the needs of employees. Although there are positive aspects to this trend, it may make it “more difficult for HR professionals to establish policies and procedures that apply uniformly across the organization,” reports HR Magazine.
Some experts predict that technology will also impact the HR function itself to such a degree that it “will become, at least in part, a desktop icon rather than a place,” reports Human Resource magazine. That is, technology will allow for the creation of HR portals that serve the HR needs of employees and line managers alike.
As technology permeates the HR function and the workforce generally, “data will become increasingly easy to collect and manage, allowing HR professionals to analyze trends and issues, and communicate them in ways far more appealing to business professionals – in hard data, coherent analysis and rational argument,” says Tim Ovington of Watson Wyatt in Human Resource.
Even now, data from HR metrics is attracting the interest of finance executives, many of whom want to get more involved in “designing HR metrics, adding a financial perspective to HR decisions, and helping to link HR policy to corporate strategy,” according to a report from CFO Research Services and Mercer HR Consulting. HRfocus magazine suggests this trend could result in future turf battles between HR and finance.
Other experts believe HR professionals will increasingly focus on organizational design. Linda Holbeche, director of research and strategy at the UK’s Roffey Park Institute, believes that by 2010 HR will be more visible in areas such as leadership development, ethics, and high-performance corporate cultures.
Globalization is another factor that will influence both the workforce and the HR function. It allows capital, labor and information to flow more freely among nations, causing sometimes painful job losses and insecurity. It also requires that employees learn new skills to remain viable in a global workforce.
For HR professionals, the implications of globalization are legion. They’ll be asked to help their companies work through restructurings, cross-border mergers and the like, and employees will ask HR’s help in keeping them as employable as possible in a dynamic world. HR will also have to cope with all the complexities of a multinational work environment.
“You’ll need to keep abreast of key employment legislation in Europe, Asia or Latin America; track cultural issues, demographic trends and social policy developments in foreign regions; and more than likely, become fluent in another language,” HR Magazine recently reported. And failing this, HR professionals will suffer job insecurity themselves, since various HR tasks can be sent to nations with lower-cost labor.
HR outsourcing in general is often viewed as a threat to human resources, especially in terms of reducing the number of in-house HR staff. But its primary influence may be to change HR’s responsibilities. “If carried out to its full potential, HR outsourcing may indeed leave HR departments pared down and with altogether different roles: that of making strategic decisions and ensuring those decisions are carried out by the stable of vendors, consultants and service providers,” notes Canadian HR Reporter magazine.
To do this effectively, HR professionals will need to be well schooled in areas such as project management, business partnering, and strategic planning. They’ll also need a solid understanding of financial and management issues, while retaining enough detailed knowledge of HR to manage vendors well.
In short, it looks as if the future of the HR function will be complex, challenging, competitive, and sometimes political. Most likely, it will not be for the faint of heart.
For more on RAND’s The 21st Century at Work study, go to
http://www.rand.org/publications/MG/MG164/ or to
http://www.rand.org/publications/RB/RB5070/
To see HR Magazine’s “Future Workplaces Will Require Greater HR Adaptability,” go to the SHRM Web site at
http://www.shrm.org/hrmagazine/articles/0504/0504briefs.asp
Documents used in the preparation of this TrendWatcher include:
Beaumont, Richard A. “2020 Foresight: What the HR World May Look Like Then.” Journal of Organizational Excellence. ABI/INFORM Global. Winter 2003, pp. 3-10.
“Human Resources in the 21st Century.” Workspan. ProQuest. January 2004, p. 56.
Jensen, Ed, and Robert H. Spencer. “Transforming the HR Function.” Utility Week. ProQuest. April 2004, p. 35.
Karoly, Lynn A. and Constantijn W. A. Panis. The 21st Century at Work: Forces Shaping the Future Workforce and Workplace in the United States. Santa Monica, CA: RAND Labor and Population, 2004.
Maloy, T.K. “RAND Study Shows Shifting Workplace.” Washington Times, Internet [www.washingtontimes.com], February 13, 2004.
Meisinger, Susan. “Going Global: A Smart Move for HR Professionals.” HR Magazine. ProQuest. March 2004, p. 6.
Merriden, Trevor. “The Future Is Daunting, but Very, Very Exciting.” Human Resources. ProQuest. January 2004, p. 4.
Millar, Michael. “Dramatic Changes in Store for HR in Outsourced Future.” Personnel Today. ProQuest. April 13, 2004, p. 3.
Mirza, Patrick. “Future Workplaces Will Require Greater HR Adaptability.” HR Magazine. ProQuest. May 2004, p. 12.
Revenbark, Leigh. “Human Resources in the 21st Century.” HR Magazine. ProQuest. March 2004, p. 128.
Siscovick, Ilene. “HR Priorities Shift as Economy Improves: A New Analysis Exclusive to the International Foundation.” Employee Benefits Journal. ProQuest. June 2004, p. 42.
“The Top Issues for 2004.” HRfocus. ProQuest. January 2004, p. 1.
Towers Perrin. HR on the Web: The Investment Is Paying Off – 2003 Service Delivery Survey Report. Internet [towersperrin.com]. 2003.
Vu, Uyen. “Outsourcing Calls for New HR Skills.” Canadian HR Reporter. ProQuest. March 22, 2004, p. 1.
Zneimer, Andy and Trevor Merriden. “...And What Then, in 2010?” Human Resources. ProQuest. January 2004, p. 38.
The impact of demographic trends was recently highlighted in a major study from the RAND Corp. called The 21st Century at Work, which focuses on the future of the U.S. workforce and workplace. One prominent demographic trend is the slowing of U.S. annual workforce growth from 2.6% in the 1970s to 1.1% in the 1990s and to just 0.4% by 2010.
