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The role of HR has gained importance in the last few years.
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The role of HR has gained importance in the last few years.
Importance of HR
It is ironical but true that although the IT industry is a people business where the real capital is human capital, the awareness level on HR is very low in most IT companies. In fact, many people in this industry are not even aware of the HR model that their company practices.
HR, in the IT industry, has gone through a circumstantial and lopsided journey for a variety of reasons. Everything appears very tentative and accidental rather than thoughtful and deliberate.
In the early stage of the IT industry, HR was more operational in nature, with an increased focus on transactions. It was only later that the focus shifted more towards strategy.
There were only a few exceptions where even in the early stage of IT industry evolution, a few companies looked at HR in a holistic manner and focused their HR policies more towards employee enrichment, covering culture, values, ethics, development, relationships and innovation.
The evolution of HR in the IT industry has gone through five phases:
Phase#1: Where HR meant Hiring
In this phase, HR was more of a ‘Hiring Function’ and less of ‘Human Resource Management’ function. The number of employees employed in the recruitment activity used to be more than three times that of all other sub functions of HR. Those were the days when the common belief was that the growth of IT company was directly proportional to the capacity of its recruitment engine.
Phase#2: When HR meant Compensation
In this phase, HR was nothing but compensation and benefits. This function took a critical shape and, since employee compensation is the single most influential business cost for IT companies, the attention this function got was sometimes more than the entire HR function.
Phase#3: When HR meant Retention
The sudden spurt in the demand for software engineering talent and their inadequate supply resulted in a galloping attrition rate in the IT industry. In this phase, retention of employees became the priority of companies and therefore the key mandate to HR was to retain the talent pool. In their anxiety and pursuit to retain professionals, HR professionals introduced a slew of initiatives ranging from monetary benefits to work-life balance to building relations with employees.
Phase#4: When HR meant Employee Engagement
Escalating salaries and establishment costs coupled with pressure on billing rates forced several companies to focus on quality of work and productivity. In this phase, many HR departments conveniently forgot other HR activities and turned their attention primarily to employee engagement activities and functions like performance management and weeding out poor performers.
Phase#5: When HR meant Employee Development
In this current phase, the trend is employee development and therefore the focus of HR in most companies is toward employee development. Many companies in order to be in tune with the ever-changing software environment and processes have started focusing and investing in the development of their employees.
