Professional Documents
Culture Documents
HR's Evolving Role in Organizations
HR's Evolving Role in Organizations
Project Team
Project leader:
Project contributors:
External reviewers and contributors: SHRM Organizational Development Special Expertise Panel: Libby Anderson, M.S.,
SPHR, Fernn R. Cepero, PHR, Tom Darrow, Nancy Gerhardt Davies, Ernest Gundling,
Charity Hughes, MSOD, SPHR, John Lewison, SPHR, Colleen Mills, Ph.D., Ken
Moore, Maggie Romance, SPHR, Trellis Usher-Mays, Bill Young, SPHR
HR Consulting/Outsourcing Special Expertise Panel: Franchette Z. Richards, GPHR,
GMS, CRP
Copy Editing:
Design:
Production:
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2008 Society for Human Resource Management. All rights reserved. Printed in the United States of America.
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Contents
About This Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
About SHRM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Key Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Survey Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Critical HR Functional Areas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
HR Responsibility Sourcing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
In-House HR Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Partially Outsourced HR Responsibilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Completely Outsourced HR Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Decisions About Sourcing HR Responsibilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Assignment of HR Responsibilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
HR Function/Department Staffing Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
HRs Role Within the Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Strategic vs. Transactional Role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
HR Mentoring. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
HRs Impact. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
HR Metrics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Tracking Staff Hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Obstacles to HR Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Endnotes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Recently Published SHRM Survey Products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Introduction
Understanding how
HR is approached
in the context of
the organization in
which it operates
is crucial to
understanding how
HR contributes to
business strategies
and the value that
it is poised to bring
to the organization.
Methodology
Key Findings
The top three critical HR functional areas that contributed to organizations current
business strategies were 1) staffing, employment and recruitment, 2) training and
development, and 3) employee benefits.
Among HR professionals who indicated that staffing, employment and recruitment was
one of their organizations top three critical HR functional areas, more than one-half
reported that it was their first priority.
The HR responsibilities most likely to be staffed in-house were performance
management, employee communication plans/strategies, policy development and/or
implementation, and strategic business planning. The HR responsibilities that were
most likely to be outsourced were employee assistance/counseling and flexible spending
account administration.
One-half of HR professionals reported that their organizations business strategy
contributed to the decision of whether to staff, outsource or eliminate various HR roles
and responsibilities, suggesting an alignment of HR function staffing decisions with
business operating plans.
The largest percentage of HR professionals from organizations that intended to expand
their HR departments in the next 12 months reported that their decision to hire
additional HR staff was due to the HR department/function being understaffed for
current number of employees within the organization.
Slightly less than one-half of HR professionals reported that their organizations had
formal (i.e., documented and established) systems and processes in place for collecting
HR metrics and/or measurement data. Among these, slightly more than one-half
reported formally calculating the impact of HR activities on measurable aspects of
business performance.
The largest percentages of HR professionals reported that HRs effectiveness was
limited by the budget and headcount available for HR initiatives.
Survey Results
52%
Training/development
29%
Employee benefits
29%
Employee relations
27%
Strategic planning
27%
Administrative/transactional
18%
Change management
17%
Compensation
15%
Organizational development
15%
Legal compliance
13%
Communications
10%
Workforce planning/forecasting
10%
9%
8%
Diversity
7%
Labor/industrial relations
6%
5%
EEO/Affirmative Action
3%
International HRM
1%
Research
0%
Other
1%
Note: Data sorted in descending order. Percentages do not total 100% due to multiple response options.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
Table 2 | Critical HR Functional Areas Contributing to the Organizations Current Business Strategy (by Organization Staff Size)
Overall
(n = 582)
Small
Medium
(1 to 99 employees) (100 to 499 employees)
(n = 142)
(n = 177)
Large
(500+ employees)
(n = 138)
Employee benefits
29%
35%
27%
20%
Strategic planning
27%
19%
28%
34%
Administrative/transactional
18%
25%
19%
11%
Legal compliance
13%
19%
11%
7%
9%
6%
8%
14%
Diversity
7%
2%
5%
10%
Note: Data sorted in descending order by overall column. Sample size is based on the actual number of respondents by organization staff size who answered this question
using the response options provided.
Table includes only response options for which there were significant differences.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
Differences by
Organization
Staff Size
Related Research
SHRM recently reviewed previously
is approached by organizations of
workforce sizes.
of organization functions.
Extent to Which HR Department Strategically Contributes to Organization Functions (by Organization Staff Size)
Overall
(n = 419)
Small
(1-99 employees)
(n = 111)
Medium
(100-499 employees)
(n = 174)
Large
(500+ employees)
(n = 120)
Differences by
Organization
Staff Size
94%
88%
97%
95%
Note: Table includes only response options for which there were significant differences between organization staff-size categories. Sample size is based on the actual number of
respondents by organization staff size who answered this question using the response options provided. Percentages include responses of to some extent and to a large extent. HR
professionals who responded not sure or not applicable were excluded from this analysis.
Source: SHRM 2006 Strategic HR Management Survey Report
for-profit organizations (21%) to report that strategic planning was among the top three
critical HR functional areas contributing to their organizations business strategy. Labor
and industrial relations were more likely to be among the top three critical HR functional
areas for government agencies (24%) than for publicly owned for-profit organizations (3%)
or privately owned for-profit organizations (3%).
Table 3 | C
ritical HR Functional Areas Contributing to the Organizations Current Business Strategy (by Organization Sector)
Overall
(n = 582)
Nonprofit
(n = 71)
Government
(n = 42)
Differences by Organization
Staff Size
Employee benefits
29%
18%
31%
37%
14%
Strategic planning
27%
36%
21%
30%
29%
Labor/industrial
relations
6%
3%
3%
6%
24%
Note: Data sorted in descending order by overall column. Excludes other organization sectors. Sample size is based on the actual number of respondents by organization sector who answered
this question using the response options provided. Table includes only response options for which there were significant differences.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
Table 4 | Priority Ratings of Critical HR Functional Areas Contributing to the Organizations Current Business Strategy
First
Second
Third
Staffing/employment/recruitment (n = 266)
57%
23%
20%
Training/development (n = 144)
18%
44%
38%
18%
39%
43%
56%
25%
19%
26%
37%
37%
Administrative/transactional (n =92)
23%
28%
49%
36%
33%
31%
Compensation (n = 77)
31%
44%
25%
26%
39%
35%
50%
38%
12%
Communications (n = 53)
30%
36%
34%
24%
33%
43%
22%
36%
42%
37%
37%
26%
Diversity (n = 35)
37%
31%
31%
28%
24%
48%
12%
27%
62%
Note: Data sorted in descending order by number of respondents who indicated that each HR functional area was among the top three areas critical to their organizations current business strategy.
