A Brief History of Human Resources And Why Systemic HR Is What's...

Summary

The video script outlines the evolution of the human resources (HR) profession from its beginnings in the 1800s to the present day. Initially, HR focused on transactional and compliance tasks within hierarchical organizations. With industrialization, the role expanded to include industrial engineering and psychological aspects of work. Post-World War II, HR became more strategic, focusing on talent management, leadership development, and performance management within large conglomerates. The late 20th century brought a shift towards flatter organizational structures, prompting HR to address innovation, creativity, and employee engagement. The 'war for talent' highlighted the importance of recruitment and retention. HR began leveraging data analytics to understand workforce trends. Affirmative action and the rise of diversity and inclusion initiatives further expanded HR's scope. The advent of technology and AI has made HR roles more complex and intertwined with technological proficiency. The script emphasizes the need for HR to transform from a back-office function to a strategic, consultative partner, capable of addressing contemporary challenges such as hybrid work policies and mental health in the workplace. The speaker highlights the importance of professional development for HR personnel to keep up with these changes and contribute effectively to organizational success.

Takeaways

• 🏭 **Early HR Focus**: The human resources profession began with a focus on transactional compliance and financial operations, treating labor as replaceable and hierarchical.
• 🔍 **Scientific Management**: Frederick Taylor and industrial psychologists introduced the concept of scientific management, aiming to improve productivity through the study of work practices.
• 🧐 **Psychology of Work**: Carl Jung's influence led HR to consider the psychological aspects of work, initiating the use of surveys and assessments.
• 📈 **Talent Management**: Post-war, HR shifted towards talent management, focusing on succession planning, leadership development, and psychological assessments.
• 📊 **Performance Management**: HR developed performance management processes that were closely tied to the organizational hierarchy, impacting compensation and bonuses.
• 🌐 **Global and Technological Impact**: The late 20th century saw HR take on a global perspective and begin integrating technology, impacting organizational design and flattening hierarchies.
• 📉 **War for Talent**: The concept of a 'war for talent' emerged, emphasizing the importance of talent acquisition, retention, and internal mobility.
• 📊 **People Analytics**: The rise of data in HR led to the development of people analytics, allowing for a data-driven approach to understanding workforce trends and challenges.
• 👥 **Diversity and Inclusion**: HR began to prioritize diversity and inclusion, evolving from affirmative action to a broader focus on various forms of inclusion and equity.
• 🛠️ **Technology and Skills**: The acceleration of technology led to an increased need for technical skills, making HR responsible for finding, assessing, and developing these skills within the organization.
• 🌟 **Systemic HR**: The evolution of HR has led to a complex, interconnected profession that is critically linked to technology and requires a systemic approach to operate effectively.

Outlines

00:00

💼 Evolution of HR: From Transactional to Strategic

This paragraph provides a historical overview of the evolution of the human resources (HR) profession, tracing its roots back to the 1800s when organizations were primarily hierarchical with management and labor. Initially, HR departments focused on transactional tasks such as compliance, financial operations, and record-keeping. As industrialization progressed, HR began incorporating industrial engineering and psychology, moving towards more operational roles. With the rise of conglomerates and the impact of World Wars, HR expanded into areas like succession management, leadership development, and performance management. The shift towards conglomerates saw HR professionals taking on more strategic roles, influenced by leaders like Jack Welch at GE. The paragraph also highlights the emergence of technologies in the late 20th century, leading HR to focus on organizational redesign and talent acquisition, amidst the 'war for talent' era. Additionally, it discusses the growing importance of data analytics, diversity, and inclusion in HR practices.

05:00

🔍 Shift Towards Flatter Organizations and Innovation

This paragraph delves into the transition of HR practices in response to technological advancements and organizational needs. It discusses how HR moved away from hierarchical structures towards flatter organizations, emphasizing innovation, creativity, and psychological safety. The paragraph highlights HR's role in organizational design, fostering innovation, and addressing productivity challenges. It also explores the 'war for talent' phenomenon, where HR focused on talent acquisition, retention, and internal mobility. Additionally, it touches upon the significance of data analytics in HR, particularly in understanding employee engagement, retention, and equity. The paragraph concludes by acknowledging the growing importance of technology in HR functions, with a shift towards more digitalized processes.

