Long reads

Where does HR come from? A brief history of the people profession

29 Sep 2021 By Robert Jeffery

From its origins in welfare to its digital reinvention, the story of HR in the UK is simultaneously the history of an economy in search of an identity. The CIPD's Work. magazine spoke to a group of experts about their own perspectives on the past century

The speakers

  • Peter Cheese Chief executive of the CIPD and author of The New World of Work
  • Professor David Clutterbuck HR consultant, author and speaker
  • Dr Wendy Hirsh Principal associate at the Institute for Employment Studies, researcher and consultant
  • Professor Richard Saundry Chair in HRM and employment relations, Sheffield University Management School 
  • Professor Paul Sparrow Emeritus professor in international human resource management, Lancaster University Management School

The early years

The formation of the Welfare Workers’ Association – the forerunner of the modern CIPD – in 1913 shows that for the first time, wellbeing is on the organisational agenda in the UK, albeit only among more progressive employers. The advent of World War I and an influx of women into factories leads to 1,400 welfare supervisors being mandated in workplaces and a growing sense of professionalisation, though not everyone approves: in 1917, the early trade unionist Mary Macarthur claimed “there is no word in the English language more hated amongst the women workers of today than that of ‘welfare’”.

Richard Saundry The origins of personnel were in welfare officers and other individuals who were employed as factories grew and the UK began to industrialise. As people started to work in factory environments where you had a finer division of labour, you inevitably had concerns around health and safety and definitely around women and children working, as strange as that may sound now. 

The shift in work from the cottage and home into the factory inevitably meant people were at risk. Some of the more far-sighted employers realised they got greater productivity out of people who were healthy and reasonably well cared for – even when labour was very disposable, there was still a cost attached to it. In many ways, that’s still something that drives investment in HR today. 

Religion had a big part to play, too – the idea of temperance was very specific to that time. You also had the nascent trade union movement, which perhaps led to an acceptance that if the employer didn’t try to look after employee welfare there was the potential for activism. 

Peter Cheese What the Welfare Workers’ Association signalled was the idea of the human at work, rather than just getting people into factories and making them work like slaves. Cadbury, Lever Brothers and others had a more humanistic way of thinking about their workforce. You can look too at Henry Ford and what he was doing at a similar time in the US, bringing in the five-day week, decent pay and paid leave. He realised that made employees more productive and more able to buy his cars too. But there were other voices out there, as well, people like Karl Marx who talked about moving away from a world where people were there to be exploited.

Wendy Hirsh The history of having to organise people to do work is of course ancient. The Chinese civil service used entrance exams in its recruitment well over 1,000 years ago. The Roman Army expected you to work your socks off and go to godforsaken places, but when you retired, you got a pension and some farmland. It’s a rather more coherent reward strategy than many employers manage today.

Although HR tells itself this narrative that it has moved from welfare to a more professional and strategic function, I suspect there was always more than that happening. There must have been someone in the Wedgwood potteries training workers to throw pots the same size and shape, and indeed someone recruiting and paying them too.

So many of the things the modern HR function does were always needed, but they were not necessarily organised in the same way. 

Peter Cheese We keep citing the pioneering companies but the average working conditions at the time were appalling. Health and safety came about because people were dying in the workplace – it was still the predominant view that workers were units of labour and means of production rather than people. And if we’re honest, that sort of thing was still going on for much of the last century.

Wendy Hirsh Today the term paternalism is usually pejorative. But we can think about it as employee engagement. Why did Cadbury bother to have schools, housing and healthcare on site? To have a serious understanding of and pay attention to what employment looks like from the employee’s end is not paternalistic. It is fundamental business sense.

The march of industrialisation

Developments in the wake of World War II improve living conditions for many: the expansion of national insurance and the formation of the National Health Service ensure it is not just those with far-sighted employers who enjoy a basic level of healthcare. Employees rush to join trade unions to use their new-found voice and the Labour party challenges the asset-owning establishment. But by the 1970s, organised labour is involved in high-profile clashes with businesses as the economy industrialises, with the car and print industries among the most affected. It is a chance for personnel departments newly schooled in psychology and organisational behaviour to prove their industrial relations mettle.

Richard Saundry This is a slightly crude and simplistic analysis, but in the post-war period as British industry started to develop, you saw a cadre of management in big organisations who were ex-military officers. In the main, they weren’t very good at managing. I’m sure some made good leaders, but we had a relatively high level of unqualified managers in big industries.