The study suggests that in a tighter labor market, employers will become more eager to accommodate those who might otherwise leave the workforce, such as people with disabilities, people struggling to balance work and family obligations, and potential retirees.
The RAND study also points to the impact of technology, which will not only increase worker mobility but will cause companies to become more decentralized and specialized. Such companies will increasingly customize work situations to the needs of employees. Although there are positive aspects to this trend, it may make it “more difficult for HR professionals to establish policies and procedures that apply uniformly across the organization,” reports HR Magazine.
Some experts predict that technology will also impact the HR function itself to such a degree that it “will become, at least in part, a desktop icon rather than a place,” reports Human Resource magazine. That is, technology will allow for the creation of HR portals that serve the HR needs of employees and line managers alike.
As technology permeates the HR function and the workforce generally, “data will become increasingly easy to collect and manage, allowing HR professionals to analyze trends and issues, and communicate them in ways far more appealing to business professionals – in hard data, coherent analysis and rational argument,” says Tim Ovington of Watson Wyatt in Human Resource.
Even now, data from HR metrics is attracting the interest of finance executives, many of whom want to get more involved in “designing HR metrics, adding a financial perspective to HR decisions, and helping to link HR policy to corporate strategy,” according to a report from CFO Research Services and Mercer HR Consulting. HRfocus magazine suggests this trend could result in future turf battles between HR and finance.
Other experts believe HR professionals will increasingly focus on organizational design. Linda Holbeche, director of research and strategy at the UK’s Roffey Park Institute, believes that by 2010 HR will be more visible in areas such as leadership development, ethics, and high-performance corporate cultures.
Globalization is another factor that will influence both the workforce and the HR function. It allows capital, labor and information to flow more freely among nations, causing sometimes painful job losses and insecurity. It also requires that employees learn new skills to remain viable in a global workforce.
For HR professionals, the implications of globalization are legion. They’ll be asked to help their companies work through restructurings, cross-border mergers and the like, and employees will ask HR’s help in keeping them as employable as possible in a dynamic world. HR will also have to cope with all the complexities of a multinational work environment.
“You’ll need to keep abreast of key employment legislation in Europe, Asia or Latin America; track cultural issues, demographic trends and social policy developments in foreign regions; and more than likely, become fluent in another language,” HR Magazine recently reported. And failing this, HR professionals will suffer job insecurity themselves, since various HR tasks can be sent to nations with lower-cost labor.
HR outsourcing in general is often viewed as a threat to human resources, especially in terms of reducing the number of in-house HR staff. But its primary influence may be to change HR’s responsibilities. “If carried out to its full potential, HR outsourcing may indeed leave HR departments pared down and with altogether different roles: that of making strategic decisions and ensuring those decisions are carried out by the stable of vendors, consultants and service providers,” notes Canadian HR Reporter magazine.
To do this effectively, HR professionals will need to be well schooled in areas such as project management, business partnering, and strategic planning. They’ll also need a solid understanding of financial and management issues, while retaining enough detailed knowledge of HR to manage vendors well.
In short, it looks as if the future of the HR function will be complex, challenging, competitive, and sometimes political. Most likely, it will not be for the faint of heart.
For more on RAND’s The 21st Century at Work study, go to
http://www.rand.org/publications/MG/MG164/ or to
http://www.rand.org/publications/RB/RB5070/
To see HR Magazine’s “Future Workplaces Will Require Greater HR Adaptability,” go to the SHRM Web site at
http://www.shrm.org/hrmagazine/articles/0504/0504briefs.asp
Documents used in the preparation of this TrendWatcher include:
Beaumont, Richard A. “2020 Foresight: What the HR World May Look Like Then.” Journal of Organizational Excellence. ABI/INFORM Global. Winter 2003, pp. 3-10.
“Human Resources in the 21st Century.” Workspan. ProQuest. January 2004, p. 56.
Jensen, Ed, and Robert H. Spencer. “Transforming the HR Function.” Utility Week. ProQuest. April 2004, p. 35.
Karoly, Lynn A. and Constantijn W. A. Panis. The 21st Century at Work: Forces Shaping the Future Workforce and Workplace in the United States. Santa Monica, CA: RAND Labor and Population, 2004.
Maloy, T.K. “RAND Study Shows Shifting Workplace.” Washington Times, Internet [www.washingtontimes.com], February 13, 2004.
Meisinger, Susan. “Going Global: A Smart Move for HR Professionals.” HR Magazine. ProQuest. March 2004, p. 6.
Merriden, Trevor. “The Future Is Daunting, but Very, Very Exciting.” Human Resources. ProQuest. January 2004, p. 4.
Millar, Michael. “Dramatic Changes in Store for HR in Outsourced Future.” Personnel Today. ProQuest. April 13, 2004, p. 3.
Mirza, Patrick. “Future Workplaces Will Require Greater HR Adaptability.” HR Magazine. ProQuest. May 2004, p. 12.
Revenbark, Leigh. “Human Resources in the 21st Century.” HR Magazine. ProQuest. March 2004, p. 128.
Siscovick, Ilene. “HR Priorities Shift as Economy Improves: A New Analysis Exclusive to the International Foundation.” Employee Benefits Journal. ProQuest. June 2004, p. 42.
“The Top Issues for 2004.” HRfocus. ProQuest. January 2004, p. 1.
Towers Perrin. HR on the Web: The Investment Is Paying Off – 2003 Service Delivery Survey Report. Internet [towersperrin.com]. 2003.
Vu, Uyen. “Outsourcing Calls for New HR Skills.” Canadian HR Reporter. ProQuest. March 22, 2004, p. 1.
Zneimer, Andy and Trevor Merriden. “...And What Then, in 2010?” Human Resources. ProQuest. January 2004, p. 38.
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