10:01

📈 Challenges and Transformations in HR

This paragraph discusses the challenges faced by HR departments amidst organizational growth and technological advancements. It highlights the fragmented growth of HR departments in large organizations, leading to inefficiencies and increased costs. The paragraph also reflects on HR transformations driven by the implementation of new platforms, often focusing on cost reduction rather than strategic alignment. However, it acknowledges the limitations of such transformations in making HR more strategic and consultative. Furthermore, the paragraph emphasizes the need for HR to operate globally and streamline technology platforms. It concludes by introducing the current landscape of HR in a dynamic labor market, where HR professionals are expected to be consultative problem solvers with expertise across various domains.

15:02

🌐 Evolution Towards Systemic HR and Professional Development

This paragraph introduces the concept of systemic HR and emphasizes the importance of HR professionals' skills and capabilities in driving organizational transformation. It discusses the evolution of HR from a back-office administrative function to a complex, interconnected domain. The paragraph outlines the need for HR professionals to be well-trained in business, technology, psychology, and economics to effectively address organizational challenges. It highlights the shift towards a product or solution-oriented approach in HR practices. Additionally, it emphasizes the significance of continuous professional development for HR teams to navigate the complexities of modern HR practices. The paragraph concludes by inviting HR professionals to join a journey towards systemic HR, supported by ongoing research and collaboration.

Keywords

💡Human Resources (HR)

Human Resources, often abbreviated as HR, refers to the function within an organization that focuses on the management of personnel. It encompasses a wide range of activities, from recruitment and training to employee benefits and strategic planning. In the video, HR is portrayed as evolving from a simple administrative role to a complex, multidisciplinary function that is integral to an organization's success.

💡Industrialization

Industrialization is the process where a society transitions from a manual labor and agriculture-based economy to one dominated by industry and machine manufacturing. In the context of the video, the early days of industrialization in the United States led to the establishment of hierarchical organizations and the birth of HR departments, which managed labor as a replaceable resource.

💡Transactional Compliance

Transactional compliance in HR refers to the administrative tasks and regulatory adherence related to employment. This includes hiring, salary negotiations, and maintaining records. The video mentions that early HR departments were primarily responsible for transactional compliance and financial operations of the company's personnel.

💡Talent Management

Talent management involves the recruitment, development, and retention of employees within an organization. It is a strategic approach to ensuring that the company has the right people in the right roles to meet its objectives. The video discusses how HR has evolved to focus more on talent management, including succession planning and leadership development.

💡Performance Management

Performance management is a process by which companies review and assess the performance of employees. It often involves setting goals, providing feedback, and determining compensation or bonuses. The video describes how HR professionals managed performance management processes that were linked to the organizational hierarchy.

💡Organizational Design

Organizational design is the structure and layout of an organization, defining how its various components work together. The video highlights a shift in HR's role towards organizational design, focusing on flattening hierarchies to improve creativity, innovation, and psychological safety within companies.

💡Diversity and Inclusion

Diversity and inclusion refer to the practice of promoting a work environment where individuals of different backgrounds, genders, races, and perspectives are valued and empowered. The video discusses the evolution of HR's focus on diversity and inclusion, which started with affirmative action and expanded to address various forms of inclusion and diversity within the workplace.

💡People Analytics

People analytics is the use of data and analytics to improve the understanding of an organization's workforce. It helps HR professionals to make informed decisions about talent management, retention, and promotion. The video mentions the emergence of people analytics as a new domain within HR, utilizing data from various HR systems to gain insights.

💡Hybrid Work Policy

A hybrid work policy is a flexible approach to work that combines remote and in-person working arrangements. The video touches on the challenges HR faces in implementing hybrid work policies, especially during times when employees are dealing with burnout and mental health issues related to working from home.

💡Artificial Intelligence (AI)

Artificial Intelligence refers to the simulation of human intelligence in machines that are programmed to think like humans and mimic their actions. In the video, AI is presented as an accelerant for change within HR, necessitating the adaptation of new skills and the assessment of technical personnel within the workforce.

💡HR Transformation

HR transformation is the process of redefining and restructuring the HR function within an organization to improve its efficiency, strategic alignment, and overall impact. The video describes past HR transformations that focused on cost reduction and standardization but did not fully equip HR to be strategic or consultative.

Highlights

The evolution of the human resources profession from the 1800s to present day has been marked by significant changes in organizational structure and HR's role within it.

Early HR departments were primarily responsible for transactional compliance and financial operations related to employees.

The industrialization period in the U.S. saw the rise of hierarchical organizations with HR focusing on manual labor and their replaceability.

Frederick Taylor's scientific management principles influenced HR practices by optimizing work efficiency in factories.

Carl Jung's psychological perspective on work led to HR's increased focus on industrial engineering and psychological aspects of job performance.

