Precarious Work and the Failure of “Human Resource Management”

The Globe and Mail newspaper recently ran a very thoughtful article examining the growth of precarious work in Canada – people holding multiple part-time or temporary jobs with irregular scheduling. Not surprisingly, this form of employment is very attractive for employers, because they can quickly adjust the size of their workforce as needed. But it’s incredibly difficult for the employees, who usually take these jobs out of necessity, not by choice. Many of them have difficulty getting enough paid hours of work to make a living, and they also have to struggle to manage varying work schedules that can change with very little notice.

In the article, economist Jim Stanford is quoted as saying, “If you’re treating people like a disposable input, you’re not going to elicit a lot of loyalty and creativity.” This comment brought to my mind another workplace problem that, in my opinion, is part of the reason for increasingly poor treatment of workers: the failure of “human resource management” to combat the use of exploitative forms of work. When I say “failure”, I don’t mean the failure of individuals in human resource management (HRM) positions to speak up against these practices. I know many HRM professionals who dislike precarious work arrangements, because they see the long-term negative impact of precarious work on workers, or organizations, on the economy, and on society. What I mean by “failure” is the failure of  the “human resource management” function to become an integral and influential part of organizations, despite a name change and an occupational professionalization that was supposed to achieve exactly that.

When I started taking business school courses in the early 1980s, “personnel management” was just beginning to evolve into “human resource management”. As this blog post explains, there were two major reasons for this name change. One was that  “personnel management” was a purely administrative function, carrying out routine tasks such as keeping employee records and generating wage payments. The broader term “human resource management” was intended to reflect all the organizational functions and tasks that involve employees – such as recruitment, promotion, training, career development, performance evaluation, and (if necessary) discipline or termination. The other reason was to emphasize that “human” resources were just as necessary to the organization’s operations as any other kind of resource, such as raw materials or financial capital – and that, as a  resource, employees needed to be managed thoughtfully and strategically so that their contributions to the organization could be maximized.

The professionalization of human resource management as an occupation happened more recently, starting in the early 1990s. The intent was to establish common standards for training and knowledge in human resource management jobs, and to create a certification guaranteeing that an individual had demonstrated competencies in specific HRM skills. There is now a Certified Human Resource Professional (CHRP) designation in nearly every province in Canada, and similar HRM certifications in many other countries.

The CHRP certification process was modeled on the certification process for professional accountants. It requires candidates to complete coursework in particular areas of study; to take and pass examinations; and to acquire relevant professional experience. Unlike accounting, a professional designation is not formally required to practice human resource management; however, more employers are requesting candidates with CHRPs when they are hiring for HRM jobs.

(credit: cartoonwork.com)

(credit: cartoonwork.com)

 

These changes were intended to give HRM more internal and external credibility – but for the most part, it hasn’t worked. If anything, HRM’s influence and credibility has diminished.  Working in human resource management is seen as the fast track to nowhere for ambitious managers – to the point, I’ve been told, where some MBA students don’t even want to take a human resource management course, for fear that employers seeing it on their transcript will push them into HRM jobs. And despite the frequent assertions that human resource management needs to be part of an organization’s high-level strategic planning, and the very rational reasons why this should happen, in reality this rarely occurs. So despite the professional certification and the more inclusive title, in many ways HRM is not that much better off than when it was “personnel management” and a strictly administrative function. (And that may be why some organizations appear to have abandoned “human resource management” entirely, and given their HR executives snappy titles like “VP of People” or “VP of Talent” – or done away with their human resource management departments altogether.)

Here’s a couple of reasons why HRM has failed to achieve what it was intended to do.

  • Many organizations still don’t seem to understand much about using their HR departments effectively, despite the department’s importance to the organization’s operations. The results of this survey by the Society for Human Resource Management in the US show that most organizations hiring in HR are hiring for “generalists”. Hiring for a generalist makes some sense if the organization doesn’t have enough activity to justify, say, a HR position specializing only in recruitment, or in employee development. But at the same time, it’s difficult to imagine an organization hiring primarily “generalists” in other functional areas such as information systems. Expecting one person to be able to effectively carry out every HRM process is asking a lot –  and in large or complex organizations, it’s an unrealistic expectation. But any resulting shortfalls in how HR functions are carried out are often perceived not as a problem of flawed job design, but as a problem with the HR department itself.
  • The HR profession has been criticized for marginalizing itself. It uses impenetrable jargon;  it doesn’t always deliver value to organizations, or is unable to demonstrate how its operations contribute value; and it’s seen as not being able to offer concrete guidance and advice, even in its own area of expertise. Some commentators have noted that many of the “personnel management” functions of the past are now automated, through the use of software like PeopleSoft, or can be outsourced – and they have suggested that the HR profession has really not been able to adapt to those changes in ways that strongly demonstrate why organizations still need HR departments.