At the same time, you had the rapid development of shop steward organisers who were quite often very well educated by their unions. They were quite militant – they had often come out of the war, though they generally weren’t officer class, and they were strong leaders on the shop floor. 

Personnel managers came into that from the late 1960s and actually did an incredibly important job. They were a mile away from the welfarist types that a lot of HR textbooks have painted. They were people who had to negotiate with smart, powerful trade union representatives in really complex situations.

The reason we had a lot of militancy in some industries was because of the clash between these educated union reps and their inadequate management. There’s that famous quote Barbara Castle used in the 1960s that management get the trade unions they deserve. That’s exactly what happened. 

David Clutterbuck HR values transparency in a way other departments in organisations don’t. After the second world war, so many of the people in HR came from the military. If it was felt that you had leadership skills and could understand structures, you’d be good for personnel. The command and control era of HR was very much related to those people. 

Wendy Hirsh The UK has tended to look to American business schools and large American corporations for clever HR ideas. We imported performance-related pay, for example – not actually a bright idea after all. Work psychology has tended to dominate UK HR thinking, ousting other perspectives like industrial sociology and even labour market economics.

If you’re working in HR, only thinking psychologically about the individual is an enormous mistake. Even thinking seriously about teams is often not evident in HR thinking. HRM treats the person as the unit of production. If your performance is rubbish, it’s your fault. It’s not that the organisation is rubbish, or your team is bullying you, or your job is badly designed.

Peter Cheese Unions got very focused on pay, collective bargaining and the industrial unrest of the 1970s. It was about calling out the inherent tension between the workforce and the employer. A lot of people point to Ford [in the UK] as one of the birthplaces of modern HR. It was a place where the heartland of HR, industrial relations, probably worked reasonably well – HR was sitting in between employers and workers, trying to understand their interests and mediate between them. That role led to some of the growth in HR and also made HR professionals think they had a dual responsibility – the needs of the workforce and the needs of the employer. But for every good example like Ford, you can point to others like British Leyland which were catastrophic.

Paul Sparrow In a way, that welfare model which got subsumed by industrial relations responsibilities ran for a long time. Most of what we would currently think of as an HR function was done by very few people. You would have succession planning, but only for a handful of people at senior level. That didn’t really shift that much until the 1970s – for me, the first break point was Thatcherism, and the 1979-1982 recession, which was massive. It was when we tried to find a language to talk about the things people management functions should be doing. As you got into the 1980s, the societal context was one of huge restructuring in industries that were suddenly being liberalised. At a corporate level, it was about survival for many organisations and trying to stabilise in this new industrial world.

Wendy Hirsh The tenor of employee relations has varied from one industry to another and over time. For example, I worked with an HR director in the Post Office in the 1980s and the business was both quite confrontational and quite chummy at the same time. Key employee relations managers were often ex-union officials. This was the era of the drinks cabinet, and beer and sandwiches. Management and the workforce understood each other very well. From the outside, it may have looked like head-on disputes – a view often talked up by politicians and the press. On the inside, these people were dealing with old industries that needed to be radically reinvented. 

Paul Sparrow In the 1970s, the debate was all about automation and how would you partition time across society as you automated. That went away for about 40 years and now it’s back. What are we going to do if we automate knowledge work? 

The 1980s was the start of individualisation, which meant differentiating between people. The upside was that organisations realised that people and their behaviour were more important than they had previously given credence to. They put resources behind it. But of course, the moment you start to do that, some people benefit more than others and you began to see all those debates about resources being carved up, the war for talent, executive excess. The spoils were not shared equally, unfortunately, and that led us eventually to the global financial crisis, when everything got recalibrated.

The modern era

Dave Ulrich’s seminal work, Human Resource Champions, is published in 1997, and may or may not reinvent the way the profession is organised – but it is emblematic of a function seeking to become more strategic and more embedded as knowledge work proliferates. HR spends the turn of the millennium experimenting with outsourcing and digitisation of its services and processes, but also begins to gain the much vaunted ‘seat at the table’ in many sectors. 

Paul Sparrow By the 1990s, you began to see more recovery and we began to talk about the competencies we need in an organisation and what that means for individuals. HR had almost no involvement in the organisation design aspect previously but they were able then to start thinking about processes, behaviours, skills and so on. 

Peter Cheese With the shift towards knowledge work, it became important to engage workers. You saw human behavioural science and motivational theory, expressed by people like [Frederick] Herzberg and [Abraham] Maslow, that recognised human beings were not machines but had greater dynamics at play. 

