1.3 HR’s Role in the 21st Century

As discussed earlier, although the HR staff still performs many of the traditional HR functions of attracting, selecting, retaining, and motivating employees, the role of HR continues to evolve. In the 21st century, for example, this evolution and the strategic mission of HR is more important than ever. Today, employees can provide a non-replicable competitive advantage to the firm if the organization knows how to use employee skills and talent. The HR function helps managers know how to use these resources through strategic hiring, employee development, appropriate use of rewards, and assistance in managing the constant changes and cycles that organizations go through. HR can help the organization in a number of ways, including boosting employee productivity and preparing the organization for change. Over the last 15 years, 21st-century HR tactics have helped many organizations build employee commitment and morale and, at the same time, implement strategic direction within the organization.

Strategic Nature of HR

Organizations are increasingly linking their human resource management function to the organization's strategy. Strategy refers to how an organization is going to compete. In other words, strategy describes the process by which an organization decides on which products or services to market and sell, which industries to enter, and how the organization is going to reach its desired goals in the marketplace. A strategy, for example, will inform employees about many organizational concerns including short- vs. long-term focus, quality vs. quantity, high risk vs. low risk, flexibility vs. rigidity, independent vs. dependent behavior, and conformity vs. autonomy. These characteristics, although partially constrained by the organization's technology and structure, affect the specific skills, knowledge, and abilities that employees need to perform their jobs.

For example, if a company competes by making their products and services very different from those of their competitors, it may be important for HR to emphasize hiring and selecting employees with creativity and innovation; the company may have a larger research and development department than companies that compete by keeping costs low. The time to fill a position (from application to hire) may be impacted by a longer selection process to carefully choose these creative individuals, or the organization may need to build a stronger pipeline of leads to keep the time to hire reasonably low.

Although HRM is extremely important to the strategic mission of the organization, management has not always viewed HR this way. Historically, this was partially due to the limited role that HR often played.  For example, in the 1970s, while this perception shift of HRM was taking place, one director wrote, "To many individuals, including chief executives, the people who worked in 'personnel' appeared to be a bunch of drones whose apparent missions in life were to create paperwork, recruit secretaries who couldn't type, and send around memos whose impertinence was exceeded only by their irrelevance" (H.E. Meyer, "Personnel Directors are Becoming the New Corporate Heroes," Fortune 113: 2).

Today, for reasons already described, HR departments are vital to the organization. Research suggests that more and more firms are recognizing the impact that HRM can have on the bottom-line strategic goals of the organization.  Consequently, the HR department is now a key corporate division within most firms and the executives who are in charge of these departments are as interested in profits as any other executive.

Trends Influencing the World of Work

Six major trends have been identified that represent the major events that influenced the growth and importance of HRM in society and in the world of work:

1. Increased competition

2. The costs and benefits associated with HR utilization

3. Productivity changes (resulting from changes in technology, capital investment, the 2008-2014 recession, capital utilization, outsourcing, and government policies)

4. The increasing pace and complexity of social, cultural, legal, demographic, and educational changes

5. The symptoms of dysfunction in the workplace

6. Societal trends of the 21st century

The current workforce is generally becoming more knowledgeable and better informed. Consequently, employees are often the force behind many organizations' abilities to remain competitive in today's global and chaotic environment. In fact, the intellectual, social, emotional, and analytical potential of many employees today is unmatched. This potential, however, also presents a real challenge to organizations. As society becomes better informed, it also tends to become more critical, less accepting of authority, and more cynical. Many millennials entering the workforce appear to be particularly cynical about decisions made by supervisors, and correspondingly, more resistant to authority. On the other hand, older workers' attitudes may still tend to reflect earlier values of society. As such, older workers may expect employees to be more loyal to the organization and accept authority. As a result, the HR function must be able to not only manage and channel the skills of young workers, but also manage a workforce with a mixed set of values.

Rapid social change has also been accompanied by changes in the relationship between the worker and the job. Some of the terms used in descriptions of the traditional work environment are stress, worker alienation, boredom, and job dissatisfaction.  Many high-tech firms such as Intuit, Google, SAS, Genentech, and salesforce.com, in order to remain competitive, have implemented non-traditional work environments that foster openness, flexibility, and autonomy.  Many of these firms have suggested that their non-traditional work environments have created a more positive workplace, resulting in greater creativity, productivity, and profitability.

As a field of employment, HRM is becoming very attractive.  Careers in HR offer numerous job opportunities, many of which are comparable to other entry-level business career choices such as accounting and marketing. Starting salaries for HR professionals are becoming so competitive that many business schools now offer MBA degrees with a specialization in human resources.  For the most part, there is also a high level of professionalism and respect associated with the field of HRM. It should be noted that while most HR salaries are competitive, salaries and bonuses are generally higher for individuals in larger organizations with more experience and education. Similarly, salaries are often higher in large metropolitan areas. Finally, there is a wide disparity in pay levels depending on the size of the organization, the exact title and job responsibility, the type of industry, and the state in which the firm is located.