Will departments shrink as consultants move HR out-of-house?
There are signs that the powerful forces transforming the business world are impacting how and where HR professionals will find work in the years ahead, according to a new study by career transition and HR consulting firm DBM.
Innovations in technology and the growing trend toward business process outsourcing are transforming how HR services are delivered.
“It’s possible that in the near future, careers in HR will be as easily started and pursued in HR specialty firms as they once were in HR departments,” states the report from DBM, Careers in Human Resources: Choices and Challenges. It goes on to point out that already the skills and experiences needed by HR professionals are very different than they were 10 years ago and changes will continue to reshape the HR field.
The survey studied the career transition of more than 500 HR professionals from 23 countries, three-quarters of whom were looking for new work due to reorganization, merger or acquisition, workforce reduction or downsizing.
Like most departments and business functions, many HR operations are under pressure to contain costs, said Shari Fryer, vice-president of marketing for DBM.
Outsourcing is one of the most influential business trends and that is affecting HR too. A good indication of that is the significant number of people in HR going into consulting or taking work with an HR services provider, she said. Of those people choosing to switch industries, more people made the move to consulting than any other industry.
Another recent survey out of the United States, conducted by the Institute of Management and Administration, revealed many organizations are looking to streamline processes to contain costs. Nearly 63 per cent said this was an important cost reduction strategy.
As already-lean HR departments are faced with new projects, they increasingly look to outsource it, said Ann MacDonald, vice-president for DBM, Atlantic Region.
If, in fact, outsourcing becomes more popular, employers of HR professionals could increasingly be HR service providers rather than organizations with HR departments.
At the same time, the effects of the growing use of technology designed to reduce workloads of HR departments are still being felt. For example, research conducted by software consulting firm Cedar, revealed companies that successfully implemented employee self service had an HR-to-employee ratio of 1-150, while those without self service had a ratio of 1-99. (For more information on how technology is transforming, click on the link below).
“There is no doubt that we are a profession that is going through a lot of change, and it is going to get worse,” said Brian Orr, vice-president of HR learning and communications at the London Health Sciences Centre in Ontario and a Canadian HR Reporter columnist.
He said the number of people doing HR administrative and transactional work in HR departments could decrease, however, he expected the number of people doing consultative and strategic work will increase. HR departments could actually grow in size, he said.
“You have to have an intimate knowledge of the organization and that is the piece that is very hard to buy from outside the organization,” he said.
McDonald also said that while more people may be going into consulting, that may not necessarily translate into smaller HR departments, but those people who work in HR departments will need to be able to make a strategic impact.
As for the many people opting to go into independent consulting, Orr said it may also be because of burnout. People who are tired of working in pressure cooker environments decide to work for themselves for a while. Orr himself worked as an independent consultant for a year after growing unhappy about the pressures at his previous organization.
The good news, according to the DBM research, is that HR professionals are ideally suited to make the change to a new employer. The skills and knowledge that HR professionals possess are highly transferable, more so than those of professionals in other functions, said Fryer.
Almost 90 per cent of respondents to the DBM study changed industries in order to find a new job. When switching industries, the median time for a job search was 3.5 months (versus four months for those who stayed in their industry), however just 54 per cent of those who switched industry did so for a bigger or the same salary (versus 64 per cent who stayed in the same industry).
One of the other big issues emerging for HR professionals is the increasing demand for HR people who can show they have had a positive impact on the bottom line at their previous position, said Fryer.
“HR professionals must demonstrate a firm command of the organization’s operating realities. The only HR initiatives that will survive boardroom scrutiny are those that promise to respond effectively to industry challenges and opportunities,” states the report.
A good indication of the growing business savvy of many HR professionals was that more than one-quarter (29 per cent) of the study respondents chose to leave HR altogether, said Fryer. Six per cent actually moved into chief executive positions and another five per cent went into marketing and sales.