Rankings for each of the HR functional areas include only respondents who indicated that it was a top critical HR functional area contributing to the organizations business strategy. Only critical
functional areas that at least 25 respondents selected as a top priority are included in table. Row percentages may not total 100% due to rounding.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
HR professionals were asked to rank the priority of their organizations top three critical
HR functional areas. Of the respondents who indicated that staffing/employment/
recruitment was a critical HR functional area, more than one-half (57%) reported that it
was the top-ranked priority for their organizations. More than one-half of respondents
(56%) who selected strategic planning as a critical HR functional area ranked it as the
top priority for their organizations. One-half of HR professionals (50%) who indicated
that legal compliance was one of their organizations top three critical HR functional
areas rated it as the first priority.
Among those who identified training and development as a critical HR functional
area, the largest percentage of HR professionals (44%) reported that it was the second
priority for their organizations. Of the HR professionals who indicated employee
benefits as a critical HR functional area, 43% responded that it was the third-ranked
priority within their organizations. These data and others depicted in Table 4 reflect
organizations workforce development philosophies as well as the predominant HR
functional areas to which organizational resources may be allocated.
SHRM Organizational Development Special Expertise Panel member Fernn Cepero,
PHR, vice president of human resources for YMCA of Greater Rochester, offers, The
results are indicative of a Generation Y trend that is intertwined. Allow me to explain:
The first critical area confirms the challenge HR professionals have in recruiting and
retaining Generation Y employees. The decision to accept a job offer involves many
factors for Generation Y. A good job is no longer defined by monetary gains alone. Gen Y
employees take a job because they want to work somewhere, not because they have to.
The second critical area validates the first point in that training and development initiatives
must appeal Generation Ys desire to learn and involve the application of high-technology
mediums, such as online media (i.e., webcasts, videos, podcasts, blogs, instant messaging).
Recruiting efforts must now highlight paid training and skill development.
The third and finalbenefitsrequires HR to attract/sell Generation Y on benefits
such as flexible schedules, telecommuting and full tuition reimbursement. While all
employees think the benefits they receive as a part of their compensation packages are
an important factor in rating job satisfaction, what type of benefit they value is entirely
different. Gen Y employees dont necessarily plan to stay at a company very long, and
both Gen Y and Gen X employees grew up without expectations of job security, so HR
professionals do not expect to win their loyalty by talking about traditional benefits
such as pension vesting or funeral leaves. To motivate these generations, focus more on
the benefits they value mostflexibility to balance work and life.
HR Responsibility Sourcing
Which HR responsibilities are carried out in-house and which are outsourced, either
partially or completely? Table 5 depicts the sourcing of common HR responsibilities.
The vast majority of organizations that carry out performance management (94%),
employee communication plans/strategies (93%), policy development and/or
implementation (91%), strategic business planning (90%) and compensation and/
Outsource Partially
Outsource Completely
94%
5%
1%
93%
6%
1%
91%
8%
1%
90%
8%
2%
85%
13%
2%
82%
12%
6%
78%
21%
1%
78%
21%
1%
76%
20%
4%
61%
33%
7%
59%
30%
11%
59%
31%
10%
57%
26%
18%
54%
36%
10%
54%
40%
6%
54%
42%
4%
53%
31%
17%
40%
38%
22%
36%
18%
46%
36%
50%
14%
34%
46%
21%
33%
40%
27%
30%
45%
25%
26%
22%
52%
25%
45%
31%
24%
44%
33%
23%
49%
28%
17%
21%
62%
15%
25%
60%
Note: Data sorted in descending order by completely in-house column. HR professionals who responded not applicable were excluded from analysis. Row percentages may not total 100% due
to rounding.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
10
Top 5 Insourced
HR Responsibilities
1) Performance management
2) Employee communication plans/
strategies
3) Policy development and/or
implementation
4) Strategic business planning
Views of HRs role within the organization may also influence which functions are
outsourced. Comments Franchette Richards, GPHR, GMS, CRP, member of SHRMs
HR Consulting/Outsourcing Special Expertise Panel, Human resource functions
Related Research
Although critical HR functional
HR professionals perceptions of
practices.
Average Degree That Various HR Practices Add Value to the Business (by Organization Staff Size)
Small
(1-99 employees)
(n = 26)
Medium
(100-499 employees)
(n = 36)
Large
(500+ employees)
(n = 381)
Differences
by Organization
Staff Size
4.24
4.11
3.76
Performance appraisal
3.72
4.22
3.74
Internal communication
3.72
4.19
3.63
Organization structure
3.44
4.00
3.59
Workplace policies
3.88
4.42
3.87
3.24
3.63
3.20
Note: Based on a scale where 1 = to a very little extent and 5 = to a very large extent. Greater numbers indicate greater average degrees that various HR practices add value to the
business. Sample size is based on the actual number of respondents by organization staff size who answered this question using the response options provided.
Source: RBL Group, University of Michigan Ross School of Business, SHRM, IAE School of Business, IMI, Tsinghua University, AHRI, and the National HRD Network. 2007 Human Resource
Competency Study [unpublished data]
11
that affect a companys strategy, the overarching company culture or the organization
as a whole typically remain seated at the center of HR leadership. True organizational
effectiveness is not measured by the successful execution of a companys employee
assistance program nor how it administers its flexible spending accounts. While these
are very important HR functions that clearly serve an organizations employees,
these functions are more tactical in nature and not, in a strategic sense, impactful to
the achievement of business goals and objectives. In short, transactional excellence is
necessarybut no longer sufficientfor HR today. From evaluating the survey results
and reviewing ongoing commentary in the HR and business media, it has become
clearer that HR functions that are viewed as tactical are some of the first components
to be outsourced. There are exceptionsareas that are so key, so strategic (such as
leadership development/executive coaching, succession planning, employee relations)
that they must remain in-house. However, the key differentiator for HR will be whether
they are viewed as tactical or strategic.
Numerous differences emerged in the sourcing of HR responsibilities when the data
were analyzed by organization staff size and organization sector. These findings are
shown in Table 6 through Table 11.
