Once upon a time, HR was viewed as a boring corporate wasteland “Oh no! Sally got transferred into the HR department… her career is over. Poor Sally!” Even though companies hired, managed, and fired people all the time, management still saw HR as an administrative backwater.
That view gradually changed. Books such as Good to Great helped owners and managers understand that hiring great people was essential for greatness; and that to do so required strategic initiative. They began seeing they couldn't rely on yesterday's performance management approaches, created in an industrial era, when working primarily with knowledge workers. Managers such as Jack Welch, Herb Kelleher, Howard Schultz, James Sinegal, and Tony Hsieh used a strategic HR approach to build great companies – GE, Southwest Airlines, Starbucks, Costco, and Zappos. The result: cutting-edge executives and managers realized that HR provided a competitive advantage.
Then the recession struck – and management neglected HR to concentrate on survival and building productivity. When the economy began recovering, valuable employees moved on to greener pastures, either working for themselves or for a company where they could feel fully engaged. Once again, businesses became desperate to reduce turnover and find good hires.
Tomorrow's successful companies will win the talent wars by attracting and challenging the best, brightest, and most productive employees to grow and innovate for themselves and their employer. This shift in culture will have the unintended effect of reducing workers comp, employment practices, cyber-liability, and other insurance exposures – with HR helping lead the way.
Businesses will see HR as a strategic resource that’s as essential as sales, operations, and finance. That’s the new HR story.