HR, How Did You Get So Influential? The Evolution of a Profession

BY Emily McCrary-Ruiz-Esparza | May 16, 2023

Long before the notion that you could love your work, the HR profession was founded on the fact that work could be harmful to your health. In many ways, the profession's growing focus on well-being is not a touchy-feely detour, but a natural outgrowth from its roots–maybe even a nod to its origins.

“The birth of human resources today came out of the concerns for individuals, starting off with their actual physical concerns,” says Barbara Holland, HR knowledge advisor at the Society for Human Resource Management (SHRM). “It’s moved well beyond that at this point.” 

Born on the dangerous shop floors of the Industrial Revolution, human resources has been gathering responsibilities, but not losing any, for 100 years. Where it once was charged with the physical safety of workers, HR’s list of responsibilities now includes employees’ mental, financial, and social well-being, and it’s contending with AI and all its practical, ethical, and regulatory implications.

The HR department of 2023 takes on more workload and influence than ever before, and many practitioners are shifting to strategic roles and automating tasks that were once the purview of the “personnel department” of 50 years ago, like benefits enrollment, tax documentation, and fielding FAQs. They’re freeing up time to focus on the more creative elements of the job, like developing leaders, creating equitable work environments, and bolstering employee well-being.

How did HR get here, and where is it going? From Day One spoke with HR scholars and specialists to provide perspective about how the last three years of disruption fit into the longer game.

In the 20th century, HR went through a tremendous amount of existential change–it evolved from protector of safety to negotiator to compliance officer to paper pusher to strategic business partner–and as of the 21st century, it has come full circle. In many instances, HR has again assumed its role of employee advocate. Now, the profession is tapping into policymaking, giving employees a seat at the table and a say in their working conditions.

The Modern Origins of HR: The Safety and Well-being of the Worker

The modern practice of human resources originated in the late 19th and early 20th centuries in response to the dangerous working conditions of the Industrial Revolution. “As there were factories and more workers working in one place, that’s really where the whole idea of a personnel department started,” said Kristie Loescher, who teaches HR and management at the McCombs School of Business at the University of Texas at Austin.

Not only were the physical working conditions dangerous, “the emotional and psychological hazards of working consistently in these conditions were immense as well. Long hours, limited sustenance, and impersonal treatment contributed to an already stressful work environment,” wrote the academics Robert Lloyd and Wayne Aho in their paper, “The History of Human Resources in the United States: A Primer on Modern Practice.”  

Miserable conditions led to the proliferations of labor unions and their calls for workplace reforms. For instance, following the infamous Triangle Shirtwaist Factory fire in 1911, in which 146 workers were killed as a result of locked doors and inadequate escape routes, both the city and the state of New York passed dozens of workplace safety laws in response to pressure from newly formed unions, community organizers, and the general public.

Labor unions gave workers a say in their working conditions, and the National Labor Relations Act of 1935 compelled employers to give them a seat at the table. Now that there was a need for someone to negotiate with the unions, the discipline of “industrial relations” was born. 

HR Becomes a Compliance Officer

By mid-century, among HR’s chief concerns was compliance with regulation. Following the passage of laws that protect employees from discrimination in the workplace–including the Equal Pay Act of 1963, the Civil Rights Act of 1964, which established the Equal Employment Opportunity Commission, and the Age Discrimination in Employment Act in 1967–installed a department designed to keep the company from getting sued. Its stance was a defensive one, said Holland.

Under the new name “personnel,” what would become the modern HR department was steeped in the bureaucracy of mitigating legal risk and all the record-keeping it requires. Exchanges between HR and the workforce were minimal and transactional.

Andrea Osborne, who has more than three decades of experience in HR and is currently the VP of people for the product team at the software company Genesys, describes the mentality of the HR department of that time like this: “Here’s your badge, here’s your documentation, here’s your tax paperwork. Bye! I’ll see you on your way out the door.” 

HR Becomes a Business Partner

The globalization of business spurred the changes that produced the influential HR department of today. Companies turned their attention to the strategic capabilities of the HR department when, in the 1970s and 1980s, it became increasingly clear the U.S. was now competing in a global economy. 

In a paper on the international perspective of HR, Randall Schuler and Susan Jackson, both scholars of HR, wrote that “during that period, the focus of business shifted from domestic to multinational to global; the speed at which business was conducted increased; organizations recognized that labor costs and productivity must be address from a world-wide perspective; and many companies realized that competitive advantage could be seized and sustained through the wise utilization of human resources.” 

