Are HR Positions at Risk?

By Paula Santonocito
HR Wire
April 22, 2009

The recession has claimed a lot of jobs, including many professional positions. How has HR fared? What might the remainder of 2009 hold?

In the news

Several companies have made headlines for trimming HR staff.

Last year, for example, home improvement retailer Home Depot restructured its human resources operation, eliminating about 1,000 HR positions. Where previously Home Depot had in–store HR managers, it now manages human resources issues on a district basis.

Beer maker Molson Coors, meanwhile, last year elected to outsource a number of functions, including several in HR, and eliminate the associated positions.

In March of this year, Garmin, a leading maker of GPS navigation systems, announced human resources jobs were among those to be cut as part of the company´s first–ever layoffs.

Of course these aren´t the only HR job cuts. When a company announces management positions will be eliminated, HR jobs are frequently among those on the chopping block.

With employee recruitment and hiring grinding to a halt at many organization, jobs related to those functions are apt to be viewed as expendable. Earlier this year, search engine giant Google reduced its full–time recruitment staff by 100 employees.

Behind the scenes

But, according to Valerie Frederickson, founder and CEO of Valerie Frederickson & Company, a global HR executive search and consulting firm, job cuts that make the headlines aren´t the only HR positions affected.

“We´re seeing that layoffs of HR professionals is a quiet storm. It´s going on in big numbers, but it´s being kept under the radar,” Frederickson tells HRWire.

Two different scenarios typically drive HR layoffs.

“An increasing number of companies are moving their HR functions overseas, in most cases to Asia or Malaysia,” Frederickson says. These organizations aren´t outsourcing the function; instead they move it to another in–source, but one that is offshore.

As companies increasingly shift R&D offshore, all that remains in the United States is a skeleton function. “We´re seeing it happen all over high–tech and all over manufacturing,” Frederickson says. “Once you have all your cost centers overseas and headcount overseas, you don´t need HR here.”

How common is the practice?

“We anticipate that up to 20 to 25% of top HR jobs will move to Asia or Malaysia over the next five years,” Frederickson says.

She draws a parallel between HR positions and what has already happened with engineering jobs.

What´s more, not only tech and manufacturing will feel the impact. Frederickson points out that in many instances the shift has already occurred in financial services.

The other situation contributing to the elimination of HR jobs relates to mergers and acquisitions.

An increase in M&A activities results in increased layoffs, and Frederickson sees companies involved in M&As achieving economies of scale through layoffs, with HR positions among jobs being cut.

A change in approach

These two scenarios might suggest that HR professionals are somewhat powerless with regard to job security. However, although every company has its own set of circumstances and even the best HR professional may find her or his job a casualty of those circumstances, there are steps that can be taken to reduce the likelihood of job loss.

It all comes down to how valuable the HR professional is to the organization. But defining “valuable” requires understanding what the organization values.

Frederickson tells HRWire her company is finding that CEOs and CFOs, the two groups that HR works with the closest, are looking at five major areas: restructuring; productivity; M&A or consolidation; pace of change; and executive compensation.

“These are the things CEOs and CFOs are focusing on, and they need HR people who can keep up with them on these five issues,” Frederickson says.

Conversely, her firm doesn´t see any CEOs concerned about attracting the best and the brightest; learning and development; succession planning or their bench.

“This is quite different from how a lot of HR people view their skill sets,” Frederickson says.

What´s more, she points out there is still a shortage of HR professionals who have those qualities that corporate leaders want now. It´s also worth noting that the HR person they wanted six months ago is not the same person, at least from the standpoint of skills.

The situation, for many HR professionals, is more than a little challenging. ´I think the majority of HR professionals have the wrong personality type. They are a Myers–Briggs ESFP and they need to be more INTJ,” she says, citing how HR professionals are typically more reactive and interested in the soft side of the business.

Frederickson finds most HR professionals have a lack of interest in executive compensation. She also finds they are woefully unprepared for the new role. They didn´t major in business, she says, and today´s CEOs want “business partners on steroids.”

So what should HR do?

“Act like an up–and–coming CFO,” Frederickson says. Take courses in restructuring and courses in mergers and acquisitions. Hang out at National Association for Corporate Development meetings. Do an MBA in finance. Become an expert in IT, focusing on global systems that be scaled.

Find somebody who is successful in one of these areas and pay attention to how their mind works. Emulate their approach and style in order to gain respect in the new environment.

The other key issue is, despite all the talk about strategic HR, corporate boards still leave HR executives out of everything except one area: executive compensation.

“Our advice is to take the bone you´ve been thrown, which is executive comp, and just nail it. Become an expert in executive comp,” Frederickson says.

She notes that at companies where HR executives are knowledgeable, their CEOs speak to them five to seven days per week.

“Become that comp expert and be able to talk comp until you´re blue in the face. That´s the best way to get face time and become strategically necessary to the business,” Frederickson says.

Will it work?

Frederickson tells HRWire that she knows of companies that have offshored the HR function and left a comp person in the U.S.

Of course this may not be the ideal situation either, but it certainly shows that the HR professional is valued.

As Frederickson points out, focusing on one area doesn´t mean the need for other areas, like coaching and training, is less; however, those tasks have to be done as a byproduct of what the company now views as the real work.

Soft skills are still required as well, but those skills are different. Frederickson´s firm has identified the top four soft skills for HR professionals now: assessing organizational needs; conflict resolution; change management; and due diligence.

“It´s all about being able to chameleon yourself to the changing needs of the business,” Frederickson says.


Paula Santonocito is a business journalist specializing in employment issues. She is the author of nearly 1,000 articles on a wide range of topics, such as impact of world events on the workforce, recruitment and hiring, retention, HR legal issues, education and training, employee benefits, diversity, changing workforce demographics, and the Internet as it relates to the workplace.