Top 5 Completely
Outsourced HR
Responsibilities
1) Employee assistance/counseling
2) Flexible spending account
administration
3) Background/criminal background
checks
4) Consolidated Omnibus Budget
Reconciliation Act (COBRA)
5) Pension benefits administration
In-House HR Responsibilities
Table 6 | HR Responsibilities Staffed Completely In-House (by Organization Staff Size)
Overall
Small
(1 to 99 employees)
Medium
(100 to 499 employees)
Large
(500+ employees)
Differences
by Organization
Staff Size
91%
84%
93%
96%
90%
95%
89%
83%
78%
85%
80%
71%
59%
50%
54%
73%
56%
78%
56%
46%
54%
63%
51%
41%
36%
50%
33%
28%
33%
44%
32%
26%
30%
39%
29%
22%
23%
20%
30%
15%
17%
29%
13%
11%
Note: Data sorted in descending order by overall column. Table includes only response options for which there were significant differences. Sample size is based on the actual number of
respondents who indicated that their organization supported each HR responsibility.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
12
13
Nonprofit
Government
Differences by
Organization Sector
59%
60%
53%
62%
76%
57%
36%
65%
76%
87%
Recruitment/staffing of executives
(n = 264)
54%
38%
56%
61%
61%
Recruitment/staffing of employees
(nonexecutives) (n = 397)
54%
74%
75%
90%
86%
53%
43%
54%
67%
44%
40%
28%
39%
64%
34%
36%
31%
31%
51%
56%
33%
23%
38%
43%
25%
30%
19%
30%
45%
45%
Background/criminal background
checks (n = 120)
26%
15%
25%
38%
43%
Note: Data sorted in descending order by overall column. Excludes other organization sectors. Table includes only response options for which there were significant differences. Sample size is
based on the actual number of respondents who indicated that their organization supported each HR responsibility.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
Small
(1 to 99 employees)
Medium
(100 to 499 employees)
Large
(500+ employees)
Differences by Organization
Staff Size
50%
36%
50%
60%
Risk management/workers
compensation (n = 221)
46%
37%
49%
52%
40%
32%
46%
41%
Recruitment/staffing of executives
(n = 199)
40%
32%
41%
53%
8%
14%
6%
4%
8%
2%
10%
14%
Note: Data sorted in descending order by overall column. Table includes only response options for which there were significant differences. Sample size is based on the actual number of
respondents who indicated that their organization supported each HR responsibility.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
14
Publicly Owned
For-Profit
Privately Owned
For-Profit
Nonprofit
Government
Differences by
Organization Sector
44%
32%
51%
48%
32%
Recruitment/staffing of
executives (n = 199)
40%
54%
39%
31%
37%
Wellness programs
(n = 144)
38%
47%
39%
21%
44%
30%
33%
26%
24%
50%
Employee relocation
(n = 75)
26%
35%
19%
24%
13%
Recruitment/staffing of
employees (nonexecutives)
(n = 104)
21%
25%
24%
9%
14%
Note: Data sorted in descending order by overall column. Excludes other organization sectors. Table includes only response options for which there were significant differences. Sample size is
based on the actual number of respondents who indicated that their organization supported each HR responsibility.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
15
(31% and 21%, respectively). Respondents from publicly owned for-profit organizations
(35%) were more likely than those from privately owned for-profit organizations (19%)
to report partially outsourcing responsibilities related to employee relocation. HR
professionals from publicly owned for-profit organizations (25%) and privately owned forprofit organizations (24%) were more likely than those from nonprofit organizations (9%)
to report that recruitment/staffing of nonexecutive employees was partially outsourced.
Small
(1 to 99 employees)
Medium
(100 to 499 employees)
Large
(500+ employees)
Differences by
Organization Staff Size
62%
49%
65%
70%
60%
51%
62%
68%
25%
20%
21%
37%
18%
5%
19%
26%
10%
14%
10%
2%
Note: Data sorted in descending order by overall column. Table includes only response options for which there were significant differences. Sample size is based on the actual number of
respondents who indicated that their organization supported each HR responsibility.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
Publicly Owned
For-Profit
Privately Owned
For-Profit
Nonprofit
Government
Differences by
Organization Sector
Background/criminal
background checks (n = 240)
52%
64%
55%
45%
19%
46%
48%
52%
33%
28%
33%
44%
29%
23%
37%
27%
39%
24%
11%
35%
25%
39%
23%
15%
18%
18%
29%
15%
0%
0%
Note: Data sorted in descending order by overall column. Excludes other organization sectors. Table includes only response options for which there were significant differences. Sample size is
based on the actual number of respondents who indicated that their organization supported each HR responsibility.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
16
Table 10 shows the differences in the percentages of organizations by staff size that
reported completely outsourcing various HR responsibilities. HR professionals from
large- and medium-staff-sized organizations were more likely than those from smallstaff-sized organizations to report completely outsourcing employee assistance/
counseling (70% and 65% compared with 49%, respectively) and employee relocation
(26% and 19% compared with 5%). Large organizations (68%) were more likely than
small organizations (51%) to report completely outsourcing flexible spending account
administration and were also more likely than either medium or small organizations
(37% compared with 21% and 20%, respectively) to report completely outsourcing
temporary staffing. By contrast, HR professionals at small organizations (14%)
and medium organizations (10%) were more likely than their counterparts at large
organizations (2%) to report completely outsourcing payroll administration.
HR professionals from publicly owned for-profit organizations (64%), privately owned
for-profit organizations (55%) and nonprofit organizations (45%) were more likely than
their counterparts at government agencies (19%) to report completely outsourcing
background/criminal background checks. Respondents from privately owned for-profit
organizations (52%) were more likely than those from nonprofit organizations (33%)
or government agencies (28%) to report completely outsourcing responsibilities related
to COBRA. HR professionals from publicly owned for-profit organizations (44%)
were more likely than those from nonprofit organizations (23%) to report completely
outsourcing pension benefits administration. Employee relocation was more likely to
be completely outsourced by publicly owned for-profit organizations (29%) than by
privately owned for-profit organizations (15%). HR professionals from publicly owned
for-profit organizations (39%) were more likely than those from privately owned forprofit organizations (24%) and those from publicly owned for-profit organizations
and government agencies (both 35%) were more likely than their counterparts at
nonprofit organizations (11%) to report completely outsourcing health care benefits
administration. According to HR professionals, temporary staffing was more likely to
be completely outsourced by publicly owned for-profit organizations (39%) than by
privately owned for-profit organizations (23%) or nonprofit agencies (15%). These data
are shown in Table 11.
Decisions About Sourcing HR Responsibilities
Given the myriad HR functional areas and the limits to most organizations HR
department/function headcount, what factors contribute to decisions about sourcing
HR responsibilities? When asked how their organizations determine which HR roles
and/or responsibilities will be staffed within the organization rather than outsourced
or eliminated, the largest percentage of HR professionals (50%) reported that the
organizations business strategy contributes to the decision. These data are shown
Figure 1. This suggests that for a substantial percentage of organizations, HR function
staffing decisions are aligned with business operating plans, providing support for a
strategic partnership between HR and the organization as a whole. The next two largest
percentages of HR professionals reported that competencies of HR staff (45%) and the
organizations workforce management needs (40%) determined which specific HR roles
17
Figure 1 | How Do Organizations Decide Which HR Roles and/or Functional Areas Will Be Staffed?
50%
45%
Competencies of HR staff
40%
36%
23%
20%
11%
11%
(n = 509)
Note: Percentages do not total 100% due to multiple response options.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
18
customers business and industry and not simply our functional HR expertise. The more
closely aligned HR is to the organizations strategic objectives, the more value it can add
and the less we have to worry about being outsourced or eliminated.