SHRM’s Holland began her HR career in the mid 1980s, driven to improve the cool and distant personnel department she encountered in the past. Holland saw transformation beginning to take place. “We were looking to make a difference,” she said. “I came in right on the cusp of the old still hanging on with some organizations, but newer organizations really embracing that HR was more than just a police department and signing people up with their paperwork and then walking around making sure nobody was breaking the rules.”

HR operations itself benefited from globalization, according to Holland. “You had influences from other cultures and how people management was handled based on wherever their headquarters was.”

Decades ago, the PR department was known for paper-pushing and complicance (Photo by iStock/Getty Images)

At the same time, the U.S. transformed from a manufacturing economy to a “knowledge” economy. Where we once made products, we now made services, and that required a new approach to employer-employee relations. “If I have analysis work to do, and customer service work to do, and work that requires more autonomy on the part of the worker, all of a sudden I have to treat that worker very differently. As jobs changed, the way we treated employees had to change,” said UT-Austin’s Loescher. “This whole new area of HR was added in the ’80s and ’90s about employee engagement and development–that if we invest in our employees and give them working environments that are satisfying and then help them develop and learn and grow, they’ll not only be ready for today’s challenges in our business, but they’ll be ready for tomorrow's challenges.”

James Bailey, who teaches leadership development at the George Washington University School of Business, noted the influence of social science research in the 20th century, which asserts that people, not factories and machinery and financial assets, determine future business success. “It’s culture, it’s selection, it’s finding the right people, it’s properly motivating them to do their work better,” Bailey said. “Why you can have two firms of equivalent assets and one far outperforms the other is because of the people factor.”

Though labor unions declined in popularity by the 1980s, Thomas Kochan and Robert McKersie noted in their 1989 paper “Future Directions for American Labor and Human Resources Policy,” the “rising expectations of workers for increased influence over their immediate work environment and long-term careers.” Following a period of bureaucracy that kept distance between employer and employee, the HR department now had to operate with employer and employee best interests in mind.

As companies had to compete in a global economy that could access to talent all over the world, business strategies were adapted to include skills development and employee engagement. According to Loescher, “the profession was changing from one of mere rule implementation and screening of applicants to one where it included connection to the business strategy as well as a connection to the analysis and design of jobs that not only would meet the strategic need of the company, but would be motivating for people to do,” said Loescher.

The “personnel” department became “human resources,” and in university classrooms, moved from industrial relations to business schools, said Bailey. HR was officially a business asset. 

Human Resources Becomes the People Department

HR practitioners today will have noticed another change to the department’s name. Just as the change from “personnel” to “human resources” marked a change in the existential purpose of the department, the more recent shift to “people operations” reflects the further expansion of the function in business.

“Currently, even the term ‘human resources’ does not seem to convey the importance of human capital as we’ve moved more into a ‘knowledge’ economy, in which human thought, creativity, and innovation are critical to the success of new economy businesses,” said Sherry Moss, the associate dean of MBA programs at the Wake Forest University School of Business.

In corporate America, the new term is “people operations,” in academia, it’s all about “human capital management,” marking “yet another step symbolic of ‘We are part of the capital that makes this organization function and we want a seat at the table,’” said GWU’s Bailey. 

Automation of repetitive tasks, or ones that are at least more easily handled by software and AI, frees practitioners to focus on the strategy of developing talent and better workplaces. As mundane functions are automated, “it will leave more opportunities for the HR business partners to have more human interactions,” said Amy Freshman, senior director of global HR at the HR software company ADP. “Automation will certainly help remove the repeatable mundane tasks. At the same time, what is being asked of HR is changing. In many ways it’s growing, which just adds more to the plate.”

As the department gets more involved with the human elements of business, its reputation among employees is changing dramatically. Kam Hutchinson, a global director of talent acquisition who has spent more than a decade working in HR, said workers are more open to interacting with HR than they were in the past. “There’s more of an openness to reaching out to HR for support and seeing them as an advocate for you and not necessarily for the company,” she said. 

The HR Department of the Future is Proactive

So, what comes next? As HR cements itself as a key player in business success, where is there to go? 

HR is no longer just a responsive organization. Its latest goal is anticipation, prediction. For instance, contributing to the excitement around the new discipline of “people analytics” is its potential for predicting things like employee engagement or employee attrition. 

And the leaders in the department aren’t just thinking about what goes on inside a company, they’re considering the outside influences as well. When Jackson and Schuler wrote their article in 2005, they noted HR’s growing responsibility to monitor the external environment. As people operations is called upon to respond to national crises, social unrest, and mental health needs, that responsibility is even greater today.

