The Evolution of HR: Where It’s Been and Where It’s Going

ITA Group
ITA Group

Group of HR professionals talking about human resources management with a timeline overlay

Imagine a time when workers were considered expendable. Before the evolution of HR to today's standards, working conditions were harsh and dangerous (think the Middle Ages) and the tension between the need for physical protection and higher output was growing.

Maybe modern working conditions were never as terrible as the medieval period, where you can imagine people were out for themselves and there wasn't a human resource department to quash the bullies and make them put down their swords. But there was a time when working conditions were untenable and unsafe for human beings.

Pre-1900s Human Resources Management: Tough Work, Tougher Conditions

The idea of a connection between worker wellbeing and their productivity emerged between 1890 and 1920. American business leaders, aided by scholars and politicians, embraced "industrial betterment" and embarked on plans to stabilize the labor force and encourage employee loyalty. To carry out the somewhat surreptitious practices of the time, departments called “industrial welfare,” and “scientific management” were created.

The Main Takeaway: Workers need to be treated as people, not as expendable resources by a company.

1920s–1950s Human Resources Management 

Lucky for us human beings, the workplace began to change with the realization that workers were not puppets on a string, but people with emotional and psychological needs. "Personnel departments" and "manpower development" increased their efforts around internal training and working with labor unions to develop stronger compensation packages. “Human capital” became synonymous for the knowledge an individual embodies in affecting economic growth.

The Main Takeaway: When employees have opportunities to learn on the job and be compensated fairly for their efforts, they become more valuable to the organization.

1960s–1980s Human Resources Management

In the early '60's, the US legislature began passing fairer employment practices such as the Equal Pay Act of 1963 and Civil Rights Act of 1964 compelling human resource departments to focus on compliance issues. At the same time, human motivation theories including Herzberg’s Two Factor Theory and Deci and Ryan’s Self-Determination Theory, began to transform the workplace. Organizational management and industrial psychology contributed to HR paying more attention to employees' need for achievement, advancement, and recognition by matching the nature of the work itself with a person's skills and interests.

The Main Takeaway: Workers need certain rights to be considered for a job, but they also need psychological motivators including autonomy, purpose and mastery to excel in their work.

1990s–2010s Human Resources Management

The role of HR is more complex than ever. New and emerging technology has shifted the focus from personnel management and administrative tasks, today’s HR departments—at least the forward-thinking ones—spend their energies managing employee engagement and strengthening culture. They’re also charged with managing the employees themselves to increase the odds they’re happy at work and will continue to stick around for the foreseeable future.

Through the decades, the workforce evolved from labor-based to services-focused requiring HR to shift from a process-centric function to a worker-centric function, according to SHRM. Understanding the needs, wants and motivations of a diverse and multi-generational workforce has led HR to attract and retain high-performers, but the battle for top talent has accelerated. The competitive business environment and globalization necessitates that workforce change initiatives be based on and integrated into the business strategies giving more HR leaders a seat at the C-Suite table.

The Main Takeaway: Human resource management responsibilities reach far beyond administrative and compliance accountabilities. Having a strategic understanding of the business climate will position you to recruit, hire and retain the best employees while adding value at the highest levels in the organization.

The Future for HR Leaders

SHRM points out that, "Tomorrow's HR leaders will need to be bigger, broader thinkers, and they'll have to be tech-savvy and nimble enough to deal with an increasingly agile and restless workforce." Gartner agrees saying HR leaders will need to be "more flexible and responsive to changing employee needs."

Leaders who understand HR's enormous value in the workplace will have a unique, big picture view from both the company perspective and employee perspective.

Here are five ways to help human resource management get there:

  1. Embrace Technology & Analytics. Let go of old practices. Predictive analytics will grow to “assess everything from employee retention to recruitment strategies to the success of wellness programs” according to a report by SHRM. Leverage data to augment better informed decisions.
  2. Understand Employees’ Life Stage. Today’s workforce is a hodgepodge of employees going through a variety of personal and professional change. Different employees will be in different stages of life and career and may require employers to make adjustments to find a balance between work and life. They expect a wide range of employee experiences to be accommodated by technology. In addition, they want ongoing coaching, greater visibility and recognition. HR should manage these efforts.
  3. Change Your Mindset. In today’s competitive space where driving engagement with both employees and customers is vital, it’s important for marketing and HR executives to lead the charge toward a meaningful partnership. Human resource management is changing and HR leaders, “need to transform their perceived administrative roles to positions of innovation.” HCM (Human Capital Management) indicates there will be more cross-functional consulting among HR and departments like marketing, customer service and finance.
  4. Shift From Being Reactive to Proactive. HR professionals have the “ability to completely transform a business’ entire workforce,” says human resource consultants, G&A Partners. Start by consolidating processes, developing future leaders and building a culture of recognition to sustain employee morale, productivity and retention.
  5. Spend Time on Your Employer Brand Message. This communicates what sets your organization apart and why prospective employees should consider it. But if storytelling isn’t your jam, consider connecting with your marketing team members for support. They can help ensure you say exactly what you want to say. This will also help you think long-term about how best to integrate this message into the daily experiences of your employees so it stays with them.

The 19th century "industrial betterment" is light years away from HR's future opportunities to form a highly satisfied, productive and happy workforce. “The next-generation HR function has an essential role to play, replacing traditional ‘best practices and cost-cutting’ approaches with bold new strategies, structures, tools, processes and metrics,” notes KPMG’s Vishalli Dongrie, Head of People & Change in India. 

In other words, the future of human resource management puts emphasis on humans; less so on humans as a resource.

See the bottom-line benefit of a motivated team, and learn how to create and sustain a successful employee experience by downloading our ebook, Improve Retention and Engagement by Enhancing the Employee Experience.