Human Resources Field Gains New Respect for Its Own Execs

By anyone’s standards, Ted Westerman is a player. A member of the most senior group of executives at Hughes Electronics Corp., he’s an integral part of boardroom strategy discussions.

The CEO and other top leaders turn to him for help in making major decisions about such things as whether to buy a new company.

It hasn’t always been so. Westerman, a human resources executive at the Westchester-based corporation for 16 years, was only invited to join the inner circle about five years ago.

“There is no question my counterpart 20 years ago would not have been there,” said Westerman, senior vice president of human resources and administration. “In fact, he would have reported two layers down.”

Westerman personifies a new breed of highly respected professionals in human resources management, a field filled with people still hoping to be invited to the table.

It is a profession in the throes of reinventing itself, struggling to reposition in the brave new world of downsizing and outsourcing, trying to shed the stigma of its paper-pushing past and transform itself into an indispensable business partner for the future.

“It used to be regarded as a job for people with very little training--the secretary who would move up,” said Paul Falcone, manager of employee relations for the City of Hope National Medical Center in Duarte.

“She’d be given new responsibilities to start an HR function, and after 15 years, become the director of the unit, without ever having any formal HR training.

“Does that still happen? Yes, but it’s becoming less and less the case. There’s too much competition for the jobs now.”

Today, experts say, HR professionals hoping for a seat in the boardroom need to have a lot more business savvy to offer than did yesterday’s “smile and file” version. Think MBA.

“To succeed in HR, you need a solid business foundation,” said Maureen Minehan, issues manager for the Society for Human Resources Management, in Alexandria, Va.

“You need to know how to read your company’s balance sheet, you need to know how to say that by implementing this program or by hiring that person, it will have this effect on the company’s bottom line.

“And to do that, you really need to know the business your company is in,” she said. While the traditional ideal of the HR manager was “someone who was ‘good with people,’ ” that’s no longer the case, Minehan says. “Now, you need . . . to be ‘good with numbers.’ ”

Take Falcone. He’s often required to bid competitively against outside vendors for the right to perform traditional human resources services such as recruitment. “If they can find more cost-effective bids or better service on the outside, then I’m outta here,” he said.

Indeed, the outsourcing trend has hit HR departments in a big way, as companies increasingly farm out administrative tasks once performed in-house--part of an overall trend toward shedding work not related to the core business. An estimated 25% of all payroll checks are now cut by business service providers.

Says Westerman: “Medical plans, pension plans, savings plans--almost no companies administer those inside anymore. They’re almost all done by outside specialists, and the human resources department manages the contracts in the best interests of the company. It’s more cost-effective and they do it better.”

According to a 1994 study by the Conference Board, the New York City-based business research and membership group, 80% of executives interviewed had outsourced services such as 401(k) plan administration and management development programs, or planned to do so.

Technological developments have also streamlined traditional HR record-keeping duties. Instead of trooping to the HR department to fill out a form, employees do it themselves online.

One indicator of the job toll: “For many years, the rule of thumb was you’d have 1.5 human resource people for every 100 employees,” Westerman said. “Now the ratio is more like 1 to 100.”

Says Sanford Jacoby, a UCLA professor of management who has published a history of the personnel management field, “There are companies where, in the last 10 years, the human resource managers have sold the top managers on the importance of human resources to the bottom line and on the need to integrate human resources strategy and business strategy.

“In those corporations, HR managers carry clout,” he said, “but in a whole lot of others, right now is a tough period for HR professionals.”

Pete Gray, who manages HR Only, an L.A.-based employment firm that specializes in placing human resource workers, sees the angst of the have-nots.

“There’s a lot of hand wringing by the old-fashioned human resources people who don’t want to acquire the business skills, and they can see the handwriting on the wall,” he said.

“They’re seeing they’re not being asked to the right meetings and they’re seeing a lot of the traditional tasks they’ve done being outsourced or performed by technology, by an 800 number in South Dakota,” Gray said. “And they’re wringing their hands and saying, ‘What’s left for human resources?’

“But there’s a big part of the HR community that understands exactly where the profession needs to be and they’re out there getting the skills and practicing it every day.”

People like Westerman, for instance.