Organization staff size has an impact on factors determining which HR roles and
functional areas will be staffed within the organization. HR professionals from large
organizations (46%) were more likely than their counterparts from small organizations
(25%) to report that the HR departments staffing budget was a factor in determining
which HR roles/functional areas would be staffed. This finding may be related to the
prevalence of HR specialists versus HR generalists in large organizations compared
with small organizations. In addition, large organizations were more likely than small
organizations or medium organizations to report that an internal audit or review of
HR processes (32% compared with 13% and 16%, respectively) or HR consultant
evaluations and/or advice (19% compared with 8% and 6%, respectively) contributed to
their organizations decisions about staffing HR roles and/or functional areas. These
findings are not surprising, given that large organizations may have more of a need as
well as more resources such as time and money to allow them to undertake a formal
internal audit of HR processes or contract the services of HR consultants to review HR
processes. These data are depicted in Table 12.
Organization sector also had an impact on factors determining the HR roles and/or
functional areas to be staffed (Table 13). An organizations business strategy factored
into decisions about HR role/functional area staffing for 62% of publicly owned forprofit organizations compared with 45% of privately owned for-profit organizations
and 38% of government agencies. Publicly owned for-profit organizations may be
more likely to expect operating plan alignment across the organizations divisions
and departments, including human resource functions. More than two-thirds of HR
professionals from government agencies (69%), compared with only about one-third
of HR professionals from publicly owned for-profit organizations (35%), reported
that competencies of HR staff were a factor in determining staffing of HR roles and/
or functional areas. This suggests that, to a certain extent, HR professionals who are
employed in the government sector may have some degree of influence over the HR
Table 12 | Factors Determining the HR Roles and/or Functional Areas to Be Staffed (by Organization Staff Size)
Overall
(n = 509)
Small
(1 to 99 employees)
(n = 131)
Medium
(100 to 499 employees)
(n = 167)
Large
(500+ employees)
(n = 134)
Differences
by Organization
Staff Size
36%
25%
37%
46%
20%
13%
16%
32%
11%
8%
6%
19%
Note: Data sorted in descending order by overall column. Percentages do not total 100% due to multiple response options. Sample size is based on the actual number of respondents by
organization staff size who answered this question using the response options provided. Table includes only response options for which there were significant differences.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
19
responsibilities that will be staffed in-house through the experience that they bring to
and/or attain in the position. HR consultant evaluations and/or advice determined
staffing for HR roles and/or functional areas for 18% of publicly owned for-profit
organizations compared with 8% of privately owned for-profit organizations. This
finding may be due in part to publicly owned for-profit organizations having more
resources available to engage the services of HR consultants.
Assignment of HR Responsibilities
Table 13 | Factors Determining the HR Roles and/or Functional Areas to Be Staffed (by Organization Sector)
Overall
(n = 509)
Publicly Owned
For-Profit
(n = 109)
Privately Owned
For-Profit
(n = 221)
Nonprofit
(n = 65)
Government
(n = 41)
Differences by
Organization Sector
Organizations business
strategy
50%
62%
45%
52%
38%
Competencies of HR staff
45%
35%
49%
46%
69%
HR consultant evaluations
and/or advising
11%
18%
8%
7%
17%
Note: Data sorted in descending order by overall column. Excludes other organization sectors. Percentages do not total 100% due to multiple response options. Sample size is based on
the actual number of respondents by organization sector who answered this question using the response options provided. Table includes only response options for which there were significant
differences.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
20
(24%) and large organizations (1%), and medium organizations were more likely than
large organizations, to report that their organizations did not have more than one HR
staff person.6
Among organizations with multiple HR staff, differences emerged by organization staff
size in the percentages of organizations that reported that their HR staff simultaneously
handled multiple HR functional areas for the organization (Table 14). Medium
organizations (71%) were more likely than large organizations (57%) to report that their
HR staff held generalist roles. There were no significant differences by organization
sector.
More often than not, among organizations with multiple HR staff, someif not allof
these staff operate from a single location. More than two-thirds of HR professionals
from organizations with multiple HR staff (69%) reported that the organizations HR
department was primarily centralized (Figure 3). Another 21% indicated that they were
split between corporate headquarters and field offices, and only 10% reported that their
organizations HR staff were primarily decentralized.
For many organizations, HR departments/functions serve as default owners for
responsibilities that are not directly HR-related but are necessary to operations and do
not have a more suitable department match. In addition to their responsibilities related
63%
24%
9%
Other
1%
3%
(n = 361)
Note: Excludes HR professionals who responded, N/A, my organization does not have more than one HR staff person.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
21
Table 14 | F
actors Determining HR Staff Assignments of HR Roles and/or Responsibilities (by Organization Staff Size)
Overall
(n = 361)
Small
(1 to 99 employees)
(n = 50)
Medium
(100 to 499 employees)
(n = 136)
Large
(500+ employees)
(n = 138)
Differences
by Organization
Staff Size
63%
68%
71%
57%
Note: Excludes HR professionals who responded, N/A, my organization does not have more than one HR staff person. Sample size is based on the actual number of respondents by organization
staff size who answered this question using the response options provided. Table includes only response options for which there were significant differences.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
69%
21%
10%
Primarily centralized
(n = 345)
Note: Excludes HR professionals who responded, N/A, my organization does not have more than one HR staff person.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
22
Primarily decentralized
departmental duty boundaries because they are likely to have other, more appropriate
departments with available headcount for handling non-HR duties.
HR professionals from privately owned for-profit organizations (59%) as well as those
from nonprofit organizations (59%) were more likely than those from publicly owned
for-profit organizations (37%) and government agencies (26%) to indicate having
non-HR duties in addition to their HR responsibilities (Table 16). Staff size within the
sectors may have an impact on the likelihood of HR functions or departments being
tasked with non-HR related responsibilities.
HR Function/Department Staffing Changes
What are organizations planned headcount changes for the short-term future?
Although the majority of HR professionals (72%) reported that their HR staff
headcount will most likely remain the same during the next 12 months, one-quarter
of respondents (25%) indicated that their HR staff headcount will grow during that
timeframe (Figure 4). Very few organizationsjust 3%expected a decrease in HR
staff numbers. Even in a slowing economy, HR functions or departments may be more
resistant to downsizing due to the essential nature of their responsibilities on behalf of
the organizations workforce. This may be even more the case for organizations whose
HR departments or functions are comprised of generalist roles and where multiple HR
roles and responsibilities can be assigned to each HR staff person.