Networking remains, by far, the most effective way for HR professionals to find new opportunities with 57 per cent of all respondents saying they received a job offer that way. While, just 16 per cent said search agencies got them a job offer.
Innovations in technology and the growing trend toward business process outsourcing are transforming how HR services are delivered.
“It’s possible that in the near future, careers in HR will be as easily started and pursued in HR specialty firms as they once were in HR departments,” states the report from DBM, Careers in Human Resources: Choices and Challenges. It goes on to point out that already the skills and experiences needed by HR professionals are very different than they were 10 years ago and changes will continue to reshape the HR field.
The survey studied the career transition of more than 500 HR professionals from 23 countries, three-quarters of whom were looking for new work due to reorganization, merger or acquisition, workforce reduction or downsizing.
Like most departments and business functions, many HR operations are under pressure to contain costs, said Shari Fryer, vice-president of marketing for DBM.
Outsourcing is one of the most influential business trends and that is affecting HR too. A good indication of that is the significant number of people in HR going into consulting or taking work with an HR services provider, she said. Of those people choosing to switch industries, more people made the move to consulting than any other industry.
Another recent survey out of the United States, conducted by the Institute of Management and Administration, revealed many organizations are looking to streamline processes to contain costs. Nearly 63 per cent said this was an important cost reduction strategy.
As already-lean HR departments are faced with new projects, they increasingly look to outsource it, said Ann MacDonald, vice-president for DBM, Atlantic Region.
If, in fact, outsourcing becomes more popular, employers of HR professionals could increasingly be HR service providers rather than organizations with HR departments.
At the same time, the effects of the growing use of technology designed to reduce workloads of HR departments are still being felt. For example, research conducted by software consulting firm Cedar, revealed companies that successfully implemented employee self service had an HR-to-employee ratio of 1-150, while those without self service had a ratio of 1-99. (For more information on how technology is transforming, click on the link below).
“There is no doubt that we are a profession that is going through a lot of change, and it is going to get worse,” said Brian Orr, vice-president of HR learning and communications at the London Health Sciences Centre in Ontario and a Canadian HR Reporter columnist.
He said the number of people doing HR administrative and transactional work in HR departments could decrease, however, he expected the number of people doing consultative and strategic work will increase. HR departments could actually grow in size, he said.
“You have to have an intimate knowledge of the organization and that is the piece that is very hard to buy from outside the organization,” he said.
McDonald also said that while more people may be going into consulting, that may not necessarily translate into smaller HR departments, but those people who work in HR departments will need to be able to make a strategic impact.
As for the many people opting to go into independent consulting, Orr said it may also be because of burnout. People who are tired of working in pressure cooker environments decide to work for themselves for a while. Orr himself worked as an independent consultant for a year after growing unhappy about the pressures at his previous organization.
The good news, according to the DBM research, is that HR professionals are ideally suited to make the change to a new employer. The skills and knowledge that HR professionals possess are highly transferable, more so than those of professionals in other functions, said Fryer.
Almost 90 per cent of respondents to the DBM study changed industries in order to find a new job. When switching industries, the median time for a job search was 3.5 months (versus four months for those who stayed in their industry), however just 54 per cent of those who switched industry did so for a bigger or the same salary (versus 64 per cent who stayed in the same industry).
One of the other big issues emerging for HR professionals is the increasing demand for HR people who can show they have had a positive impact on the bottom line at their previous position, said Fryer.
“HR professionals must demonstrate a firm command of the organization’s operating realities. The only HR initiatives that will survive boardroom scrutiny are those that promise to respond effectively to industry challenges and opportunities,” states the report.
A good indication of the growing business savvy of many HR professionals was that more than one-quarter (29 per cent) of the study respondents chose to leave HR altogether, said Fryer. Six per cent actually moved into chief executive positions and another five per cent went into marketing and sales.
Networking remains, by far, the most effective way for HR professionals to find new opportunities with 57 per cent of all respondents saying they received a job offer that way. While, just 16 per cent said search agencies got them a job offer.