HR's role expanded to include talent management and succession planning as employees typically spent their entire careers with one company.

Post-World War II, HR shifted towards more strategic functions like leadership development and performance management.

The rise of conglomerates in the 70s and 80s led to HR focusing on recruitment, retention, and internal mobility.

Technology adoption in the late 80s and 90s prompted HR to consider organizational redesign for improved innovation and creativity.

The 'war for talent' concept emphasized the importance of talent acquisition and the use of intelligent technologies for candidate assessment.

People analytics emerged as a new domain in HR, utilizing data from various HR systems to identify trends and drive decision-making.

The 1960s brought about a focus on equity and diversity, influenced by affirmative action and the EEOC's enforcement of fair hiring practices.

Training and development became a significant part of HR's responsibilities, evolving from in-line training to corporate universities and e-learning.

HR's role has become increasingly intertwined with technology, to the point where proficiency in technology is now a differentiator for high-performing HR functions.

The growth of HR departments often led to fragmentation, resulting in the need for HR transformation and the implementation of new platforms.

HR transformations have typically focused on cost reduction and service optimization, but have been criticized for lacking strategic impact.

Current challenges for HR include navigating a tight labor market, rapid technological advancements, and the need for new skills in a converging industry landscape.

The concept of 'Systemic HR' is introduced as a new model for HR operations, emphasizing a step-wise evolution and professional development within the HR team.

The research on Systemic HR aims to guide HR professionals and leaders in evolving their roles and making their organizations more effective.

A focus on professional development within HR is crucial for transforming HR operations to be more consultative, solution-oriented, and capable of addressing complex business challenges.