Overall
(n = 508)
Small
(1 to 99 employees)
(n = 141)
Medium
(100 to 499 employees)
(n = 172)
Large
(500+ employees)
(n = 138)
Differences
by Organization
Staff Size
50%
79%
48%
22%
Note: Excludes HR professionals who responded not sure to this item. Sample size is based on the actual number of respondents by organization staff size who answered this question using the
response options provided. Table includes only response options for which there were significant differences.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
Overall
(n = 508)
Publicly Owned
For-Profit
(n = 114)
Privately Owned
For-Profit
(n = 234)
Nonprofit
(n = 71)
Government
(n = 42)
Differences
by Organization Sector
50%
37%
59%
59%
26%
Note: Excludes HR professionals who responded not sure to this item and those from other organization sectors. Sample size is based on the actual number of respondents by organization sector
who answered this question using the response options provided. Table includes only response options for which there were significant differences.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
23
HR professionals from large organizations (36%) were more likely than those from
medium (21%) or small organizations (16%) to report that their organizations HR staff
headcount was expected to increase in the 12 months following the survey. Conversely,
small organizations (82%) and medium organizations (76%) were more likely than large
organizations (60%) to report that their organizations HR headcount was expected to
remain the same in the upcoming 12 months. These data are depicted in Table 17.
25%
3%
HR headcount will increase
(n = 430)
Note: Excludes HR professionals who responded not sure to this item.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
Table 17 | HR Staff Headcount Changes Expected for Next 12 Months (by Organization Staff Size)
Overall
(n = 430)
Small
(1 to 99 employees)
(n = 141)
Medium
(100 to 499 employees)
(n = 172)
Large
(500+ employees)
(n = 138)
Differences
by Organization
Staff Size
25%
16%
21%
36%
72%
82%
76%
60%
3%
2%
3%
3%
Note: Excludes HR professionals who responded not sure to this item. Sample size is based on the actual number of respondents by organization staff size who answered this question using the
response options provided.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
24
Table 18 | HR Staff Headcount Changes Expected for Next 12 Months (by Organization Sector)
Overall
(n = 430)
Publicly Owned
For-Profit
(n = 92)
Privately Owned
For-Profit
(n = 205)
Nonprofit
(n = 63)
Government
(n = 34)
25%
27%
25%
22%
18%
72%
65%
74%
76%
82%
HR headcount will
decrease
3%
8%
1%
2%
0%
Differences by Organization
Sector
Note: Excludes other organization sectors and HR professionals who responded not sure to this item. Sample size is based on the actual number of respondents by organization sector who
answered this question using the response options provided.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
25
49%
Organizational business strategy created new priorities for HR roles and/or functions
44%
43%
Unaccompplished work projects require adding staff in order to meet business goals
23%
22%
18%
16%
12%
3%
(n = 107)
Note: Includes HR professionals who indicated that their HR staff headcount would increase over the next 12 months. Percentages do not total 100% due to multiple response options.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
Table 19 | F
actors Contributing to Decision to Hire Additional HR Staff (by Organization Sector)
Overall
(n = 107)
Publicly Owned
For-Profit
(n = 25)
Privately Owned
For-Profit
(n = 52)
Nonprofit
(n = 14)
Government
(n = 6)
Differences
by Organization
Sector
12%
32%
6%
7%
0%
Note: Includes HR professionals who indicated that their HR staff headcount would increase over the next 12 months. Excludes other organization sectors. Sample size is based on the actual
number of respondents by organization sector who answered this question using the response options provided. Table includes only response options for which there were significant differences.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
26
Related Research
Results from the SHRM 2007
HR Staff Devoted Full Time to Change Management Programs (by Organization Staff Size)
HR staff devoted
full-time to change
management programs
Overall
(n = 292)
Small
(1-99 employees)
(n = 72)
Medium
(100-499 employees)
(n = 105)
Large
(500+ employees)
(n = 90)
Differences
by Organization
Staff Size
23%
12%
19%
29%
Note: Excludes HR professionals who indicated that HR was not involved in major changes in their organizations and those who responded not sure to this item.
Source: SHRM 2007 Change Management Survey Report
27
Figure 6 | How Do HR Professionals Perceive Their HR Function/Departments Role Within the Organization?
61%
33%
6%
Primarily strategic
Primarily transactional
(n = 468)
Note: Excludes HR professionals who responded not sure to this item.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
Small
(1 to 99 employees)
(n = 137)
Medium
(100 to 499 employees)
(n = 169)
Large
(500+ employees)
(n = 135)
Primarily strategic
6%
5%
4%
7%
61%
53%
63%
67%
Primarily transactional
33%
42%
33%
26%
Differences
by Organization
Staff Size
Note: Excludes HR professionals who responded not sure to this item. Sample size is based on the actual number of respondents by organization staff size who answered this question using the
response options provided.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
28
Table 21 | HR Professionals Perceptions of How Various Groups View the HR Function/Departments Role
Primarily
Strategic
Equally Strategic
and Transactional
Primarily
Transactional
HR professionals (n = 468)
6%
61%
33%
15%
54%
31%
9%
65%
26%
2%
53%
45%
2%
28%
70%
Note: Excludes HR professionals who responded not sure to this item. Row percentages may not total 100% due to rounding.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
29
Small
(1 to 99 employees)
(n = 87)
Medium
(100 to 499 employees)
(n = 111)
Large
(500+ employees)
(n = 88)
Differences
by Organization
Staff Size
Primarily strategic
15%
13%
8%
20%
54%
52%
60%
50%
Primarily transactional
31%
36%
32%
30%
Note: Excludes HR professionals who responded not sure to this item. Column percentages may not total 100% due to rounding. Sample size is based on the actual number of respondents by
organization staff size who answered this question using the response options provided.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
Publicly Owned
For-Profit
(n = 74)
Privately Owned
For-Profit
(n = 140)
Nonprofit
(n = 52)
Government
(n = 23)
Differences
by Organization
Sector
Primarily strategic
15%
24%
9%
13%
13%
54%
51%
51%
67%
61%
Primarily transactional
31%
24%
40%
19%
26%
Note: Excludes HR professionals who responded not sure to this item and those from other organization sectors. Column percentages may not total 100% due to rounding. Sample size is based
on the actual number of respondents by organization sector who answered this question using the response options provided.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
30
The findings indicate that organization staff size had an impact on nonmanagerial
employees perceptions of HRs role within the organization. Respondents from small
(35%) and medium organizations (31%) were more likely than their counterparts from
large organizations (18%) to report that nonmanagerial employees viewed HR as
equally strategic and transactional (Table 24). By contrast, HR professionals from large
organizations (81%) were more likely than HR professionals from medium (67%) or
small organizations (63%) to report that nonmanagerial employees viewed HRs role as
primarily transactional. This suggests that HR professionals from large organizations are
more apt to feel that nonmanagers perceptions of the HR departments role are limited
to the tasks performed. This may be particularly true for HR departments with specialist
roles, where nonmanagerial employee interactions with specific HR staff are within a
narrow range of functional areas or responsibilities.
