Though the human resources function was once a strong advocate for employees, in the 1980s things changed. As labor markets became slack, HR shifted its focus to relentless cost cutting. Because it was hard for employees to quit, pay and every kind of benefit got squeezed. But now the pendulum has swung the other way. The U.S. unemployment rate has been below 4% for five years (except during the Covid shutdown), and the job market is likely to remain tight. So today the priorities are keeping positions filled and preventing employees from burning out. Toward that end HR needs to focus again on taking care of workers and persuade management to change outdated policies on compensation, training and development, layoffs, vacancies, outsourcing, and restructuring. One way to do that is to show leaders what the true costs of current practices are, creating dashboards with metrics on turnover, absenteeism, reasons for quitting, illness rates, and engagement. It's also critical to prevent employee stress, especially by addressing fears about AI and restructuring. And when firms do restructure, they should take a less-painful, decentralized approach. To increase organizational flexibility and employees' opportunities, HR can establish internal labor markets, and to promote a sense of belonging and win employees' loyalty, it should ramp up DEI efforts.

Generative AI applications like ChatGPT demonstrate how large language models can quickly and cheaply perform some tasks that only humans could do before. Organizations might see an opportunity to use this technology to automate knowledge work, but implementing it comes with practical challenges that still require skilled employees involvement. This suggests that while newer AI tools might be better equipped to handle some tasks, they are unlikely to reshape organizations reliance on humans.

The leaders of business are a continued focus of interest in management research and in the broader society. Their attributes speak to social mobility, inequality, and who holds positions of power and influence in society. This article examines the attributes of the ten highest-ranked executives of the largest corporate enterprises in the United States-the Fortune 100-and compares how they have changed over the past 40 years, a period when many assumptions about businesses and the people who run them have changed. While there has been significant change in some areas, such as the increase in the proportion of women and foreign-born executives and the rise in outside hiring, there is no evidence of an increase in younger leaders who advance faster than their predecessors and spend an ever-shorter time with their employer. In fact, top executives now are as old as their peers were in the 1950s, and their tenure with their employer is rising.

Although gender representation among senior leaders has improved since 1980 (there was nowhere to go but up), there's still a lot of work to do. An analysis of Fortune 100 executives' career histories and demographics over the past 40 years shows where companies have made strides toward diversity at the top and where they can do better. To get closer to parity, employers must invest more in leadership development overall and give women more equitable access to growth opportunities.

For decades, the business world has embraced worker empowerment. But recently a countermovement--workforce optimization--has been on the rise. It treats labor as a commodity and seeks to cut it to a minimum by using automation and artificial intelligence, tightly controlling how people do their jobs, and replacing employees with contractors. This approach is especially prevalent in the tech sector and the gig economy. And it is cause for deep concern, says Wharton professor Cappelli. Optimization appeals to most executives because they've been taught how to do it and understand it. It aligns with hard priorities, like lowering costs, that make Wall Street happy. Yet there's no evidence that it improves business results. Moreover, history suggests that seeing people management as solely an engineering challenge leads to enormous problems. Taking responsibility away from workers demotivates them and undermines productivity and innovation. When algorithms make all the decisions, it isn't even clear how employees can make suggestions. Though many processes can still be improved by optimization, managers shouldn't choose it over empowerment. The key is to find the right mix of the two approaches, as the successful "lean production" model first introduced by Toyota does.

There is a substantial gap between the promise and reality of artificial intelligence in human resource (HR) management. This article identifies four challenges in using data science techniques for HR tasks: complexity of HR phenomena, constraints imposed by small data sets, accountability questions associated with fairness and other ethical and legal constraints, and possible adverse employee reactions to management decisions via data-based algorithms. It then proposes practical responses to these challenges based on three overlapping principles-causal reasoning, randomization and experiments, and employee contribution-that would be both economically efficient and socially appropriate for using data science in the management of employees.

