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March 12, 2012

HR's Evolving Role and the Current Economic Environment


Joint Post by
Catherine Toriello, Principal, Management Consulting Services, Infosys  
Reese Dunbar, Human Capital Management Practice Leader, Management Consulting Services, Infosys


We recently came across a 2005 Gartner Group paper that reminded us just how much Human Capital Management has evolved since it was published. The article, Introducing the High-Performance Workplace: Improving Competitive Advantage and Employee Impact, was prescient in its findings and predictions about the changing role of HCM. 

The authors observed that previously, most businesses saw HCM as simply a means for cutting costs, but that its role was shifting to that of an enabler of strategic growth. They further noted that the shift was being driven by changes that HR organizations were beginning to implement, such as automating routine activities and emphasizing and augmenting growth enabling activities.

The authors went on to name the new environment that would result from these and other changes. They called it the "high-performance workplace," characterizing it as a model for enabling "workers [to] locate the right people, find the right content, support the right communication channels and focus on where to create the maximum return."

In the years since the Gartner paper was published, we have found through our own experience that the role for HCM they described continues to be an aspiration. HR organizations are dedicated to hiring and retaining the right talent, especially for leadership roles; helping foster innovation through a focus on intellectual property development and management; facilitating education of globally dispersed workforces through e-learning; and in general ensuring that the HCM function is tightly integrated to the overall corporate strategy and vision. 

We have also found that these and other changes don't come easy. 

Although Gartner's 2005 vision of the future of HR was largely on target, neither they, nor anyone else predicted what came next - the global recession, which not only slowed the advancement of the "high-performance workplace", it drove companies back to the familiar mode of cost-reduction. However, in the past couple of years, we see many clients returning to the primary goals of HCM transformation with a heightened focus while casting a wider net.

For example, software as a service (SaaS) has emerged as a hot option for cutting costs of ERP.  HCM is moving towards the cloud. Meanwhile, the major ERP vendors are not going away. They plan to keep up with Workday,, etc., as demonstrated by their recent acquisitions of Taleo and Success Factors by Oracle and SAP, respectively.

In addition, in their quest to increase employee productivity, clients are also considering, and in some cases, adopting enterprise mobility as part of their HCM strategies. HR has long been established as a function which is online and at the fingertips of employees. People are comfortable accessing pay stubs and other personal information through their company portal. Based on their experience, many organizations are taking advantage of what mobility has to offer.

However, as many of these options involve relatively new technologies, potential issues must be addressed. With SaaS, for example, there is security, training, and scale, especially for large companies. Furthermore, it represents a move away from a truly integrated platform. Mobility, on the other hand, also presents potential challenges with training and security, as well as compliance, device management and support; and within certain geographies, availability.

So, how has the role of HCM evolved over the past several years?  Based on our observations, the current role of HCM continues to be efficiently supporting strategic decision-making and fueling growth opportunities.  However, the means to these ends will continue to change with the emergence of new technology options and a leaner, globally-distributed, increasingly online workforce.