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The Impact of Organizational Change & Evolution on the Human Resource Management Function

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Organizational change and evolution impact the human resource management function in both tactical and strategic ways. Reassigning employees to new departments, eliminating positions, creating new roles and reducing the workforce all contribute to the way a company operates. Over the years, the HR role has evolved from being primarily an administrative one to having a real strategic function beyond recruiting, payroll, benefits and performance management. Now, according to the Society for Human Resource Management, three critical areas contribute to a company’s business strategy: staffing, training and benefits.

Recruiting Employees

As businesses decide to hire new employees, outsource work or replace retiring employees, the HR department needs to respond quickly to fill vacant spots. Particularly if the skills and knowledge required to do the work represent a complex area, the HR department must rely on existing relationships to make the appropriate connections and get qualified candidates in for interviews and background checks in a timely manner to respond to business demands. Once people are hired, the HR department also typically takes responsibility for orienting the new employees to the workplace. When a large number of employees require this treatment all at once, formal programs begin to replace ad hoc coaching and mentoring.

Managing Talent

As an organization grows and changes, the workers required to complete job tasks changes. Managers typically need to regularly assess employee performance and address gaps. Additionally, these reviews allow managers to spot top talent to nurture and reward these individuals for their diligence with recognition, promotion and financial gains. In a global marketplace, the HR department may find employees that can do the company’s work at a fraction of the cost it currently incurs.

Developing Leaders

Succession planning ensures that subordinates can take over when current leaders retire or move on to other opportunities. If the company grows rapidly, there may not be people ready to take on management roles. An effective HR function steps in and conducts leadership training programs that prepare participants to delegate, communicate, inspire and motivate the workforce. For example, the federal government Office for Personnel Management offers classes in conflict management, decisiveness, interpersonal skills, communication and problem solving.

Managing Costs

Benefits programs comprise a large part of the HR budget. As the organization matures, emphasis on wellness and preventative programs can help defray medical, hospital and dental costs. Escalating costs demand that the HR department constantly assess options to maintain cost-effectiveness. For example, some companies shift to a self-insured model with stop-loss insurance to control costs. As companies grow, standardizing policies and procedures becomes imperative, as well. Additionally, the HR department plays a critical role in ensuring the company complies with federal, state and local laws.


Tara Duggan is a Project Management Professional (PMP) specializing in knowledge management and instructional design. For over 25 years she has developed quality training materials for a variety of products and services supporting such companies as Digital Equipment Corporation, Compaq and HP. Her freelance work is published on various websites.

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