An excerpt from "The Leadership Arena"
A Brief History: History tells us that a gentleman by the name of John R. Commons, an economist back in the 1890s, was the first to coin the term Human Resources in a book he published titled "The Distribution of Wealth." However, the actual practice or the idea of human resources as a viable part of business success began with two entrepreneurs. Robert Owen (1771-1858) and Charles Babbage (1791-1871), during the industrial revolution, realized some fascinating facts. Now, I have to admit, when you first hear the following statement, it might be viewed as a "well duh" moment, almost comedic in a sense, but nevertheless, it must be told. Robert and Charles concluded that happy employees were more productive than unhappy ones. They believed that to increase productivity, it would be better to find ways to motivate employees versus threatening them in some way. [You Think? I told you it was funny.]
It wasn't until about a century later that Human Resources actually became a field of study. As time went on, and world wars played a crucial role in the development of manufacturing jobs and the widespread creation of workers' unions, the HR Department quickly became more commonplace. Its importance became even more solidified as new legislation for worker safety and fair treatment was continuously voted into law and continues even today.
Unfortunately, because of how Human Resources originated and developed in the early years, the perception some have today of HR is either not a positive one, or they simply don't realize HR's actual function and value. For example, it's not uncommon for frontline employees to actually fear being called to the HR office or even management personnel to get nervous when the Director of HR calls to inquire about an employee complaint. Additionally, some, I would say too many senior executives view the role of HR as merely transactional, something the company is "required to have" if you run a decent-sized business. Well, I hate to say this, but if you are one of those types of individuals, you may find yourself choking on the dust of your competition as they fly past you in market share. Because regardless of the type and scope of your organization, tomorrow's leaders will see Human Resources as their business partner, not just a transactional / required-by-law department.
That said, if Human Resource Management is your chosen vocation, your career success as a leader will rely in large part upon your ability to perform more strategically in your field. HR leaders of tomorrow will procure that seat at the boardroom table because they are perceived as a vital line position within the company, whose contributions have a direct and positive impact on the company's bottom line, overall growth, and success.
Glenn Llopis, a Forbes.com contributor, spoke to this very thing in an article titled, "HR Departments Must Urgently Become Human Capital Departments" back in 2018. Glenn writes, "…Human resources – in an age when the individual defines the business rather than the business defining the individual – doesn't just need a strategy for evolution. It needs a complete shift in mindset from top to bottom; from human resources to human capital and resources. The alignment HR needs to drive is between individual capabilities and what the role in an organization those capabilities can solve for. The problem is organizations try to align those capabilities with job titles and functions. The difference between the function and what it solves for is the difference between human resources and human capital. That's why the term human capital is so important. Human capital is how people contribute to growth. It is about allowing the individual to influence more. The individual needs to define the business – and thus should define the work that HR does."
I think we can all agree that today's working environment is vastly different from 20 years ago, and it's continuously evolving. For example, I remember when having a home office was a luxury only afforded to the most senior executives. Yet today, organizations are beginning to realize a "work-from-home" option, even if it's only during an emergency, might just be a necessity. As I'm writing this very sentence, we are smack dab in the middle of the Covid19 outbreak. Some businesses are still closed, and the economy is suffering. However, I have noticed that those companies that have the ability and have embraced the technology while trusting in their employee to get the job done are far less affected by the mandated shutdowns. Additionally, many studies have proven that 4-day work weeks are much more productive, and people are much happier. Yet, most organizations can't get past the idea of giving employees three days off. Amazon has adopted the 4-day work week, and I assure you it's by design.
The leaders of tomorrow… no, the leaders of today must embrace the human element, and Human Resources will be the ones leading that charge in the most successful organizations. Glenn goes on to say, "HR can't just be a compliance cop protecting the company from those pesky employees. It must empower employees who want to help grow the company and evolve to achieve their goals, too. In addition, HR can't just be about data either. Not everything human can be optimized through data – and looking at the data is no replacement for having insight and listening to people. That's what's getting lost in all these discussions of HR: people! Humans, like employees, are a group – a species if you will. Something to be studied, controlled and defined. People are individuals. We can't forget about the people."
This is a department whose entire function is that of human capital management, meaning its whole mission is individual and organizational improvement and growth. HR is not the enemy; they are your business partner! Unfortunately, there are still plenty of those so-called "leaders" at the top of many organizations that still have that transactional mindset. Just look at the standard definition found through a basic internet search on "What is Human Resources?" The result and I'm paraphrasing it because I don't want to bash any specific articles or organizations is as follows: Human resources: a department responsible for finding, screening, recruiting, and training job applicants and administering employee-benefit programs. As a company grows, HR plays a role in helping manage a changing environment and the higher demand for quality employees. I'm sorry, but to me, that sounds like the definition of a recruiting firm (aside from the benefits portion), and therein lies the problem.
Real leaders understand the true value of HR, and they utilize them whenever possible. If you are the President or CEO of an organization, you should encourage, if not demand, that your leadership team takes advantage of this vital coaching, managing, and mentoring resource because that's exactly what HR is - a vital resource! From simple daily advice on how to handle an emotional employee during a termination to more sophisticated strategies like improving or building strong interdepartmental relationships, your HR department is the key to organizational growth and success.
You know, it's been said many times that it's the people behind an organization that makes it successful. If that's the case, then as leaders, I believe it's our responsibility to correct the inaccurate perceptions our employees may have of Human Resources by creating a real business partnership with a department and industry that is truly "all about the people." Rest assured, the most successful companies of tomorrow will widely embrace the HR element and its managing of human capital.
IN SUMMARY: Within the most successful organizations, HR will be leading the charge to humanize our businesses. Perhaps leading that charge should also come with a newly renamed department: "Human Capital Management and Resources."