HR Mentoring
In order for the human resource profession to be recognized for its contribution
to business strategy and organizational success, non-HR staff and divisions within
organizations need to be educated about the value to be brought to the organization
through leveraging HRs strategic capabilities. Moreover, individual HR practitioners
need to have the opportunity to take on the roles beyond the traditional administrative
tasks that not only are associated with HR but often limit perceptions of HR.
Mentoring and/or advising has been cited as an important means through which HR
professionals can inform others about HRs role in business strategy as well as gain a
better understanding about the organizations business activities and learn how to form
strategic connections between HR activities and business results.9 To what extent do
HR professionals receive or provide mentoring about the ways that the HR function/
department can contribute to an organizations business strategy? As shown in Figure 7,
a slightly larger proportion of HR professionals have mentored others (59%) than have
received mentoring (53%) while in their current position. Overall, just over one-half
of HR professionals have been involved in mentoring in their current job. Mentoring
activities could help contribute to emerging HR practitioners as well as non-HR staffs
understanding of the roles and competencies of HR and influence perceptions of HR
as a key contributor to the organizations business strategy. Further, mentoring and
Primarily strategic
2%
Small
(1 to 99 employees)
(n = 125)
2%
Medium
(100 to 499 employees)
(n = 164)
2%
Large
(500+ employees)
(n = 131)
Differences
by Organization
Staff Size
1%
28%
35%
31%
18%
Primarily transactional
70%
63%
67%
81%
Note: Excludes HR professionals who responded not sure to this item. Column percentages may not total 100% due to rounding. Sample size is based on the actual number of respondents by
organization staff size who answered this question using the response options provided.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
31
advising among HR professionals may take place either within one organization or
through networks and/or relationships built across organizations.
Not surprisingly, HR professionals from small organizations were least likely to have
mentored others about the ways that HR can contribute to the business strategy. Nearly
three-quarters of HR professionals from large organizations (71%) and almost twothirds of those from medium organizations (62%) reported that they had mentored
others about HRs potential to contribute to the organizations business strategy,
compared with 41% of HR professionals from small organizations (Table 25). In
smaller organizations, HR professionals may work more closely with the other business
functions and may not need to establish formal mentoring relationships in order to
foster understanding of how HR capabilities and competencies can contribute to the
business strategy. This finding may also be tied to differences by organization staff
Figure 7 | Are HR Professionals Involved in Mentoring About HRs Contribution to the Organizations Business Strategy?
59%
53%
Received mentoring
(n = 481)
Note: Excludes HR professionals who responded not sure to these items. Percentages do not total 100% due to multiple response options.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
Table 25 | HR Professionals Have Mentored Others About Ways That HR Can Contribute to
an Organizations Business Strategy (by Organization Staff Size)
Overall
(n = 470)
Small
(1 to 99 employees)
(n = 132)
Medium
(100 to 499 employees)
(n = 172)
Large
(500+ employees)
(n = 138)
Differences by Organization
Staff Size
Yes
59%
41%
62%
71%
No
41%
59%
38%
29%
Note: Excludes HR professionals who responded not sure to this item. Sample size is based on the actual number of respondents by organization staff size who answered this question using the
response options provided.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
32
Figure 8 | Who Has Mentored HR Professionals About HRs Contribution to the Organizations Business Strategy?
77%
25%
10%
11%
9%
1%
Other HR
professionals
CEO/president
CFO
CIO
COO
Others
(n = 253)
Note: Excludes HR professionals who had not received mentoring. Percentages do not total 100% due to multiple response options.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
33
HR Perspective
According to the survey report findings, 77% of HR professionals
who received mentoring on ways that HR can contribute strategically to business strategy indicated that they have received mentoring from other HR professionals. Informal mentoring, in fact,
has a number of excellent advantages: it is a high-level, targeted
coaching; it provides different types of networking opportunities
(e.g., professional and social contacts); it helps to strengthen
workplace culture through one-on-one interactions across the
organization; and it often results in a lasting professional relationship. The ideal mentor is committed to the development, growth
and advancement of people. Additional mentor qualifications
include being regarded as successful in ones profession, having
strong interpersonal and leadership skills and patience, willingness to take risks, and sharing credit for work well done with
others.
The fictitious mini-case study below presents a scenario that could
occur in a number of organizations and is an example of an opportunity where leaders in the HR community can give back to the
HR management, through mentoring, by providing guidance to HR
professionals who want to grow and perform effectively.
34
A newly promoted director of HR worked for a medium-sized organization of 270 employeesa domestic privately-owned for-profit
credit union. Last year, the company developed a competitive business strategy, with a major goal focused on leadership. As a result,
a leadership development program was successfully rolled out that
year. As a follow-up to that initiative, HR was to establish a robust
succession plan. While the director of HR was a seasoned professional with 10 years of progressive HR generalist background, she
did not have experience with strategic succession plans. Further,
her mentor, the prior director of HR, had recently left the organization. In view of the importance of this strategic goaland the
subsequent high expectations placed upon herthe director of HR
needed to be proactive and find a mentorquickly!
She did her homework and learned that many firms were not focusing on succession planning, as confirmed by the SHRM 2006
Succession Planning Survey Report, where only 29% of companies reported having a formal succession plan in place.10 However,
she could not afford to fail, and so she promptly set out to locate a
mentor with specific qualifications: 1) a results-oriented coach; 2)
experience developing succession plans; 3) immediate availability
counterparts from publicly owned for-profit organizations (1%) to report that they
received mentoring from a chief information officer.
HRs Impact
HR professionals were asked to indicate the extent to which they agreed with various
statements about their organizations HR department/function (Figure 9). These
statements were based on core HR competencies derived from the 2007 Human
Resource Competency Study.12 Nearly all respondents strongly agreed or agreed
that their HR departments/functions carry out the administrative/transactional
needs of managing the organizations workforce (97%), understand the core of the
organizations business (96%) and are responsive to employees of all levels within
the organization (95%). The lowest percentages of HR professionals strongly agreed
or agreed that their HR departments/functions contributed to the strategic vision
and direction for the organization (79%), had a direct impact on business processes
(75%) and integrated talent management initiatives with business strategy (74%).
These findings suggest high levels of HR competence in the Operational Executor
and Business Ally roles. HR department and function competencies in most need
of development overall include those required of the Credible Activist and Strategy
Architect roles. Behaviors that define competency in these roles include leveraging
developed an action plan to identify the credit unions critical leadership roles (including the staff holding these positions and their
anticipated retirement dates), create a projected organizational
chart, establish a process to identify high-potential leaders who
could fill these positions, and define measures of success for each
stage of the succession plan.11
Ultimately, by taking a proactive approach to her goal, the director
of HR was not only successful but also gained a greater appreciation of the power of effective networking, an expanded awareness
of organizational politics and culture, a strong professional friendship and mentor for life, and a substantial bonus award for work
well done.
