As the world descends into economic turmoil, changes in how organizations are run are being made. HR, like all other departments with an organization must, if it is going to remain a guiding force within the organization, change. “As HR departments are under increasing pressure to demonstrate how they add value to the business, they are looking at how best to organize themselves to best add this value.” (CIPD, 2009). Demonstrating such added value, according to Jensen & Kraqlund, (2004) “will require new approaches to not only how the HR function interacts with and supports the rest of the workforce, but also how it runs its own operations.” Thus, ‘new approaches’ would indicate that change is called for.
However, according to the CIPD (2007) change would seem to have begun prior to today’s economic downturn: “fifty-three per cent of organisations have restructured their HR function in the last year and eighty-one per cent have done so in the last five years. By far the most common reason for restructuring was to enable the HR function to become a more strategic contributor.”
However, the conundrum facing HR departments across the world is how best to achieve this role as ‘strategic contributor.’ According to Piercy, a principal and HR effectiveness expert in Mercer’s Human Capital business, (Mercer 2009) “in order for the HR function to move forward with its transformation, organizations must implement a talent strategy that arms HR with a range of skills, especially those that relate to finance and business, so that they can be more effective business partners.”
In achieving such a position organizations are now looking at the benefits to be garnered from outsourcing certain HR functions as well as the development of service/shared service centres. Through such endeavours, HR can seen to be paying greater heed to the organization’s core business functions and thus transforming itself into a more strategically effective partner.