Study: HR Departments Getting Pushed Into Non Traditional Roles

December 10, 2003 ( - Fresh from an economic downturn and continual personnel downsizings, a key issue for many HR departments these days is finding ways to improve corporate productivity.

According to Towers Perrin’s TP Track Survey: Tougher Times, Tougher HR, the heightened productivity emphasis has come about as business begins to pick up and employers once again focus on managing growth.

“Employee performance is again rising to the top of the business agenda. Executives are aware of the toll the recession and downsizing have taken on morale and employee engagement and they’re looking to HR to help reengage all employees and focus them on performing at peak levels on a sustained basis,” said David Rhodes, a Towers Perrin principal who specializes in HR strategy and management, in a statement. “Helping meet this challenge is one of the key drivers of change for the function.”

Other key areas of focus for HR are controlling health-care costs and retaining key talent (at 46% and 44%, respectively). The focus on talent is consistent with the focus on performance since keeping top performers is one of the primary ways HR can deliver on the goal of greater productivity, Towers Perrin said.

HR professionals may be getting calls for them to branch out into non-traditional areas, but that doesn’t mean they’re happy with the new assignments. Despite a focus on building stronger strategic partnerships with line managers, the majority of HR professionals believe that they are most effective in helping their organizations address the more traditional HR needs, such as compensation and benefit-design implementation. Respondents felt they were less effective in dealing with the more nontraditional HR issues, such as helping organizations globalize operations, where only 17% rated their function as effective.

This is partly due to the fact that many of the respondents are at the early stages of building their departments’ skills in nontraditional areas, such as business and financial acumen (where only 17% and 14%, respectively, say their function currently has such skills). However, HR departments realize that expanding their offerings outside traditional areas will help them realize their goal of a strategic business partnership within their organizations.

Generally, respondents agree that their staffs are feeling pressured and under stress, a finding consistent with the increased demands placed on the function today. Fifty-four percent felt their staff faced greater job stress today than 18 months ago, and 57% agreed their staff’s day-to-day workload had increased. However, respondents saw improvements for their staffs in two areas: level of job challenge and increased interaction with senior management.

Three Objectives

In delivering on their agenda, HR departments are concentrating on three broad and connected objectives:

  • expanding use of technology (65%),
  • eliminating tactical work (49%) and
  • continuing to work towards a strategic partnership role with management (45%).

By contrast, only a quarter or less are investigating new organizational models as a method for addressing business needs

Whatever their focus, many HR departments will have fewer dollars with which to carry out their responsibilities. Fifty-five percent of respondents reported a budget decrease this year and, optimistically, far fewer (32%) expect a cut in 2004, indicating a hopeful outlook for business recovery. Most HR executives feel that spending in specific areas has held the line, with one exception: technology. Half of the respondents reported a budget increase for HR information systems, a finding consistent with the goal to expand the use of technology.

The survey was conducted with HR and other senior executives from midsize and large companies in the US and Canada with $1 billion or more in revenue. More than 265 HR executives responded to the survey.

An executive summary is availabel here .