As highlighted in the survey results, HRs strategic role in the
organizational context has a substantial influence on business
success. Through targeted coaching with an experienced mentor,
HR professionals can decrease their learning curve, widen their
professional network and increase their ability to contribute to the
organizations business strategy.
35
Table 26 | Sources of Mentoring on HRs Contribution to an Organizations Business Strategy (by Organization Staff Size)
Overall
(n = 253)
Small
(1 to 99 employees)
(n = 68)
Medium
(100 to 499 employees)
(n = 104)
Large
(500+ employees)
(n = 78)
Differences
by Organization
Staff Size
Other HR professionals
77%
63%
77%
89%
CEO/president
25%
42%
25%
11%
10%
17%
10%
4%
Note: Excludes HR professionals who had not received mentoring. Sample size is based on the actual number of respondents by organization staff size who answered this question using the
response options provided. Table includes only response options for which there were significant differences.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
Table 27 | Sources of Mentoring on HRs Contribution to an Organizations Business Strategy (by Organization Sector)
Overall
(n = 253)
Publicly Owned
For-Profit
(n = 72)
Privately Owned
For-Profit
(n = 120)
Nonprofit
(n = 39)
Government
(n = 20)
Differences by
Organization Sector
Other HR professionals
77%
87%
75%
56%
90%
9%
1%
13%
14%
5%
Note: Excludes HR professionals who had not received mentoring and those from other organization sectors. Sample size is based on the actual number of respondents by organization sector who
answered this question using the response options provided. Table includes only response options for which there were significant differences.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
36
37
HR Metrics
Figure 9 | Agreement That the Following Statements Reflect the Organizations HR Function/Department
97%
96%
95%
84%
84%
79%
75%
74%
Note: Percentages do not total 100% due to multiple response options. Includes responses of agree or strongly agree. HR professionals who responded not sure were excluded from analysis.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
38
Table 28 | Average Agreement With Statements About Organizations HR Function/Department (by Organization Staff Size)
Overall
(n = 476)
Small
(1 to 99 employees)
(n = 139)
Medium
(100 to 499 employees)
(n = 172)
Large
(500+ employees)
(n = 139)
Differences
by Organization
Staff Size
3.44
3.53
3.49
3.29
Note: On a scale where 1 = strongly disagree and 4 = strongly agree; higher numbers indicate greater average agreement. HR professionals who responded not sure were excluded from
analysis. Sample size is based on the actual number of respondents by organization staff size who answered this question using the response options provided. Table includes only response options
for which there were significant differences.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
Table 29 | Organization Has Formal Systems and Processes for Collecting HR Metrics (by Organization Staff Size)
Overall
(n = 464)
Small
(1 to 99 employees)
(n = 136)
Medium
(100 to 499 employees)
(n = 170)
Large
(500+ employees)
(n = 133)
Differences
by Organization
Staff Size
Yes
49%
31%
55%
57%
No
51%
69%
45%
43%
Note: Excludes HR professionals who responded not sure to this item. Sample size is based on the actual number of respondents by organization staff size who answered this question using the
response options provided.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
39
Figure 10 | D
oes the HR Department Have Formal Systems
and Processes for Collecting HR Metrics?
Related Research
The finding illustrated in Table
organizations, HR professionals
HR professionals competencies
tions workforce.
HR Professionals Average Degree of Competency to Play Various Roles (by Organization Staff Size)
Small
(1-99 employees)
(n = 26)
Medium
(100-499 employees)
(n = 36)
Large
(500+ employees)
(n = 381)
Differences
by Organization
Staff Size
4.40
4.56
4.16
Note: Greater numbers indicate greater average degrees of competency. Sample size is based on the actual number of respondents by organization staff size who answered this question
using the response options provided. Table includes only response options for which there were significant differences.
Source: 2007 Human Resource Competency Study: RBL Group, University of Michigan Ross School of Business, SHRM, IAE School of Business, IMI, Tsinghua University, AHRI, and the
National HRD Network [unpublished data]
40
Yes
52%
No
48%
(n = 198)
Note: Excludes HR professionals from organizations that do not have formal systems and/
or processes in place to collect HR metrics and those who responded not sure to this
item.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM,
2008)
Table 30 | Organization Has Formal Systems and Processes for Collecting HR Metrics (by Organization Sector)
Overall
(n = 464)
Publicly Owned
For-Profit
(n = 109)
Privately Owned
For-Profit
(n = 225)
Nonprofit
(n = 68)
Government
(n = 41)
Differences by
Organization Sector
Yes
49%
61%
43%
53%
41%
No
51%
39%
57%
47%
59%
Note: Excludes HR professionals who responded not sure to this item. Sample size is based on the actual number of respondents by organization staff size who answered this question using the
response options provided.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
Table 31 | HR Department Formally Calculates the Impact of HR Activities on Business Performance (by Organization Staff Size)
Overall
(n = 198)
Small
(1 to 99 employees)
(n = 37)
Medium
(100 to 499 employees)
(n = 79)
Large
(500+ employees)
(n = 70)
Differences
by Organization
Staff Size
Large > medium
Yes
52%
46%
42%
61%
No
48%
54%
58%
39%
Note: Excludes HR professionals from organizations that do not have formal systems and/or processes in place to collect HR metrics and those who responded not sure to this item. Sample size is
based on the actual number of respondents by organization sector who answered this question using the response options provided.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
41
Obstacles to HR Effectiveness
No
62%
(n = 419)
Note: Excludes HR professionals who responded not applicable or not sure to this
item.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM,
2008)
Table 32 | Organization Tracks Billable Hours for Its Staff (by Organization Staff Size)
Overall
(n = 419)
Small
(1 to 99 employees)
(n = 131)
Medium
(100 to 499 employees)
(n = 154)
Large
(500+ employees)
(n = 117)
Differences
by Organization
Staff Size
Yes
38%
49%
38%
26%
No
62%
51%
62%
74%
Note: Excludes HR professionals who responded not applicable or not sure to this item. Sample size is based on the actual number of respondents by organization staff size who answered this
question using the response options provided.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
Table 33 | Organization Tracks Billable Hours for Its Staff (by Organization Sector)
Overall
(n = 419)
Publicly Owned
For-Profit
(n = 94)
Privately Owned
For-Profit
(n = 214)
Nonprofit
(n = 59)
Government
(n = 38)
Differences
by Organization
Sector
Yes
38%
26%
48%
31%
32%
No
62%
74%
52%
69%
68%
Note: Excludes HR professionals who responded not applicable or not sure to this item and those from other organization sectors. Sample size is based on the actual number of respondents
by organization sector who answered this question using the response options provided.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
42
Related Research
Previous SHRM research has
succession gaps.
percentages of HR departments
Small
Medium
(1 to 99 employees) (100 to 499 employees)
Large
(500+ employees)
Differences
by Organization
Staff Size
64%
46%
63%
72%
62%
45%
61%
73%
Note: Data sorted in descending order by overall column. Includes only HR professionals whose organizations had either a formal succession plan or an informal succession plan. Sample
size is based on the actual number of respondents by organization staff size who answered this question using the response options provided. Table includes only response options for
which there were significant differences.