Hated by bosses and subordinates alike, traditional performance appraisals have been abandoned by more than a third of U.S. companies. The annual review's biggest limitation, the authors argue, is its emphasis on holding employees accountable for what they did last year, at the expense of improving performance now and in the future. That's why many organizations are moving to more-frequent, development-focused conversations between managers and employees. The authors explain how performance management has evolved over the decades and why current thinking has shifted: (1) Today's tight labor market creates pressure to keep employees happy and groom them for advancement. (2) The rapidly changing business environment requires agility, which argues for regular check-ins with employees. (3) Prioritizing improvement over accountability promotes teamwork. Some companies worry that going numberless may make it harder to align individual and organizational goals, award merit raises, identify poor performers, and counter claims of discrimination-though traditional appraisals haven't solved those problems, either. Other firms are trying hybrid approaches-for example, giving employees performance ratings on multiple dimensions, coupled with regular development feedback.

Complaints against HR, which are nothing new, have a cyclical quality. They're driven largely by the business context. When companies are struggling with labor issues, HR is seen as a valued leadership partner. When things are smoother all around, managers wonder what the function is doing for them. This is a moment of enormous opportunity for HR leaders to separate the valuable from the worthless and secure huge payoffs for their organizations. The author outlines some basic but powerful steps they can take: (1) Set the agenda. CEOs are rarely experts on workplace issues, so the HR team can show them what they should care about and why, such as layoffs, recruiting, flexible work arrangements, and performance management. (2) Focus on the here and now. This means continually identifying new challenges and designing tools to meet them. (3) Acquire business knowledge. HR needs first-rate analytic minds to help companies make sense of all their employee data. (4) Highlight financial benefits. HR departments don't usually calculate ROI for their programs, but quantifying costs and benefits turns talent decisions into business decisions. (5) Walk away from time wasters. Often programs lack impact unless top executives lead them, transforming the culture. Otherwise HR is just a booster for initiatives it can neither enforce nor measure.

In an HBR article in January 2005, Cappelli and Hamori compared leaders in the top 10 roles at each of the Fortune 100 companies in 1980 with those in 2001. Among their findings were a sharp decline in the number of senior executives who had spent their entire careers with one company, and a corresponding uptick in rapidly advancing young executives who spent less time with any one employer. In this article they and Bonet extend that analysis to 2011. Perhaps the most noteworthy changes they've found are demographic. For example, the percentage of executive women has risen quite a bit. But the 2008 recession caused some interesting developments: Financial institutions are bringing in more senior executives from outside than they did a decade ago; leaders have been hesitant to leave their organizations for new opportunities; and companies have held on to even underperforming executives to maintain stability. Generously illustrated with graphics, this article profiles today's leaders in four areas--career trajectory, education, diversity, and hierarchy within the senior ranks.

Line managers are taking on duties that once belonged to human resources. They can benefit from emerging best practices and can start by asking and answering the five key questions the author explores.

HBR asked top management thinkers to share what they were resolved to accomplish in 2011. Here are their answers: Joseph E. Stiglitz will be crafting a new postcrisis paradigm for macroeconomics whereby rational individuals interact with imperfect and asymmetric information. Herminia Ibarra will be looking for hard evidence of how "soft" leadership creates value. Eric Schmidt will be planning to scale mobile technology by developing fast networks and providing low-cost smartphones in the poorest parts of the world. Michael Porter will be using modern cost accounting to uncover-and lower-the real costs of health care. Vijay Govindarajan will be trying to prototype a $300 house to replace the world's poorest slums, provide healthy living, and foster education. Dan Ariely will be investigating consumers' distaste for genetically modified salmon, synthetic pharmaceuticals, and other products that aren't "natural." Laura D. Tyson will be promoting the establishment of a national infrastructure investment bank. Esther Duflo will be striving to increase full immunization in poor areas of India. Clay Shirky will be studying how to design internet platforms that foster civility. Klaus Schwab will be undertaking to create a Risk Response Network through which decision makers around the world can pool knowledge about the risks they face. Jack Ma will be working to instill a strong set of values in his 19,000 young employees and to help clean up China's environment. Thomas H. Davenport will be researching big judgment calls that turned out well and how organizations arrived at them. A.G. Lafley will be proselytizing to make company boards take leadership succession seriously. Eleven additional contributors to the Agenda, along with special audio and video features, can be found at hbr.org/2011-agenda.

