A bird’s-eye view of the relationships between economic complexity, time, and the importance of HRM actors

Abstract

This study adopts a contextual approach to understand the prominence of HRM department specialists, outsourced HRM service providers and line managers in the HRM function. Drawing on resource dependence theory and research on the professionalisation of HRM, we look at how national economic complexity (EC) and the passage of time shape the need for these actors in an organisation’s HRM. Our analysis is based on Cranet data from five survey rounds conducted between 2000 and 2022, covering 30,651 organisations across 54 countries. Our results show that higher levels of EC are associated with smaller HRM departments, less devolution and greater outsourcing of non-core HRM activities. Over time, HR staff ratios and outsourcing of non-core and core HRM activities increase, while devolution declines. Interestingly, we also observe that the negative effects of EC on HR staff ratios and devolution are eventually reversed. This suggests that in more complex economies, the prominence of all HR actors increases over time, which reflects a growing organisational commitment to managing people. Our findings highlight how economic and temporal contexts shape the HRM function.