HR’s Exponential Growth: How Human Resources Departments became Corporate powerhouses
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Published November 16, 2024
American companies now employ 1.3 million human-resources professionals, marking a dramatic 64% increase over the past decade, according to reporting from The Economist. This surge significantly outpaces overall employment growth, which registered at 14% during the same period.
The expansion is particularly pronounced within professional-services and technology firms, were HR staffing has doubled since 2014. This trend isn’t limited to the United states; similar growth patterns are being observed in Australia, Britain, and Germany.
Rising Compensation Reflects Increased Importance
The influence of HR leadership is also reflected in compensation. A Stanford University study reveals that the total compensation for chief Human Resources Officers (CHROs) has risen from 40% of the average director’s salary in 1992 to 70% by 2022. This demonstrates a important elevation in the perceived value of HR leadership within corporate structures.
Notably, Mary Barra, the current CEO of General Motors, previously held the company’s top HR position, highlighting the pathway HR can provide to the highest levels of corporate leadership.
Driven by Disruption and Regulation
Several key factors are driving this expansion.The Economist reports that workplace disruptions – including the #MeToo movement, the rapid shift to remote work spurred by the COVID-19 pandemic, and the increasing emphasis on diversity and inclusion initiatives – have all contributed to the growing demand for HR expertise.
Companies are also navigating an increasingly complex regulatory landscape concerning employee relations, coupled with a significant increase in workplace complaints. The average number of discrimination or harassment allegations has risen sharply, from six per 1,000 employees in 2021 to 15 in 2023.
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