Holland believes the next HR frontier is public policy. In the last handful of years, SHRM has become involved in influencing lawmakers. Its Government Affairs team has advocated in Washington for policies like paid leave, removing barriers to employment for immigrants, and employer-sponsored education assistance.

“Where before we were a reactionary industry or occupation to what’s happening in employment law and things like that, now we’re inserting ourselves to try to actually influence that before the law is made,” said Holland. “HR is trying to actually influence change before it hits us.”

Emily McCrary-Ruiz-Esparza is a freelance reporter and From Day One contributing editor who writes about the future of work, HR, recruiting, DEI, and women's experiences in the workplace. Her work has appeared in The Washington Post, Fast Company, Quartz at Work, Digiday’s Worklife, and Food Technology, among others.

(Featured photo by Violeta Stoimenova/iStock by Getty Images)
 


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What Transparency Can Expose: an Obvious Need for Organizational Change

In the realm of corporate values, few terms have been more universally embraced in recent years than the notion of transparency. Among its many applications, organizations have deployed it to contend with sticky social matters and public scrutiny of corporate ethics.  At the World Economic Forum’s annual conference in Davos this year, speakers repeated the term like a mantra, reflecting a movement that has been building for a while. Fast Company reported that at the summit in 2021, more than 60 businesses announced a “commitment to transparency” about their effects on society and the environment. In response to pressure from stakeholders on all sides, executives from TikTok, Glassdoor, Google, YouTube, Zoom, Boeing, Twitter, and the White House have all made public commitments to transparency in recent years.Yet lately it has been dawning on leaders that this magic, window-cleaning solution can make things worse, especially if what has been exposed seems to be hypocritical, poorly thought-out, or further obfuscation rather than moral clarity. The most notorious recent example came last December, when the presidents of Harvard, MIT, and the University of Pennsylvania gave hedged, lawyerly responses when asked in a congressional hearing whether calls for the genocide of Jewish people would violate their school’s conduct rules. Their answers frustrated stakeholders on many sides of the issue.Seeing the havoc that failed transparency can wreak, Harvard is second-guessing the value of transparency, and is considering keeping mum on divisive matters altogether. The Harvard Crimson reported in February that the school’s interim president is expected to announce that the school is considering a policy of “institutional neutrality,” in which it will make no statements on politicized matters. Leaders at other universities are in favor, it appears. During a recent panel discussion on the matter, Yale Law School professor Robert C. Post remarked that “when we speak outside of our lane, we invite reprisals, we invite regulations, which we cannot defend in terms of our mission,” he said. “There may be reasons to do it. 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It shows up in these glossy sustainability reports about all the wonderful things [the company] is doing,” Taylor told From Day One. “The thing that has changed is that those defenses don’t work anymore.”The Age of Clarity and CandorThe theory is that if you bare it all, the company will be rewarded for its candor. “If a single concept drives today’s businesses, regulators, journalists, and NGO activists, it’s that transparency is the route to accountability,” Taylor writes in her book. Yet all this new data-dumping, press-releasing, and report-publishing hasn’t necessarily reconciled what companies say vs. what they do, though trust in business has generally grown over the years, especially when compared with trust in government. 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Figures like Yelp’s chief diversity officer, Miriam Warren, and Bumble’s founder Whitney Wolfe Herd set high bars for the influence executives can have on equity and integrity inside and outside an organization.But some of the leaders installed in these roles are faced with the uncomfortable truth that their position is corporate PR. Taylor sees this often: People take jobs and think of themselves as organizational change agents, only to find that senior leaders think of them as defense mechanisms to protect corporate reputation and, in the case of compliance teams, to deflect regulators.For instance, the chief diversity officer is typically charged with making the business more demographically diverse and equitable for people across every department at every level of the business, yet many of them work with very limited resources. 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Emily McCrary-Ruiz-Esparza | March 24, 2024

Apprenticeships: a Classic Solution to the Modern Problem of Worker Shortages

The U.S. labor market has become like a crazy quilt: mass layoffs in certain industries, along with dire shortages of workers in businesses ranging from accounting to trucking. To close the critical gaps, industries are turning to modern versions of an age-old institution: the apprenticeship. “Apprenticeships are the most promising solution to addressing the current labor shortage. Why? 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There just aren’t enough young people entering the field to balance out their retiring elders. One problem: the profession has a reputation for being, well, dull.To fill the talent pipeline, and help rebrand the profession, AICPA and CIMA have piloted a youth apprenticeship program in Maryland high schools, aiming to drum up excitement and interest in the field among young people.Customizing the Programs Organizations, employers, and educators have found ways to tailor apprenticeship programs to their needs. They’re not just for recruiting, they can be deployed for talent development as well. “With the digital transformation of our economy, tens of millions of jobs now require workers to use tools to build things–only the tools are digital and workers no longer need to wear hardhats,” said Craig, author of Apprentice Nation.Often, those skills are software related. 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Emily McCrary-Ruiz-Esparza | February 14, 2024

