Learn more about the evolution of HR — from its roots to how it has turned into People Ops.
Human Resource Departments, or someone who manages the HR function, are a part of every business globally. Someone, or teams of people, are administering the day-to-day needs of talent: acquisition, retention, and development, along with legal compliance and a host of other required tasks. The department was once considered a gatekeeper for management, attending to legal requirements and shielding the organization from risk. As a result, the history and evolution of HR is as varied as the functions it attends to today.
With machine-aided production, the Industrial Revolution shifted the workforce from small and home-based businesses to factories. The first water-powered roller spinning textile mill opened in 1793, and its design was copied across the country — the invention of the cotton gin that same year aided the rise of textile manufacturing in the U.S. From the late 1700s and for almost 100 years, American industry thrived. However, with it came the need to manage employees and minimize risk.
From industrial welfare to personnel
As factories grew and were often found to be hazardous, welfare workers were assigned to inspect them and regulate hours for workers, including children as young as 9. The Factories Act of 1833 required male factory inspectors. Industrial welfare is essentially the first iteration of human resource management.
In 1836 Massachusetts became the first state to require children under 15 who worked in factories to attend school at least 3 months per year — in 1842, they limited children to no more than 10 hours of work per day. Other states adopted similar laws but were often unenforced.
Trade unions across the U.S. started to protect the safety and rights of workers in the 1800s.
Part of the evolution of HR included trade unions across the country beginning to form to protect the safety and rights of workers. The American Federation of Labor (AFL) was founded in 1886. It merged with the Congress of Industrial Organizations (CIO) in 1955. AFL-CIO today represents 57 unions and 12.5 million workers.
The first ‘Personnel Department’ was created in the early 1900s by the National Cash Register Company. It was charged with managing worker grievances after a series of strikes and employee lockouts. Part of the team’s role included managing safety at the facility, discharges, and training their supervisory team on practices and new laws.
Federal laws change the function
In 1913, the Department of Labor (DOL) was created to set standards for:
- Hours for employees
By the 1920s, the Personnel Department became a staffing function, with a focus on hiring, training, and compensating employees.
The Department of Labor was created in 1913 to set standards for employee rights and benefits.
After more than 100 years of attempts to regulate child labor, in 1938, the Fair Labor Standards Act (FLSA) set guidelines for minimum ages of employment and hours of work for children. It also established a minimum wage of .25 cents per hour for American workers.
Next, the Equal Pay Act of 1963 prohibited wage disparity based on gender. The Civil Rights Act of 1964 prohibited employment discrimination based on race, sex, color, religion, and national origin. In 1970 Congress enacted the Occupational Safety and Health Act (OSHA) to protect workers. We’ve seen the expansion and amendment of these laws have over time, from the federal level and through state-run Departments of Labor.
Adapting to change
In the 1970s, the personnel function took the role of legal advisor and administrator, assuring business did not violate employee rights or legislation. At the same time, federal laws provided workers with more options. They were:
- Better able to find employment at a predictable wage
- Better able to find safe working conditions
- Less likely to be a victim of discrimination
As the market for talent became more competitive, the role of personnel evolved to include attracting, retaining, and administering compliance.
By the 1990s, Personnel shifted to Human Resources as organizations began to recognize human capital is as essential and a critical resource as any other asset. More than a recruitment and legislative chore and expense, businesses began to ask HR to help identify ways to:
- Measure employee efficiency
- Capture the best talent available
- Reward and incentivize performance
Evolution of HR: Adding tech
Today, online job boards are responsible for 85% of applications.
Outsourcing the payroll function began with the inception of automated payroll systems in the 1950s. By the mid-1990s, technology began working in force for the HR space. The email began to replace snail mail job applications. Monster launched the first online recruitment website in 1994, providing HR more access to talent. Today, 85% of applications come from internet job boards.
In the 2010s, access to applicant tracking systems eased the burden on recruitment staff. Outsourcing payroll and benefits administration burgeoned in the 2010s, removing yet another task from HR staff. By the 2020s, live chatbots decreased recruitment inquiries. It’s estimated that U.S. companies spent almost $23 billion in HR tech 2020.
The evolution of HR and the rise of People Operations
As technology removed the rote, time-intensive tasks from the department, HR professionals became free to develop one of the most expensive and valuable assets a company holds — their staff. People Operations focus on talent — acquiring, motivating, training, and developing staff. In addition, people Ops looks at how to enhance employee experience and provide the tools and environment needed for staff to be:
- Satisfied on the job
The evolution of an HR People Ops mindset
When companies shift to a People Ops mindset, they view employees as they view customers and strive to provide the best possible service to them. They look for processes that support and promote staff members. Their focus is not on the administrative and compliance tasks but employee engagement and development.
From recruitment to retirement, how a business leverages its talent informs its level of success. Highly engaged workers understand their company values them. In turn, they perform at high levels. This drives success for the employee as well as the organization.
How People Ops works
For People Ops teams, the challenge is to build a structure around the needs of the worker, rather than the needs of outside influences. This means providing the tools, training, and environment necessary to succeed and thrive. First, they look for the desired outcome, then reverse engineer how to create a path for staff members and candidates to reach that goal.
People Operations recognizes excellence in employees and nurtures creativity.
People Ops recognizes excellence and nurtures creativity. They open the door to risk that can lead to innovation. By providing the bandwidth to work effectively, a culture of support, and necessary tools, People Ops helps employees meet or exceed the company’s strategic goals. The role of People Operations continues to evolve as existing and upcoming technology, processes, and tools to increase their effectiveness become available.
HR and People Ops
The Human Resources department has evolved over the last 100 plus years. It shifted from protecting workers from business to protecting business from workers. Today, HR and People Ops are a strategic partner in organizational success. As technology affords even the smallest businesses to outsource labor-intensive, low-value tasks, demand for a People Ops mindset will grow. It will develop partnerships that meet or exceed the needs and wants of employees and businesses.