Bob Antice is well-loved and famously connected in the music industry. For decades he was a star-the most successful salesman in the company's history, friend and mentor to generations of performers, and a sought-after speaker at industry events. Bob's work from the mid-1970s to the early 1990s put Powerful on top: The company outsold all its competitors for eight straight years in the 1980s. And when he wasn't finding new ways to sell records, Bob was discovering new performers the label's talent-and-repertoire staff had somehow missed. But now his sales are flagging, and the label's CEO wants him out. Bob's current manager isn't sure that what he offers as a mentor and a public face for Powerful is relevant in the age of iPads, Shazam, and Live Nation. Still, Bob has an important personal relationship with the label's most important performer. Should he stay or should he go? Two commentaries are attached to the case, one from Peter Cappelli and Bill Novelli, the authors of Managing the Older Worker, and the other from Tamara J. Erickson, the author of "Retire Retirement" and "What's Next, Gen X?"

Bob Antice is well-loved and famously connected in the music industry. For decades he was a star-the most successful salesman in the company's history, friend and mentor to generations of performers, and a sought-after speaker at industry events. Bob's work from the mid-1970s to the early 1990s put Powerful on top: The company outsold all its competitors for eight straight years in the 1980s. And when he wasn't finding new ways to sell records, Bob was discovering new performers the label's talent-and-repertoire staff had somehow missed. But now his sales are flagging, and the label's CEO wants him out. Bob's current manager isn't sure that what he offers as a mentor and a public face for Powerful is relevant in the age of iPads, Shazam, and Live Nation. Still, Bob has an important personal relationship with the label's most important performer. Should he stay or should he go? Two commentaries are attached to the case in R1009M and included in R1009Z, one from Peter Cappelli and Bill Novelli, the authors of Managing the Older Worker, and the other from Tamara J. Erickson, the author of "Retire Retirement" and "What's Next, Gen X?"

Until recently India was seen by Western businesses primarily as a source of cheap, low-skill labor. But over the past decade the country has attracted a flood of high-skill jobs from the West. Meanwhile, India's economy has grown at roughly 9% a year, and some of its largest companies have grown at twice that rate. What accounts for this? A host of economic, policy, and other environmental factors have played important roles, but the authors ascribe much of this success to the distinctively inward-focused managerial approach of Indian leaders. Through interviews at 98 of the largest India-based companies, they have identified four ways in which these leaders develop and motivate employees: Far more than their Western counterparts, they create a sense of social mission, engage employees in give-and-take, empower them to find solutions, and invest in their training and development. Western leaders should understand the managerial approaches that have fueled the rise of India's largest companies, and mindfully adapt them.

Most firms have no formal programs for anticipating and fulfilling talent needs, relying on an increasingly expensive pool of outside candidates that has been shrinking since it was created from the white-collar layoffs of the 1980s. But the advice these companies are getting to solve the problem--institute large-scale internal development programs--is equally ineffective. Internal development was the norm back in the 1950s, and every management-development practice that seems novel today was routine in those years--from executive coaching to 360-degree feedback to job rotation to high-potential programs. However, the stable business environment and captive talent pipelines in which such practices were born no longer exist. It's time for a fundamentally new approach to talent management. Fortunately, companies already have such a model, one that has been well honed over decades to anticipate and meet demand in uncertain environments: supply chain management. Cappelli, a professor at the Wharton School, focuses on four practices in particular. First, companies should balance make-versus-buy decisions by using internal development programs to produce most--but not all--of the needed talent, filling in with outside hiring. Second, firms can reduce the risks in forecasting the demand for talent by sending smaller batches of candidates through more modularized training systems in much the same way manufacturers now employ components in just-in-time production lines. Third, companies can improve their returns on investment in development efforts by adopting novel cost-sharing programs. Fourth, they should seek to protect their investments by generating internal opportunities to encourage newly trained managers to stick with the firm. Taken together, these principles form the foundation for a new paradigm in talent management: a talent-on-demand system.