Now this is not to say that Canada’s increase in precarious work is solely due to the failure of “human resource management”. There are many other factors driving that change, such as business practices being altered to respond to the economic pressures of globalization. But when human resource management issues are not part of organizations’ planning or strategies – and when human resource managers don’t have an effective voice, or any voice, in major organizational decisions – the negative impacts of employee practices such as precarious work arrangements rarely get considered. So the failure of “human resource management” is also a failure of many organizations to take employee-related issues seriously, other than ensuring that there are enough employees available to competently perform the work. The prevalence of precarious work is just another example of that very unfortunate failure.

7 comments

  1. Although there is much that I agree with, there are some issues that I would like to raise.

    H.R. Management studies do require successful completion of a course in Financial Management and a course in Strategic H.R. Planning (under various names). They are part of the mandatory academic courses required to qualify for the CHRP designation.

    Employment Legislation recently became a compulsory course in the HR program at Seneca College. It was a required course for CHRP designation/studies prior to the designation becoming national. With the advent of a national knowledge exam, employment legislation was omitted for obvious logistic reasons. This decision, I understand, is being reviewed.

    Precarious work is largely a result of global markets/competition, the ‘Taylorization’ of non-industrial jobs, the focus on short-term (quarterly) results and the very thing that you argue has not occurred, the increased professionalization of HR and its ability to measure its impact.

    Through increased metrics and the ability to measure the true costs of turnover and productivity, many organizations have developed a ‘move up or move out’ structure. Their research demonstrates that many workers/roles reach maximum productivity after a very short period of employment and therefore, it is more cost effective to turn them over, than to provide them with steady work, annual raises and increase the probability that these workers will eventually seek a third party to assist them in obtaining ‘job protection’. Of course Wal-Mart is the exemplar of this philosophy and their early conversion to it helped them eliminate many much more established retail organizations which had legacy costs related to employment stability.

    1. Dan, thank you for the clarification. I have amended the post to reflect that some training in financial management is required to write the National Knowledge Exam. However, the coursework requirements are not consistent across the country; the British Columbia HRMA, for example, requires completion of an undergraduate degree to be eligible for the CHRP designation, but does not specify courses that need to be taken as part of the degree program.

      Your example of turnover/productivity metrics as contributing to precarious work is very relevant. I would argue, though, that part of the role of the HRM function – as the part of the organization most directly responsible for the employees – is not only to produce those metrics, but also to advocate for using those metrics responsibly and fairly.

      The organizations using the “move up and move out” structure may have their own research demonstrating the cost-effectiveness of this approach. But there is also a huge body of research (mostly on job satisfaction and organizational commitment) indicating that workers’ productivity and effectiveness is maximized in long-term employment with mutual trust and support between the employee and the employer. Costco has demonstrated how this approach can work even in the same industry as Wal-Mart: http://www.forbes.com/sites/rickungar/2013/04/17/walmart-pays-workers-poorly-and-sinks-while-costco-pays-workers-well-and-sails-proof-that-you-get-what-you-pay-for/

  2. Fiona,

    Costco is an interesting study, although somewhat of an anomaly. It has been argued that in reality Costco is a financial institution rather than a retail organization. Much like Ray Kroc’s real business was real estate investment rather than selling hamburgers (McDonalds: Behind the Arches).

    Certainly for roles that require higher levels of innovation or thought, there is a valid argument that employee engagement and longevity increases productivity.

    However, current economic conditions are creating a greater schism between those types of jobs and the precarious jobs that are increasingly becoming part of our reality. And in many of those precarious jobs, the learning curve does flat line relatively quickly.

    Therefore in using metrics, should HR focus on cost efficiency or corporate social responsibility? Or is there a ‘happy medium’?

    As you have pointed out, how HR professionals have responded is readily apparent.

    Yes, each province does have its own HR Association. And as you mentioned the requirements may be different in each province. In Ontario in order to qualify for the CHRP designation applicants must have completed a study of 9 courses specific to the ‘profession’.http://www.hrpa.ca/RegulationandHRDesignations/Pages/Courseworkrequirement.aspx This requirements precedes by decades the requirement for a university degree, which is a relatively recent requirement (less than a decade). There is also the requirement for continuing study/education in order to re-certify every 3 years.

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