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17 Feb

The History of Human Resources

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Like anything else, human resources has a long history and has evolved drastically since businesses began reaping the benefits of an HR department. The history of human resources dates back just before the twentieth century—many people performed tough work in even tougher conditions.

Due to the working conditions of this time (approximately 1890-1920) the concept of connecting a worker’s well-being and their productivity came to light. This period of industrial betterment brought about new departments called Industrial Welfare and Scientific Management.

At the same time, some European companies like Cadbury in the UK and Jacob in Ireland employed welfare officers to improve working conditions and set up sick pay schemes and subsidized housing.

This was just the beginning—the role of human resources rapidly expanded.

1920s – 1950s

At this point in the history of human resources, there was an increased emphasis on learning and fair compensation—an employee’s value will go up when presented with the opportunity to learn and receive fair compensation.

New Personnel and Manpower Development Departments focused on internal training and working with labor unions to created better compensation packages for employees.

Furthermore, one of the most significant laws for fair labor was passed during this time: The Fair Labor Standards Act of 1938 (FLSA). Coming to fruition around the time of the Great Depression, the FLSA mandated minimum wages and other employment laws that were in the interest of employees. Because of the new laws, companies began to develop management teams to handle different areas of business, such as statutory compliance, employee health, and safety.

These management teams would be known as the Human Resources Department.

1960s – 1980s

The focus of HR during the 1960s was largely on compliance issues. The Equal Pay Act was passed in 1963 followed by the Civil Rights Act in 1964. However, compliance wasn’t the only facet of HR that was given attention to.

During this period of history of human resources management, the workforce was introduced to Herzberg’s Two Factor Theory and Deci and Ryan’s Self-Determination Theory—both of which focus on the motivation of employees.

The theories, organizational management, and psychology pushed HR to take a closer look at an employee’s desire for achievement, advancement, and the need for recognition.

1990s – 2010s

Around the turn of the twentieth century, HR began to experience a technology boom, which in turn, played a big role in employee happiness and retention. We saw a shift from personnel management to managing employee engagement and strengthening culture.

There was also an evolution from HR being process-centric to worker-centric.

Due to this shift, the importance of HR moved toward the top of businesses’ necessities list. What was once considered to be an obsolete role is now one of the most dynamic. This time period in the history of human resources is when HR professionals would begin to grow corporate values and act as managers who understand that employees are the only source of the competitive advantage.

Today and the Future

The history of human resources has hardly begun. As businesses continue to grow, the role of HR is going to become even more important.

KPMG’s Head of People and Change in India, Vishalli Dongrie, noted that the next-generation HR function has an essential role to play, replacing traditional ‘best practices and cost-cutting’ approaches with bold new strategies, structures, tools, processes, and metrics.

The need for new tools and process expands past in-house HR teams to service providers like professional employer organizations (PEO). A PEO like Vensure Employer Services can offer any business the resources it needs to thrive like intuitive technology, Fortune 500 benefits packages, and recruiting assistance. A PEO can also extend interactive tools that you can use on a regular basis like evaluation templates, burnout guides, recruiting manuals, and 401(k) guides.

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