By comparing the top executives of 1980's Fortune 100 companies with the top brass of firms in the 2001 list, the authors have quantified a transformation that until now has been largely anecdotal. A dramatic shift in executive careers, and in executives themselves, has occurred over the past two decades. Today's Fortune 100 executives are younger, more of them are female, and fewer were educated at elite institutions. They're also making their way to the top more quickly. They're taking fewer jobs along the way, and they increasingly move from one company to the next as their careers unfold. In their wide-ranging analysis, the authors offer a number of insights. For one thing, it has become clear that there are huge advantages to working in a growing firm. For another, the firms that have been big for a long time still provide the most extensive training and development. They also offer relatively long promotion ladders--hence the common wisdom that these "academy companies" are great to have been from. While women were disproportionately scarce among the most senior ranks of executives in 2001, those who arrived got there faster and at a younger age than their male colleagues. Perhaps the career hurdles that women face had blocked all but the most highly qualified female managers, who then proceeded to rise quickly. In the future, a record of good P&L performance may become even more critical to getting hired and advancing in the largest companies. As a result, we may see a reversal of the usual flow of talent, which has been from the academy companies to smaller firms. It may be increasingly common for executives to develop records of performance in small companies, or even as entrepreneurs, and then seek positions in large corporations.

Ninety percent of large U.S. companies are already recruiting via the Internet. By simply logging on to the Web, company recruiters can locate vast numbers of qualified candidates for jobs at every level, screen them in minutes, and contact the most promising ones immediately. The payoffs can be enormous: it costs substantially less to hire someone on-line, and the time saved is equally great. In this article, Peter Cappelli examines some of the emerging service providers and technologies--matchmakers, job boards, hiring management systems software, and applicant-screening mechanisms that test skills and record interests. He also looks at some of the strategies companies are adopting as they enter on-line labor markets. Integrating recruiting efforts with overall marketing campaigns, especially through coordination and identification with the company's brand, is the most important thing companies can do to ensure success in on-line hiring. Along the way, Cappelli sounds two cautionary notes. First, a human touch, not electronic contact, is vital in the last steps of a successful hiring process. Second, companies must make sure that on-line testing and hiring criteria do not discriminate against women, disabled people, workers over 40, or members of minority groups. When competition for talent is fierce, companies that master the art and science of on-line recruiting will be the ones that attract and keep the best people.

Open competition for other companies' people, once a rarity in business, is now an accepted fact. Fast-moving markets require fast-moving organizations that are continually refreshed with new talent. But no one likes to see talent leave; when a good employee walks, the business takes a hit. It's futile to hope that by tinkering with compensation, career paths, and training efforts, you can wall off your company from today's labor market. But there is an alternative: a market-driven approach to retention based on the assumption that long-term, across-the-board loyalty is neither possible nor desirable. By taking a hard look at which employees you need to retain and for how long, you can use highly targeted programs to keep the required talent in place. Most companies today rely on compensation to build loyalty, but compensation is only one of many useful retention mechanisms. You can redesign jobs to reduce turnover: UPS kept many more drivers by shifting the tedious job of loading trucks to other employees. You can promote loyalty to particular projects or to work teams. You can hire people who aren't in high demand and place valuable employees in locations where they won't be constantly tempted by job offers. You can team up with other companies to offer cross-company career paths. And when there's no effective way to prevent attrition, you can learn to live with it: outsource, strengthen recruitment, standardize jobs, cross-train employees, and organize work around short-term projects. If managing retention in the past was akin to tending a dam, today it is more like managing a river. The object is not to stop water from flowing but to control its direction and speed.