A little over 10 years ago, when I was working as an assistant manager in my former company’s payroll department—where many of the traditional human resources (HR) functions were handled by my staff—I often wondered, “well, if we’re doing all of this stuff, what are the people in HR doing?” I often joked with my fellow coworkers that it seemed (to me) that outside of handling employee paperwork and forwarding resumes to prospecting departments, all HR did was organize parties, baseball games, company BBQ’s, and hand out the occasional basket of “whatever” every time some poor sucker reached the five-, ten-, or 15-year mark of service. “Wow, what a great job,” I thought. “I’d like to do that and get paid for it!”

While this view of an HR department was from my personal experience, over the years I’ve had similar discussions with both colleagues and professionals from various departments and industries. Interestingly enough, I kept hearing the same thing over and over again. “What do people in HR really do anyway?” they would say. Some went as far as to complain that HR seemed to care more about protecting the company’s interests than about effectively handling employee concerns.

Well, being a few years older—and hopefully a tad bit wiser—I’m now a research analyst for Technology Evaluation Centers (TEC). In this position, I’ve spent a fair bit of time finding out exactly what HR’s roll within an organization is. To my amazement, it’s a lot more than one might think.

Human Resources: Then and Now

Up until fairly recently, HR had a very administrative function. It was mainly responsible for staffing and personnel-related issues, such as recruiting and hiring, establishing employment policies, handling pay and retirement plans, and administering benefits. HR personnel spent the better part of their days updating employee files, calculating employee statistics, processing applications, training employees, and terminating the ne’er-do-wells.

Today, HR is so much more. The very people my colleagues and I used to poke fun at are now helping their organizations transform HR from the low-priority function it once was into a strategic and vital part of the business.

So what’s fuelling this sudden transformation?

It’s the fact that company executives are now beginning to understand the critical link between their people and the bottom line. To remain competitive in today’s job market, companies are realizing that they need to know more about their employees—what they’re doing, what their skills are, how they’re progressing, and (more importantly) how they will fit into the future of the business.

Company and HR executives that continue to view HR as strictly a department of administrative service, and that fail to infuse HR functions throughout the organization, will surely end up limiting their strategic growth.

The Winds of Change

Gone are the days where people stay at a job for 20 years or more. Today, it’s simply unheard of! There are so many great opportunities for talented and skilled individuals out there that job seekers are beginning to take a much closer look at what’s in it for them. According to a recent survey conducted by Harris Interactive for CareerBuilder.ca, 33 percent of Canadian workers plan to leave their current positions within one year, and 48 percent expect to seek a new position within two years.

So what does that mean? It means that companies—and their HR executives—must pay heed…

People Are Paramount: Building Human Capital

Building human capital. Today, it’s all the rage—a buzzword that we hear often. But what does it really mean?

Building human capital is investing time, energy, and other resources into developing employee abilities, skills, and knowledge. Two of the main reasons HR executives must focus on building their companies’ human capital are

• the aging workforce, as baby boomers are retiring and the labor pool of skilled workers is shrinking fast
• fierce competition in the wake of globalization and the changing HR landscape

Employers need to focus their efforts on getting the best people in their doors in order to drive up their retention numbers. But the issue of retention should not be a priority for HR executives only; it should be a company-wide concern as well.

Employers in every industry need to respond to the changing face of the workplace, given the challenges they must meet to remain competitive internationally and to sustain a productive labor market.

That being said, company executives can no longer deny the fact that this is an area where HR can add more value—crafting corporate culture rather than processing paperwork and doing data entry.

Diversification Is Key

Somewhere, somehow, there are a few organizations getting it right. People are becoming such an important part of the big corporate picture that Canadian organizations are doing everything they can to recruit, train, and retain top talent. This includes incorporating diversity as part of their business strategy.

Diversity makes good business sense, especially for companies that generate revenue outside of the country. Hiring individuals from various backgrounds, who have a broad range of skills, and who know several languages, is a sound strategy for growth for any global business.

In a recent article published in the Montreal Gazette entitled “Embracing Diversity,” CanWest News Service columnist Derek Sankey highlights the importance of diversification in the workforce, and notes how more and more Canadian employers are recognizing the tight labor market and how they are making significant changes to the way they are hiring staff. Whether it’s related to gender, age, cultural background, or level of education, Canadian employers are tapping into all aspects of diversity. Hopefully this trend will encourage other companies across North America and beyond to adopt similar best practices.

Canadian companies recently competed to become part of the list that makes up the top 25 diversified employers in Canada. The competition aimed to recognize workplace diversity and inclusiveness initiatives, and competitors could either submit their own names or be nominated by third parties.

To see a list of Canada’s Top 25 Best Diversity Employers, go to http://www.canadastop100.com/diversity/

What Else Can Companies Do?

In order to stay competitive, companies must change their recruitment, retention, and workforce management strategies to maintain a supply of skilled personnel in a rapidly shrinking labor pool.

Some things that companies can do to significantly increase the efficiency and responsiveness of their HR department and improve the overall quality of HR management are

• offer flexible working hours
• provide workers with a competitive compensation package
• offer growth opportunities within the organization in order to retain top employees
• provide training and developmental opportunities, and gear training toward meeting the growing needs of the economy
• provide employees with Internet-based self-service access to their HR information (for example, address, dependants, benefits, payroll information, and education) and to incorporate HR information (such as job openings or training enrolment)

To better understand how you can drive up your company’s retention numbers, check out P.J. Jakovljevic’s five-part series “Thou Shalt Motivate and Reward Workforce Better,” including his article “Thou Shalt Manage Human Capital Better.” In this series, he discusses the importance of human capital management and how organizations can leverage technology to help them achieve their strategic goals.

HR—Moving Forward

HR staff is so much more now than the mere paper pushers they once were. They are on their way to becoming the backbone of their company’s corporate culture. And with the right executive support and the proper technology, HR departments worldwide can be the change.

So, for all of you sceptics out there (like I was 10 years ago), give your HR staff a break and the recognition they deserve—as often as you can.

One thing is for certain, they are no longer the butt of my jokes around the office.