HUMAN RESOURCE STRATEGY

Human Resource Strategy

Human Resource Strategy

Human resource management (HRM) is a fairly new concept, first given general currency by the Harvard Business School in the early 1980s. Fifty years ago companies were still debating whether the term 'personnel department' should replace 'employment department' and in the 1920's even the largest companies commonly operated with simply a 'time office' and a separate 'welfare department'. This transformation of people management activities reflects a greater emphasis on individual rather than collective employee relations, an increase in the complexity of the employment process and the growth of an important strategic dimension based on the notion of 'human capital'.

In Europe, there has long been a considerable gap between the Anglo-Saxon and continental approaches to the way enterprises are organised and operated. Companies in the UK and Ireland have a significantly higher proportion of managers relative to other employees than companies in countries such as Germany, and particularly Italy.

Ratio of management to other employees

UK & Ireland

Netherlands, Belgium & Greece

Other established EU states

Estonia & Latvia

Other new EU states

1:5

1:8

1:15

1:8

1:16

Sources: UNECE, ILO.

This emphasis on management positions has itself been a factor in the development of human resource management within the British Isles. If we look at the proportion of professionally qualified human resource (HR) staff compared to other employees in medium-large companies across Europe, we find the UK has a ratio of just 1:127, while other (EU15) states (except for Ireland and Sweden) have an average ratio of 1:2,790. Although not all members and affiliates of professional personnel/HR bodies will be in management positions, the larger the HR department and the more sophisticated its staff, the more HRM jobs can be expected to exist.

Ratio of professional HR staff to other employees HR/E (medium-large companies only) *

UK

Ireland

Sweden

Poland (Kopec)

Other EU15 states

New EU states

1:127

1:189

1:402

1:166

1:2,790

1:5,105

Sources: Eurostat, EAPM, 2001 study by Dr J Kopec (Cracov University of Economics)* Companies employing 50+ employees. EU15 states are the 15 member states of the European Union prior to accession on May 1 2004.

What the above figures suggest is that the ratio of HR/E is even higher in the new member states. However, the evidence from a study of HR management in Poland by Kopec (2001) found a ratio of 1:166. This study indicates that one of the reasons why the HR/E ratio appears to be so high in many new and established EU states is because membership of professional bodies on the European continent is confined to senior HR practitioners. Many HR staff, particularly in eastern Europe, are performing routine administrative functions and do not hold professional HR qualifications.

Proportion of employees in companies employing 250+ people

Sectors

EU15 states

New EU states

Employees in industry, construction & services

35%

34%

Source: Eurostat

One other factor that might have explained the apparent paucity of HR professionals in the new EU states is discounted by the figures in the above table. An organisation's justification for operating an HR department is directly related to the number of people it employs. However, the proportion of employees working in companies employing over 250 staff is very similar ...