The Changing HR Profession

By Patrick Kiger

Sep. 28, 2006

For those interested in a career in human resources, first the bad news. During the next decade, experts say, the sort of corporate job that many HR professionals have today may cease to exist.

    Academics, HR consultants and executives at major outsourcing firms describe a future in which the continued growth of outsourcing, advances in information technology, and bottom-line pressures may lead to the demise of the traditional HR generalist who handles everything ranging from benefits programs to recruiting.

    “In the old days, companies had delivery boys who scooted around with packages,” explains David Creelman, chief executive of Creelman Research, a Toronto-based HR consulting firm. “Today all those jobs have disappeared because of Federal Express. We’re rapidly approaching the point where HR will be like that, where companies will use outside vendors for all but the strategic level of tasks.”

    But there’s good news too. There still will be a place for HR professionals–but often that place is going to be on the outside rather than in-house, working for an outsourcer or an IT vendor. The remaining HR jobs inside companies usually will be for HR strategists, focused on finding ways to leverage the company’s human capital to improve business results. And with globalization proceeding at a breakneck pace, both in-house and outside HR professionals will have to deal with corporate workforces scattered even more widely around the globe than they are today.

    “There are going to be tremendous opportunities out there in HR,” says John Gibson, senior vice president for operations at Convergys Employee Care, a Cincinnati-based global HR outsourcing firm. “But what HR professionals will be doing on a daily basis is going to be very different from what they do today.”

    To get those jobs of the future, prospective HR specialists will need a much broader set of skills, background and experience than their predecessors have had. A degree from an HR program at a major university undoubtedly will still be a plus for entry-level applicants. But that won’t be enough, according to Peter Weddle, an HR consultant and publisher of Weddle’s Guides, a print guide to 40,000 online job boards.

    “If you’re just taking HR courses, there’s a danger that you’re going to be rooted in the old way of thinking,” Weddle says. “You may have an easier time getting in today, but you’re training for a corporate job that may be outsourced two or three years down the line. What you really need to do is adopt more of a business-school, leadership mentality. Take a broader range of business courses. You need to understand how companies make money, and then focus on how HR facilitates that. You’ve got to aim for a kind of job that is going to be harder to get, but in the long term there’s going to be a lot more security. You’ve got to be ready to compete for a more powerful and influential position in the company.”

    Convergys’ Gibson says: “Look for opportunities for international exposure, because that’s going to be increasingly crucial. There are some very respected university HR programs in other countries, and if you have an opportunity to study at one of them, that’s an asset.”

    But both in the U.S. and abroad, university HR programs themselves are likely to evolve to fit the new realities, predicts Kathryn Kelly, president of ExcellerateHRO, a Plano, Texas-based outsourcing firm. “In the future, we may see HRO providers partnering with universities to develop programs around HR outsourcing, to be offered through HR as well as the IT curriculum,” she says.

    New HR professionals who land those entry-level jobs at HR outsourcing firms, however, will find themselves learning the HR trade in an environment very different from traditional corporate HR.

    “Outsourcing firms are looking for a very different skill set,” says Ed Jensen, an Atlanta-based partner in the human performance consulting practice of Accenture, a global HR outsourcing firm.

    “They’re less focused on your certification in payroll or benefits administration, and more on your customer relationship skills,” Jensen says. “After all, you’re not hidden away in the back office—you’re right up front, in a job where you’re supposed to be creating revenue, dealing with people. You really have to be able to focus on the business side, and be able to justify the worth of what you’re doing, because somebody else is paying for it. You’ve got to have good communication skills, so you can explain all that to the clients. And you’re going to have to learn now to do this for multiple clients at the same time.”

    Convergys’ Gibson agrees. “To work for us, not only do you need to have the broad HR generalist skills, but also business acumen, financial skills, the ability to collaborate with clients,” he says.

    As their market continues to expand, outsourcing firms are filling their staffing needs by hiring HR professionals away from companies. But during the next decade, that pattern is likely to reverse.

    “We’re already at the point where big companies are outsourcing two-thirds to three-fourths of their HR functions, and it’s not difficult to foresee that in five to 10 years, basically every company will have done that,” Jensen explains. “That’s going to change the way that people break into the field, because the entry-level jobs will be at the outsourcing companies who actually provide the HR services. What I think you may start seeing is the same pattern that now exists in accounting and finance, where people generally come out of school and go to work for an outside firm. Then, after they’ve developed themselves for a few years, they begin to move over into a company’s finance department. That eventually may be how it works for HR, as well.”

    As those young HR professionals gradually migrate from outsourcers to the companies they formerly served, they’re likely to find a very different corporate environment from what exists today. For one thing, many companies may no longer even have an HR department.

    “It used to be that there were HR generalists who would do a lot of administration, some technology, and hope to get a little strategy in,” consultant Creelman says. “What you’re going to see in the future, in midsized and larger companies, is that these will be different career tracks, with increasingly different skills. Possibly, those functions may even be scattered across different parts of the company.”

    Though administration largely will be the province of outsourcers, Ben Dattner, a New York University professor and organizational effectiveness consultant, thinks it will also create the need for a new type of in-house position–the HR executive who is skilled at managing the efforts of outside services vendors.

    “In the future, you’re going to have outsourcing firms, consultants, all these different planes buzzing around,” Dattner says. “On the inside, there’s going to be a need for somebody who will be the equivalent of an air traffic controller, somebody who can develop a coherent HR strategy around all these outside resources and manage them.”

    Creelman agrees. “I think the generation of people coming into companies from outsourcing firms will better understand how to maximize the value that companies get from outsourcers,” he says. “Right now, mostly what we see is a one-off model, in which each outsourcing contract has its own unique elements. But with their background, these new HR people will be able to make outsourcing relationships much more standardized, so that they’ll be able to benchmark much more in terms of costs. They’ll make the whole process much more sophisticated.”

    Creelman says he sees technology management as another emerging opportunity for HR professionals.

    “HR technology already is a big deal, and it’s going to be an even bigger deal in the future,” Creelman says. “But there aren’t nearly enough people who are skilled at all the aspects of making it work, from selecting the right vendors to understanding how to roll out HR technology inside an organization and get the buy-in.”

    For the HR professional of the future, Creelman believes, project management skills will become as important as understanding the nuances of benefit plans.

    Experts agree that the in-house HR positions will focus increasingly on finding ways to serve the company’s business strategy.

    “There’s a limit to how far you can go with outsourcing,” Accenture’s Jensen explains. “Tasks such as developing an overall talent strategy that helps the firm to meet its business goals–it’s going to be hard to outsource that. These things are maybe 5 to 10 percent of the traditional corporate HR function, but in the future, they’re going to be magnified in importance.”

    HR professionals who got their start in outsourcing firms will be well prepared for strategic roles in companies, Creelman says, because in addition to HR knowledge, they’ll also have been exposed to the operating side of a business.

    “Frankly, HR departments historically have been very insular,” he says. “They’ve usually been composed of people who’ve been with the company in HR for a long time, if not their whole careers. But in the future, they’ll be mixing that up, with folks coming in from the outsourcers, plus people they bring in from other parts of the business. I think they’re going to bring a lot of energy and new ideas to HR.”

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