Transcripts

foreign

I'd like to give you a brief history of

the human resources profession that I

think will help you understand where we

are and where we need to go now as a lot

of you know in the 1800s before the turn

of the century organizations were

primarily made up of management and

labor and in the early days of the

industrialization in the United States

we set up hierarchical organizations

with senior Executives senior leaders

managers supervisors and then labor and

labor was considered to be the hourly or

replaceable oftentimes manual labor that

would be trained for jobs they would do

their jobs and if they failed we would

replace them with other people and so at

HR departments or Personnel departments

did was basically take care of the

transactional compliance and financial

operations of the people part of the

company hiring people hang them perhaps

negotiating their salary or not dealing

with labor unions taking care of some

amount of operational training although

a lot of that was done by the business

and keeping records of who worked and

what job and where they fit into the

hierarchy and you know even though this

sounds a little bit odd I've read books

about slavery that show meticulous

detailed records of the slave hierarchy

which slaves were trained in which roles

in which jobs and which skills and HR

people do this kind of stuff around the

turn of the century by the way this was

also the time when Frederick Taylor and

other industrial psychologists started

to study the work practices in factories

and realized that there was actually a

science to this and that you know as an

Industrial Engineer people could look at

the rate the way people were working in

these factories and make them more

productive by changing the amount of

weight they would carry the location how

far they would have to walk between

stations and other things and then Along

Came Carl Jung and actually who was

actually a disciple of Freud and looked

at the psychology of work and so HR

people started to become focused on

industrial engineering a little bit on

psychology and the beginnings of surveys

and so forth started and so anyway this

was all part of the transactional

operational work that HR did and most of

the people that came to work for

companies in those days lived until

their 60s maybe their 70s they worked

for one company most of their career so

there was also work to do in the

pre-hire to retire talent management

space to move people into new roles or

new jobs and to take care of them as

they got older and went into retirement

Along Comes World War one and then World

War II and all of a sudden we started to

be conglomerates and when I entered the

workforce in the 70s and late in the

early 80s every big company was really

the place to work and we wanted to work

for these big can Walmart organizations

GE IBM at T Etc they were great great

companies and people dedicated their

entire career to these companies and so

what the HR people did is they moved out

of this role of transactional

administration and they moved and did a

lot of other things they did succession

management they did leadership

development they did more extensive

assessment of people for recruiting

psychological assessments and I O

psychology pre-hire assessments became

very big they worked on pay bans pay

levels Performance Management processes

that were based on the hierarchy so that

believe it or not in those companies

there was a cascading goal process and

you would oftentimes have goals that

were cascaded up to the organization at

the top and at the end of the year you

would go through your goals and your pay

or your bonus would be dependent on

would be based on this role you played

in the hierarchy and the role your

organization playing the hierarchy HR

people managed all that and to some

degree they did not have a seat at the

table because they were really managing

operational parts of the people part of

the company they weren't involved in

strategic organization design not that

much although you know Jack Welch to

give him a lot of credit actually

decided early on in his growth as a

leader that the HR people were very

important and a GE he actually pioneered

a lot of work on culture and training

and corporate universities and so forth

that were very popular in the 1950s and

the 1960s and became a new life for HR

people so as companies grew into these

conglomerates HR people started to get

promoted into more sophisticated jobs we

also started much more focus on surveys

and annual surveys to look at engagement

because we didn't want people to leave

and then of course in the late 1980s

early 1990s we started to adopt

technology in our companies and we

really realized that the hierarchy

wasn't necessarily good sometimes it was

getting in the way we needed to manage

Innovation and growth and creativity and

new technology systems and so the HR

community and profession moved along and

started to look at its role in

redesigning the organization and

flattening the organization in improving

creativity and innovation in in creating

more psychological safety and studying

issues like why is one group developing

products faster than another group and

the profession got involved in the

domain of of organizational design and

even more employee listening to get more

feedback from different parts of the

organization on what could be improved

companies like Gallup became very big

and other Technologies used for

listening and then we had what was

called the war for talent around the 70s

and 80s and it was around the same

period of time McKinsey and others sort

of coined this idea that if we're going

to have companies that are very Dynamic

and people are going to move around

between companies now they weren't going

to stay in one company their whole

career we needed a fight to get them

and the war for talent created this

highly muscular focus on Talent

acquisition and recruiting and there was

a period of time early in my career as

an analyst when there was a massive

amount of energy in HR towards sourcing

employment branding candidate experience

better a faster Technologies for

assessing people more intelligent

Technologies for assessing people and

later as a result of that looking at how

do we maintain retention and how do we

improve the internal mobility and by the

way there was also starting to become a

lot of data in HR and this data that was

floating around in training systems and

recruiting systems and core HR systems

became a new domain of HR called people

analytics so we could look at this data

and we could figure out when people were

leaving why they might be leaving who's

getting promoted who's not getting

promoted and also look at things around

equity and Equity of course became big

in the 60s during affirmative action

when the United States government

mandate dated a variety of programs to

force companies including the EEOC to be

fair in their hiring but the HR people

responsible for that too and then that

turned into diversity and inclusion and

culture programs and now of course a

whole focus on many many forms of

inclusion many forms of diversity on

this new debate going on about whether

diversity is good or bad or legal or

illegal and so forth but that became a

big part of HR as well and then of

course we have the acceleration of

technology and suddenly we don't have

enough skills and then the HR people got

responsibility for finding technical

people assessing technical people

building internal capability academies

for skills defining what the skills are

working with the Business Leaders on

different skills and we're still sitting

in that world of course today and now

dealing with the emergence of AI as a

further accelerant of all of these other

things of course the other thing that

was going on during this period of time

is the role of training you know

training was typically done in the line

in the early days of HR but then it

moved into HR and HR got more and more

responsibility for not just functional

training and education but leadership

developing building leadership academies

crotonville other corporate universities

and then when training went online the

HR department took responsibility from

e-learning for e-learning Blended

learning learning the flow of work micro