We’ve seen demographic changes, too, particularly in the last couple of decades. Young people coming into work are saying ‘if you think I’m just going to rock up, take my money and go home and that’s all that counts, you don’t understand me’. You could visibly see that shift among the millennials and Gen Ys coming into the workforce and asking questions about purpose, asking for support and coaching from their managers. 

David Clutterbuck It’s fascinating to watch how HR has evolved in the hate stakes. If you go back 30 years or so, the department everybody hated most was HR. That was quickly overtaken by IT, then along came compliance, and now in most organisations purchasing is the one everyone hates the most. It’s a positive progression in some ways. 

Wendy Hirsh Renaming the personnel function human resources was not really a bright move. In everyone else’s ears it sounds like such a negative thing. It led people down that path of thinking of the workforce only as a collection of individual units of resource, not as actual people.

We’ve spent the last 20 years unlearning a lot of that and re-learning the importance of what motivates people at work and what managers and leaders need to do. We now have engagement and wellbeing as high-profile issues and we see job titles shifting in all sorts of interesting ways, from HR director to chief people officer, for example. 

Peter Cheese The war for talent emerged in the late 1990s and early 2000s. We’ve moved a long way from what that McKinsey report initially described, but it definitely drove HR – if you’re going to go out and hire the best, you need a proposition and you need to retain and engage them. 

It all drove a more strategic agenda, but even in the early 2000s, HR was still a profession that wasn’t confident enough. For a long period, HR found itself in a position of shifting too much to being the servant of management in order to justify its existence and earn its seat at the table. Arguably, it lost sight of what’s really important about people and organisational culture, focusing too much on being efficient and creating strategies around consolidation and standardisation. 

Wendy Hirsh The adoption of Ulrich’s ideas in a mechanical rather than a conceptual way unintentionally segmented HR work and the job roles in the function into the strategic versus the operational. This made so-called operational work seem less important and less skilled. 

Peter Cheese Ulrich always says he never told HR his model would solve all their problems. Its adoption was driven firstly by an obsession with an idea of best practice but also an indication of HR’s insecurity in needing to grab a model. They even named it after Dave Ulrich when it was no more than finance were doing – it was just a shared services partnership with a centre of excellence. HR wasn’t terribly confident at that time. 

The future

The Covid pandemic is demonstrating the value of people in business and the way HR can act as a strategic enabler during times of profound change. But can the function use it as a springboard to bring about the humanistic shifts that will be required of our economies over the next 100 years?

Richard Saundry HR is in a difficult situation. For all their strategic endeavour and aspiration, there is simply no evidence HR is any more influential than it was 20 or 30 years ago. It still doesn’t have a seat in the boardroom, which I think is crucial. The things organisations and managers need from HR are the things HR has said it doesn’t want to do any more – such as dealing with employment relations. They want to advise and do the strategic stuff. It’s counter-aspirational. But when you look back at HR’s journey, it’s been a hugely important one, in a relatively short time.

Paul Sparrow In a way, what we’re seeing now is that 2008 recession play out through things like Covid and we’re beginning to deal with the institutional reaction to the changed world we live in. What role the HR function plays in that, I don’t know.

David Clutterbuck People now accept that we have to think more systemically, and that’s what enables HR to add value. Nobody else in the organisation is really thinking systemically. They’re all thinking about the next targets, even the board. The HR role is evolving into being the connector of the organisation to its values and the ecosystem around it. It’s looking at organisations as complex, adaptive systems. It’s not just policing people, it’s about HR becoming the real strategic thinkers. 

Richard Saundry A world without any HR would be hugely problematic – large numbers of employees would have a significantly worse experience. The counter-argument is that if you didn’t have HR, you’d have managers who had better people management skills. I’m not convinced. HR is there for a very good reason. There needs to be a buffer between operational management and workers. Arguably that was the origins of the profession in the first place. 

Peter Cheese The pandemic has greatly accelerated the positioning of people as critical to the business agenda. This is such an opportunity to be more front and centre and to reinforce why supporting and engaging people at work is so important. There’s massive change going on and we need a profession that is at the centre of business thinking, is able to develop with the business and is driving principles around inclusion, transparency, skills. We need to engage with the huge agendas that are being discussed – that means investing in our skills and broadening the profession to attract different types of skills and experience.

This article was first published in the Autumn 2021 issue of Work, the magazine for CIPD Fellows

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