HR and HR technology has a long history – in fact, the earliest known record of a payroll was from the 14th century! The modern HR department is very different than it was even 10 or 15 years ago, and many old stereotypes or myths about the function are no longer accurate. Chief among these changes is that HR has become very data-driven, which has significant implications for hiring and internal mobility practices. Let’s rewind a bit to explain how HR got to today, and what this shift means for HR pros and employees.
The HR role as we know it today started to take shape in the 1990s as the internet and the World Wide Web became widely used, the “War for Talent” began, and HR teams started competing to attract high-quality workers. In this era, HR developed several stereotypes – while most of them weren’t true, they’re revealing in terms of how HR was viewed by the business world at large. Some of these included:
- HR is old-fashioned and tech-adverse. The people working there don’t like change and don’t “get” technology.
- HR isn’t strategic. It’s a means to an end (admin work and putting butts in seats), but it doesn’t contribute to big-picture business goals. Because of this, HR is often left out of business-wide strategic planning.
- HR workers are “cat people” so to speak, both literally and stereotypically (offbeat, set in their ways, maybe a bit unfriendly).
- HR is the enemy. Many employees feel that HR is working against their best interests and doesn’t feel like they are helping them meet their professional goals.
The Truth About HR Today
Fortunately, recent research has confirmed that HR departments are split between dog and cat lovers, just like everyone else (phew)! In truth, HR is more strategic and contributes more to business success than it’s given credit for. This has been especially true over the last several years.
Counter to the stereotypes listed above, surveys have found that HR employees are more educated than the average employee, and more likely to have spent time in other departments (according to HR technology analyst George LaRoque of WorkTech). As demands around talent acquisition have grown, and data has become more accessible, HR has become more strategic and aware of how they contribute to business success, and how their tools and programs create value. In addition to HR’s longtime role in ensuring compliance with a wide array of programs and regulations (from GDPR to the new Colorado and NY requirements to publish salary ranges), it has become a player in developing company culture, and in implementing diversity, equity and inclusion programs.
The transition of HR away from admin work to people-first work, has been reflected in even the name of the position. Increasingly, HR leaders are referred to as People leaders, and Chief Human Resources Officers are being retitled Chief People Officers. This reflects the reality that better understanding and supporting people is a key business strategy. And as the business saying goes, you can’t manage what you can’t measure.
In fact, over the last several years a huge amount of money and time has been invested in HR technologies that take a more scientific, data-driven approach to hiring and recruiting. The total HR tech VC investment in 2021 was $18B, up from $5B in 2020 (according to WorkTech) – with a majority of organizations planning to invest significantly in digital transformation initiatives in 2022.
In fact, foundational systems (often called HCMs) were often considered the core of HR, but today, employee experience and talent intelligence systems are equally important according to a recent article from industry analyst Josh Bersin. Startups and established players alike are figuring out innovative ways to use big data analytics, machine learning and AI to help organizations find the right candidates for the right roles.
Today, the truth is that HR drives productivity, revenue, and employee engagement by relying heavily on new tools driven by data and science. This helps mitigate the effects of biases in the hiring process, reduces mishires, improves retention rates, and improves Quality of Hire. In turn, this contributes to DEI outcomes, overall business productivity, and ultimately the bottom line. Talent strategy is business strategy.