According to a just-published report: "The days of the safe, procedure- driven HR function providing an add-on business support service are over. World-class companies are now demanding that the HR unit adds positive value, not expense."
"The writing on the wall is clear," adds the Business Intelligence report, Transforming HR to Support Corporate Change. People working in HR either respond effectively to the challenge by becoming more strategic and generally effective or they face the sort of things that have happened to other parts of their organisations - downsizing, outsourcing, budget restrictions and ultimately a loss of talent and skills.
At the moment, research suggests that 80 to 90 per cent of what HR does is transactional at the expense of business-focused thinking. The key is for HR units to rethink their activities in order to help push their organisations forward.
Among the examples of best practice from around the world highlighted by the 400-page report are LL Bean, the US mail-order retailer of outdoor clothing, which has integrated total quality with HR. The result is that the HR department is on its way to saving the company $30m (pounds 18m) over the next year through initiating improvements.
More surprisingly, perhaps, the report by Chris Ashton also describes how over the past three years the London Borough of Brent has transformed its HR department from a centralised keeper of records into a total quality- driven, customer-focused organisation. The change has been symbolised by the replacement of about 600 pages of personnel practice with 36, and the slimming down of staff from 80 serving 8,000 council staff to just seven serving 5,500.
Mr Ashton adds: "IF HR does not move forward it will be shaken up, slimmed down or sidelined. It could even be outsourced. If practitioners don't throw off their traditional comfort blanket, it will be pulled away by executives impatient for results."