HR seen moving up in titles and salaries - Executive Briefing - Brief Article

HR Magazine, Dec, 2002 by Steve Bates

Is HR finally getting the respect it deserves? Some statistics gathered by the Saratoga Institute, a consulting firm in Santa Clara, Calif., point in that direction

The institute's most recent HR staff and structure survey found that the percentage of HR employees who are in management positions has increased 65 percent since 1999. At the time of the survey in 2001, more than one-fifth of all HR employees were classified as managers. In addition, the percentage of HR workers who are exempt increased 10 percent since 1999.

Another interesting finding is that, despite a clear trend of outsourcing transactional HR functions, many organizations are spending more on their HR departments. HR outsourcing expenses as a percent of total HR expenses more than doubled from 1999 to 2001, but HR expenses as a percent of total operating expenses rose 12 percent during the same period, according to the institute.

"The indication is that HR staffs are moving away from the transactional side of the business and outsourcing pieces of it. HR staffs are moving to the role of business partners," says Melodye Serino, a senior analyst at Saratoga.

Serino says most companies that have outsourced HR functions likely expected cost savings but apparently have not realized them to date. "It's not a strategy that is working" based on the numbers indicating greater spending for HR.

Serino adds that she hopes that the rising salaries of HR managers is indicative of the value that executives give to the profession." However, she notes that the trend could be attributed in part to the practice at some large firms of moving a person with little or no HR background into the top HR job.

Steve Bates is senior writer for HR Magazine.