What is human resources (HR)?
6 February 2020

What is human resources (HR)?

Most organisations have an HR team, but what does it do? How has human resources’ role changed? And what does the future have in store? HR experts weigh in on the profession’s purpose

Author

Maryam Munir

Maryam Munir

Maryam Munir worked as a content marketing writer at Ciphr from 2019 to 2021.

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HR transformation

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Most organisations have an HR team, but what does it do? How has human resources’ role changed? And what does the future have in store? HR experts weigh in on the profession’s purpose

Definition of HR

Although ‘human resources’ can often be used to refer to the people who make up an organisation’s workforce, ‘HR’ is more widely understood to be the department that oversees a company’s people – such as their hiring, contracts and performance – as well as the organisation’s compliance with employment law and regulations.

But the days of admin-focused ‘personnel’ departments are mostly gone, and some forward-thinking companies are even ditching ‘human resources’ in favour of ‘people teams’. So how far has the HR profession come on its journey, what are its key responsibilities now, and what might the future hold for HR?

Gwenan West, head of HR at Ciphr, has seen the profession change significantly over her 25-year career. “HR used to be admin-driven; just checking whether people at work were conforming with policies and employment law. Now HR has to be much more commercial; HR practitioners have to get to know their organisation inside and out. What HR really focuses on now is helping a business to get the most out of its people, through a range of initiatives that could include anything from employee engagement, to improving the working environment, and helping managers improve their employees’ performance.”

Essentially, says Hessie Coleman, founder of HR consultancy Xethe, HR’s purpose is to make organisations “a great place to work – a place that people want to come and work at. For me, where HR gets pretty interesting is where we move away from the box-ticking – the fundamentals like contracts and pay – and onto adding strategic value.”

Ruth Sharpe, a HRM strategist and part-time HRM lecturer at Leeds University, says HR has moved beyond the business partnering model – conceived by Dave Ulrich in the mid-1990s – to take on a “new entrepreneurial role… HR leads must be transformational in their style with heighted market awareness and digital savviness. They must be visionary in their awareness of what critical skills are needed, analytics and strategic planning should be taken as read in their role.”

“You can’t work in silos in an HR environment; you have to get to know every area of the business,” says West. “You have to build relationships with department heads, and understand what their challenges are – so you can almost become their right-hand man. If an activity or initiative is affecting people in any way, then HR needs to be involved. We help the organisation mitigate risk, and challenge leaders to think in different ways – to advise them on the route to their goal that has the best possible impact on their staff.” Part of how HR is doing that is by collecting and analysing data, and making evidence-based recommendations, she adds.

The nature of the modern labour market is also contributing to a redefinition of what it means to ‘do’ HR, says Professor Chris Rowley of Kellogg College, University of Oxford, and Cass Business School, City, University of London. “Changes in the nature of ‘work’ and the rise and spread of the gig economy and freelancers a broader conceptualisation is needed, as it involves dealing with those who may well not be direct employees.”

Technology is another major force for change, says Katie Jacobs, senior stakeholder lead at the CIPD – the UK’s professional body for HR. “It’s changing HR as a function – think about what’s being automated, or what could be automated – and also the workplace in general. What will it mean for people’s roles and responsibilities? What shape will organisations take in the future?”

West describes HR as a profession that’s constantly “reinventing” itself – something that’s set to continue as the nature of work itself changes. HR needs to think about the future of work beyond the impact of digital tools, says Rowley – about “ideas around making work more inclusive, and notions of shifting corporate priorities towards greater ‘stakeholder’ capitalism. Building consumer trust… involves the importance and power of treating employees decently – from simply listening to them and paying a living wage through to co-owned businesses such as the John Lewis Partnership.”

Non-HR C-suite leaders’ increasing propensity to discuss traditional HR issues such as the value of people and culture provide an opportunity that HR leaders should “lean into”, says Jacobs. “CEOs and chairs are expecting more from their CHROs because they need to look at people and culture through a strategic lens of risk and opportunity. It’s up to HR leaders to step into this space: to have a very strategic mindset, be externally focused, be able to look up and outward, and to understand how the business makes its money. The best HR directors are absolutely part of these top-level conversations.”

While there are “pockets of leaders who absolutely get that HR is a valuable resource and that practitioners have a key role to play in an organisation,” West cautions that there are still organisations that take a very old-fashioned view – who see HR just as an admin function, and a cost. “They don’t get HR involved in board meetings, and they don’t get HR involved in senior-level conversations. Change is happening, but in some places it’s very slow.”

This article was first published in February 2013. It was updated in March 2022 for freshness, clarity and accuracy.