DEI Starts Over: How It Needs to Adapt to Survive the Battles of 2024

When Elon Musk and other headstrong billionaires start using you as a punching bag, it might be a smart time to duck. In his latest tirade against diversity, equity, and inclusion (DEI), Musk attributed the door plug blowing off a Boeing 737 Max 9 jet earlier this month to the aviation industry’s efforts to diversify their workforces. “Do you want to fly in an airplane where they prioritized DEI hiring over your safety?,” he wrote on X, formerly Twitter. Citing no evidence, Musk’s claim echoed the conspiracy theory asserting that DEI led to last year’s collapse of Silicon Valley Bank, which proved to have no basis in fact. While corporate America proudly carried the banner of DEI in recent years, 2024 is shaping up as the year in which many companies will be lowering the profile of their efforts and changing the approach of their programs. Recognizing that the term DEI has become another cudgel in the culture wars, joining “wokeness” and ESG, corporate leaders are responding to a wave of legal and political challenges. Among them: The Supreme Court is considering a case that could inspire a raft of regulatory complaints against DEI programs, charging them with reverse discrimination; conservative billionaires are funding a wave of lawsuits against such programs; and red-state politicians are threatening to follow the example of Florida and Texas by passing  new laws threatening to limit the scope of DEI. “They’re starting with letters, but I don’t think that they’re bluffs,” said Zamir Ben-Dan, a Temple University assistant professor of law. “It’s going to be a problem,” he told the AP. “It’s going to lead to a decline in racial diversity in the workforces.”Corporate America doesn’t want that to happen. In a survey late last year by the Conference Board, none of the 194 chief HR officers said they plan to scale back DEI initiatives, programs, and policies; 63% said they plan to attract a more diverse workforce. Employers say that an embrace of diversity and inclusion has become an important corporate value when it comes to recruiting the workers they need, especially younger ones who tend to favor diversity. As Fortune put it, “DEI Is Dead. Long Live DEI.” Yet companies are looking for ways to step away from the term “DEI” as well as aspects of programs that could make them legally vulnerable. “Companies are really starting to look at other ways to do the work without saying that they’re doing the work,” Cinnamon Clark, cofounder of Goodwork Sustainability, a DEI consulting firm, told Axios. 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Lower courts have upheld the city’s argument that Muldrow failed to demonstrate that the transfer amounted to an “adverse employment action” that caused material harm.The Biden Administration has supported Muldrow’s case because it could enable more people to file discrimination cases with the Equal Employment Opportunity Commission [EEOC], yet a broad interpretation of Title VII by the Supreme Court, relaxing the need to prove harm, could also “open the door to a flood of reverse discrimination claims against certain workplace diversity, equity and inclusion programs–such as mentoring and training programs for underrepresented groups–that ordinarily would not survive in court,” the Washington Post reported. “Such complaints have become more common since the Supreme Court overturned race-conscious college admissions in June.”Well-Funded Legal ChallengesEdward Blum (pronounced “bloom”), a white, 73-year-old former stockbroker, has made it his life’s work for more than three decades to stamp out affirmative action. He does not have a law degree, but he spends his day planning lawsuits to challenge affirmative action in the Supreme Court, helping to persuade the court to hear eight cases. Most recently, in June, he was in large part responsible for bringing the case that led to the court’s decision to outlaw affirmative action in higher education (Students for Fair Admissions v. Harvard College).Since then, he has been suing elite law firms over their DEI language. Many firms have yielded and made changes to avoid litigation. While Blum told Bloomberg Law that he’s done suing law firms–“There’s nothing left for us to do in that space,” he said–legal experts are watching where he’ll turn next. “Well, I think employment is one area that I think will garner greater attention, not just from me, but from other organizations, other legal policy foundations,” he told the New York Times. “I also think that some of the things that we associate with higher education–internships, scholarships, certain research grants–those need to be revisited if they have been race-exclusive.” One group that Blum founded, the American Alliance for Equal Rights (AAER), filed a lawsuit last August against Fearless Fund, “an Atlanta-based venture capital firm run by two Black women, alleging that the fund is engaging in racial discrimination by running a grant program exclusively for early-stage companies owned by Black women,” the Washington Post reported.While Blum has often been portrayed as a one-man-band, challenging major institutions on his own, a study by the Democratic Policy & Communications Committee, produced by seven prominent Democratic senators, called Blum’s various organizations “fronts for corporate mega-donors seeking to change the law through the courts.” In particular, the report cited Students for Fair Admissions as “funded primarily through the Koch [Brothers] operation’s shadowy dark-money operation DonorsTrust, known as the ‘dark-money ATM of the conservative movement.’” Blum has a fellow traveler in Stephen Miller, the arch-conservative former Trump Administration advisor best known for his hard line on immigration issues. Miller has been zealously targeting corporate DEI programs through his well-funded group America First Legal. Since 2022, his group has filed 25 complaints against companies with the EEOC. Miller’s organization has notched few legal victories, but that may not be the point. More than 85% of the AFL’s budget went to advertising, while only 4% was spent on legal services, the Daily Beast reported. Even so, “at least six major U.S. companies including JPMorgan Chase have modified policies meant to boost racial and ethnic representation that conservative groups threatened to sue over,” a Reuters review of corporate statements found.How Corporate Employers Can RespondWhile corporate leaders in the Conference Board survey said they don’t intend to pull back on DEI, the combination of corporate austerity and high-profile backlash is surely depleting the resources available to DEI. In a report last October, Forrester, a research and advisory company, found “the percentage of companies that funded a DEI function with an endorsed strategy and personnel dropped from 33% in 2022 to 27% in 2023; we predict that this number will fall to 20% by the end of 2024 in the wake of cuts that disproportionately affect DEI teams. As a result, too many companies will default to ‘check the box’ efforts such as heritage days, leading to performative–rather than substantive–DEI programs.”Organizations that are still motivated to maintain their commitment the principles of DEI will need to adapt their approach. “As the law inevitably evolves in a more conservative direction, the new legal standards will be absorbed into the field of DEI, transforming it as an enterprise. While this shift will occur organically, smart organizations can avoid a lot of pain and expense by thinking about how to adapt in a more intentional way,” reports Harvard Business Review. In their HBR story, Kenji Yoshino and David Glasgow, lawyers at New York University and authors of Say the Right Thing: How to Talk About Identity, Diversity, and Justice, identify three aspects that can make a DEI program legally risky: it confers a preference for some individuals over others, the preference is given to member of a legally protected group under Title VII, and the preference relates to a palpable benefit, like a job, promotion, or L&D opportunities.Given those criteria, write Yoshino and Glasgow, the specifically risky programs include hiring quotas, tiebreaker decision-making for hiring and promotions based on identity; group-specific internships and fellowships; and tying manager compensation to diversity goals. While all of those measures may be designed to compensate for systemic biases, “it is clear that the conservative supermajority of the Supreme Court does not agree with such a worldview.”Reshaping Programs as Well as the LanguageTo avoid charges of reverse discrimination, employers can make several changes to existing plans. Among other things, they can make DEI initiative more identity-neutral yet still designed to remove bias, like making employee-resource groups and other affinity groups open to all, rather than restricted based on identity. “These approaches do not ‘lift’ certain groups above others, but ‘level’ the playing field for everybody,” write Yoshino and Glasgow.The language, too, is shifting, with more focus on the “inclusion” aspect of DEI, as well as “belonging” and “well-being.” Reported the Post, “While some demographic-specific efforts will probably remain, overall, corporate DEI is likely to shift and focus more on ‘universal’ efforts to make recruiting, hiring and retention more successful for everyone.” Even as they adjust to the risk of being sued for reverse discrimination, employers have to make sure they don’t over-correct in the opposite direction. “Getting sued for a regular discrimination claim from someone who belongs to an underrepresented identity in the workplace is still more common than a reverse discrimination claim from a white person,” reports Thomson Reuters.  Companies shouldn’t abandon DEI initiatives that help to make those from underrepresented backgrounds feel more welcome or offer more opportunities to succeed, NYU’s Glasgow told Reuters, “because doing so could create an environment that is more hostile and unwelcoming to people who belong to these marginalized groups.” For example, he said, eliminating mentorship or sponsorship opportunities that were helping more women advance through an organization might lead to a more one-dimensional leadership team–a prospective setback to decades of progress.Andrea Sachs, a graduate of the University of Michigan Law School, began her career as a lawyer in Washington, D.C., at the National Labor Relations Board, then spent nearly 30 years in New York City as a reporter at Time magazine.  (Featured photo by Violeta Stoimenova/iStock by Getty Images) 

Andrea Sachs | January 17, 2024