HR Salaries Have Fallen Since 2002

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An interesting article in HR Magazine has reported that HR salaries have decreased in real terms by 18% between 2002 and 2014………..

Research suggests that widespread adoption of the Ulrich model could be behind the decrease

The average full-time salary in HR dropped in real terms by 18% between 2002 and 2014, according to research from workforce management provider Randstad In-House Services.

Despite this, the function’s aggregate wage bill is rising as the number of people employed in the sector increases.

The pay squeeze does not appear to have been linked to wider economic conditions. In the pre-recession period of 2002-06 the average salary of a full-time HR professional fell 5.9%. During the recession, and in its aftermath, HR’s average pay packet fell by 7.2%. A further 7.8% decline was recorded post-recession, between 2011 and 2014.

Sally Cleary, managing director of Randstad In-House Services, said that HR professionals have seen their average pay fall “like a stone” since 2002.

“Gone are the days of highly-paid HR all-rounders,” she said. “Thanks to the wide adoption of the Ulrich model they have been replaced by less experienced and less well-paid HR executives who are masters at performing their own siloed function. The result is a more effective HR machine staffed with people earning less than their all-rounder predecessors.”

The researchers suggest that the widespread adoption of the Ulrich model could be behind the rise in the number of people employed in HR, but also the fall in average wages. “The massive increase in the industry’s aggregate pay since 2011 has been driven by an explosion in the volume of HR jobs,” Cleary said. “As the Ulrich model has been adopted so widely the profession has become more specialised and department-specific, while the number of roles in the sector has proliferated.”

SIGplc group HRD Linda Kennedy McCarthy said that the role of the HRD has changed in the past few years. “Formerly, those of us who have now progressed to the level of group HR director would have typically done a range of roles, possibly starting with HR administration/operations and ER roles, then working through some of the specialisms to reach an HR manager position,” she told HR magazine.

“While there is benefit in removing a lot of the pure HR administration from these roles – through automation, employee/manager self-service, and a shared service centre approach – there is also something to be said for gaining experience across a wide range of HR issues and understanding the basics before progressing to the more ‘strategic’ roles, which tend to be the focus of today’s HR business partners.”

However, she said she was not certain that the Ulrich model is behind the increase in jobs and decrease in wages.

“I think the Ulrich model has delivered mixed results, depending on how it has been implemented, and many of my peers are now looking at a slightly mixed model, which is not ‘pure’ Ulrich but meets their business needs,” she said. “It is interesting that wages appear to have gone down but it could be due to the compartmentalisation of knowledge and experience, which then leads to a narrower skillset and ultimately expertise. It would be great to try and correlate this data with causation factors and really understand what is driving it.”

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