Source: SHRM 2006 Succession Planning Survey Report
Overall
(n = 316)
Small
(1-99 employees)
(n = 72)
Medium
(100-499 employees)
(n = 113)
Large
(500+ employees)
(n = 98)
Differences
by Organization
Staff Size
51%
46%
43%
61%
Note: Data sorted in descending order by overall column. Excludes HR professionals who indicated that their HR departments were not involved in processes related to major changes in
their organizations. Sample size is based on the actual number of respondents by organization staff size who answered this question using the response options provided. Table includes
only response options for which there were significant differences.
Source: SHRM 2007 Change Management Survey Report
43
Expertise Panel, While HR has made great strides over the last several years getting
a seat at the table, many organizations still feel that the non-compliance services
offered by HR are a nice to have versus a must have. This belief definitely plays a
role during the budget allocation process, especially during hard economic times. The
differences based on company size are most likely a reflection of the role HR plays in
the organization. Many small organizations focus much of their budget dollars and
headcount on core HR functions such as recruiting, compensation/benefits and EEO
compliance. These HR functions are often more tactical in nature and critical to the
day-to-day operation of the business. As an organization grows, the breath and depth
of HR initiatives extend beyond the core HR functions into what many business
leaders consider the soft HR offerings. These offerings tend to be more strategic
in nature and include programs such as leadership development, talent management
and succession planning. The linkage between these types of HR initiatives and
organizational success is less immediate and tangible, thus making funding for these
types of project less likely during challenging economic times.
SHRM Organizational Development Special Expertise Panel member Ken Moore of
Ken Moore Associates adds, I see a strong correlation between the lack of funding and
the sense of value that CEOs place on the HR initiatives.
56%
46%
37%
23%
(n = 470)
Note: Percentages do not total 100% due to multiple response options.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
44
12%
Budget items that provide definitive value to the organization are usually funded
regardless of the size of the organization. HRs existence as an internal asset is being
challenged by intense competitive business pressures that are forcing CEOs to rethink
their strategies just to survive, let alone prosper.
As shown in Table 34, HR professionals employed by large organizations were more
likely than their counterparts employed by small organizations to report that available
budget for HR initiatives (65% compared with 49%) and available headcount for HR
initiatives (56% compared with 35%) were factors limiting HRs effectiveness in their
organizations. These findings are counterintuitive, as larger organizations clearly have
more staff resources and may also have more financial resources earmarked for HR
initiatives than organizations with fewer than 100 employees. It may be possible that
a larger workforce requires greater resources. Large organizations may be well advised
to examine their HR-staff-to-general-staff ratio in light of needed HR initiatives and
increase HR staffing as necessary.
Table 34 | F
actors Limiting HRs Effectiveness (by Organization Staff Size)
Overall
(n = 470)
Small
(1 to 99 employees)
(n = 140)
Medium
(100 to 499 employees)
(n = 172)
Large
(500+ employees)
(n = 137)
Differences
by Organization
Staff Size
56%
49%
58%
65%
46%
35%
45%
56%
Note: Excludes HR professionals who responded not sure to this item. Sample size is based on the actual number of respondents by organization staff size who answered this question using the
response options provided. Table includes only response options for which there were significant differences.
Source: HRs Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008)
45
Conclusions
HR is positioned
to contribute to
the organizations
business strategy
through aligning
HR functional
areas with the
organizations
priorities.
47
Demographics
Industry
31%
Services (profit)
20%
39%
13%
30%
Health
12%
Government
7%
Educational services
6%
Finance
6%
High-tech
6%
5%
Services (nonprofit)
5%
Wholesale/retail trade
5%
Insurance
4%
3%
Telecommunications
2%
Transportation
2%
Utilities
2%
Newspaper publishing/broadcasting
1%
Other
2%
(n = 462)
Source: SHRM 2008 HRs Evolving Role in Organizations
and Its Impact on Business Strategy
59%
5 to 9
18%
10 to 24
11%
25 to 49
3%
50 to 99
4%
100 or more
5%
(n = 462)
Source: SHRM 2008 HRs Evolving Role in Organizations
and Its Impact on Business Strategy
(n = 486)
Note: Percentages do not total 100% due to rounding.
Source: SHRM 2008 HRs Evolving Role in Organizations
and Its Impact on Business Strategy
Organization Sector
Privately owned for-profit organization
49%
24%
Non-profit organization
15%
Government agency
9%
Other
4%
(n = 485)
Note: Percentages do not total 100% due to rounding.
Source: SHRM 2008 HRs Evolving Role in Organizations
and Its Impact on Business Strategy
48
Appendix
49
Endnotes
Society for Human Resource Management. (2008). The varying roles of HR: A look
at HR by organization staff size. Retrieved from www.shrm.org/surveys
Ulrich, D., Brockbank, W., Johnson, D., Sandholtz, K., & Younger, J. (2008).
HR competencies: Mastery at the intersection of people and business. Alexandria, VA:
Society for Human Resource Management.
The survey instrument is available upon request by contacting the SHRM Survey
Program at surveys@shrm.org or by phone at 703-535-6301.
Society for Human Resource Management. (2008). The varying roles of HR: A look
at HR by organization staff size. Retrieved from www.shrm.org/surveys
RBL Group, University of Michigan Ross School of Business, SHRM, IAE School
of Business, IMI, Tsinghua University, AHRI & the National HRD Network.
(2007). 2007 human resource competency study. United States: Authors.
Society for Human Resource Management. (2007). 2007 job satisfaction: A survey
report by SHRM. Alexandria, VA: Society for Human Resource Management.
Society for Human Resource Management. (2005). The SHRM Symposium on the
Future of Strategic HR. Alexandria, VA: Society for Human Resource Management.
10
Fegley, S. (2006). SHRM 2006 succession planning survey report. Alexandria, VA:
Society for Human Resource Management.
11
12
Ulrich, D., Brockbank, W., Johnson, D., Sandholtz, K., & Younger, J. (2008).
HR competencies: Mastery at the intersection of people and business. Alexandria, VA:
Society for Human Resource Management.
13
Ibid.
51
14
Fegley, S. (2006). SHRM 2006 succession planning survey report. Alexandria, VA:
Society for Human Resource Management.
15
52
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