In the late 1990s, as the Internet boom placed a premium on finding young, energetic, skilled employees, the HR department became the center of the action. During the boom, HR organizations tried to get a seat at the strategic management table, striving to join as “chief people officers.” But as the economy shrank—along with headcounts and payroll—HR ceased to be considered strategic.
That’s changing now as the economy rebounds and a talent shortage looms. U.S. Labor Department reports show continued firming of the job market. And after several years of low turnout, recent talent-management conferences have experienced record attendance, according to IDC analyst Lisa Rowan.
During the next five years, fewer people are expected to enter the U.S. workforce than retire from it, which will reduce the labor pool and force companies to work harder to find and retain needed employees. And many of those retirees are baby boomers whose deep industry knowledge will depart with them, since thinned workforces often mean a lack of trained replacements waiting in the wings, says Sandra Lee, director of talent management at biotech firm Invitrogen.
This presents an opportunity for strategic HR thinking—and strategic IT involvement in such HR applications. Administrative functions such as payroll and benefits administration have been outsourced or automated, and a new generation of HR leaders have come from business management backgrounds rather than traditional HR—making them ideal partners for the CIO, who likewise is focused on creating business benefit rather than merely administering services.