Someday the term “Human Resources Department” should change. It is the wrong nomenclature to describe what HR departments are asked to do in today’s world. Yes, people management will always be the core responsibility of any HR department. But a significant transformation is underway.
Most HR departments operate with a cost center mentality—an enabling function within a company. This is outdated. CEOs, executive management teams, and even boards of directors are all asking HR departments to be strategic business enablers. This transformation requires new means of thinking within HR, and in some cases, even changes in leadership as more and more business people are finding new careers in HR.
The new concept in HR is return on investment (ROI). The term ROI is typically used at the business-line level only, but now we are hearing CEOs question the ROI on HR. This should scare many HR departments out there.