learning self-authored learning and all

these other technologies that were used

to train and enable and facilitate

growth inside of the company so so

through this Evolution the HR function

that didn't need a lot of technology in

the 1800s and 1900s and early 2000s now

is desperately linked to technology in

fact we now have research that shows

that if you are not good at technology

you cannot function as a high performing

HR function in fact it is a big

differentiator now it isn't just a nice

to have now while all that was going on

the number of HL roles exploded there

are more than 500 or maybe a thousand

job titles HR we have 92 capabilities in

our capability model and we're missing a

few it became very complex very

multi-disciplinary the the folks in

recruiting didn't know what the folks in

learning were doing the folks in

compensation had their own little island

the Dei people had their own little

island the folks that were involved in

technology and data were sort of in

their own little island so we had all

these groups and of course in every

company that grows while this is going

on the HR department grows and the way

the HR department typically grows is in

a small company it's all in one place

and oftentimes reports to the CFO and

then there's a lot of focus on

recruiting and pay and fairness and

training and then there's a division in

Europe or another office in another

state or we buy a new company and

there's a second HR department and the

third HR department and a second hrms

and a third payroll role system and

multiple training systems and multiple

recruiting systems and what happens is

these organizations as they grow the HR

department grows in a fragmented way and

somebody wakes up one minute day and

says why are you spending so much money

on HR why do I have so many people by

the way who's interfacing with the

business versus who's working in centers

of excellence we need a quote-unquote

transformation and so for the decade or

two before today we spend a lot of time

with consulting firms going through what

we called an HR transformation and

oftentimes the HR transformation was

driven by the implementation of a new

platform well most of those

Transformations didn't have nearly the

impact everybody thought because all we

really did during the transformation was

we rationalized the roles and created

what I like to call the 1980s I.T

Department which was we we standardized

roles in centers of excellence we

created service centers we set up a role

of a business partner you interfaced

with the business and we optimized

around cost reduction and time to

Service delivery we didn't do a lot of

training of the HR people we didn't do

cross training we didn't try to turn

them into Consultants we just tried to

lower their cost and we have interviewed

a lot of companies that have been

through these Transformations and walked

out of the transformation saying well we

did save a lot of money but we're not

very strategic and we're not very

consultative and we're not able to solve

a lot of the critical issues we have so

those Transformations are what we call

level two out of our four level maturity

so anyway that was going on and the one

thing it did do is it forced the HR

function to operate in a global way and

it got the number of Technology

platforms reduced now here we are in

2023 2024 in a very tight labor market

rapid improvements and the need for new

skills Industries converging with each

other the economies sort of teetering

with high inflation and various

scenarios for growth and limitations of

global warming and changing energy

supplies and lots of disruptive changes

and we're suddenly taking this

organization that's been through massive

change for the last hundred years and we

wanted to do something different we

wanted to be consultative problem

solvers we want them to be experts on

every domain of the people side of

business we want them to understand how

we can be more competitive how we can

improve productivity how we can flatten

the organization how leaders can be

better aligned to what they need to

spend time on how we can hire people and

steal people from other companies how we

can pay people more fairly and more

equitably without going running out of

money how to improve engagement and

employee experience when everybody's

burned out and has mental health issues

from working at home how to implement a

hybrid work policy how to use Ai and it

goes on and on and on and so what's

basically happened is this profession

that started out as a pretty simple sort

of back office administrative function

has become very complex very important

and very interconnected and as you'll

read about in our research and what

we're going to launch next week this is

a new model now it isn't a step change

this isn't we're not just launching some

model and say voila here it is here's

the unveiling go do this we're going to

show you how to get there from here

because what we found when we did this

research and Kathy and Kristoff Kristoff

and others here worked on this is this

is a step wise evolution of your

operating model the roles you have in HR

the skills you have in HR what you do

with technology what you do with your

business partners how you're aligned

with the business what kind of data you

use and how it's brought together into

different forms and the product or

solution orientation design and

implementation process you have for HR

systemic HR is a very big idea and I

don't think anybody will disagree with

the idea but it's really a question of

how and what we've done for the last

year or two is we've figured out how

we've interviewed probably 40 or 50 very

large companies we've looked at lots and

lots of data and I think really come up

with some very important principles on

how this function will evolve it doesn't

matter where you are if you're a small

company or a large company if you're an

HR professional or an HR leader if

you're a recruiter or an l d person or a

tech person or a compensation person

this systemic HR research will help you

figure out how your role can change and

will change and how your organization

can be more effective I am very excited

about it it's it's really in some ways

the culmination of my work for 25 years

as an analyst and the team here has

worked very very hard we've validated

This research with a lot of our clients

and we're going to be working on this

all we're year next year this is not a

piece of paper that you read this is a

whole set of ideas and practices that

we're going to work on with you for the

next couple years to help the profession

evolve to help your organization evolve

and help you involve and the final

concept I want to give you is what I

call transformation from the inside out

the number one thing that holds people

up in these transformation projects is

the skills and capabilities of the HR

people themselves we can't operate in

the systemic high value consultative way

if we don't know what to spend our time

doing if we're unfamiliar with the

domain if we're not comfortable with the

Consulting process if we're not product

oriented if we're not solution oriented

if we're not falling in love with the

problem in other words so a lot of this

is also heavy duty focus on professional

development of your HR team and that

comes out very clearly in the research

now that we're not back Office Clerks

anymore we we've got to be really well

trained on business on technology on

people practices on psychology on the

economy and of course the culture of the

business that we're in and what will and

won't work and that is a big part of

systemic HR too so anyway join us on

this journey you're going to see a lot

more coming the introduction is taking

place in October and there'll be a lot

more to come through the rest of the

year our research members of course if

you either join the Josh person Academy

or become a corporate member we will

give you in-depth information

benchmarking and tools to take advantage

of all this but we'll certainly also

communicate a lot of this externally

because we want the maximum number of

people to understand what we've

discovered and really learn from this

process thank you very much

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thank you

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thank you