Monster has a good article on who should be HR generalists (typically people who strive for diversity and have a heavy tolerance for unpredictability) while specialists are people who are detail oriented and like being known as 'experts'. As the article says:
When the economy is strong, specialists in certain areas -- recruiting, for example -- can make a bundle. But what happens when the economy turns in the other direction? Will you be marketable?Generalists tend to be a bit more isolated from the effects of a downturn. In a downturn, generalists often pick up more of the responsibilities of downsized specialists.
On an Orkut HR forum someone asked what is the future of HR generalists. My answer was that HR generalists have a a great future so far as they:
1. Move from transactions to being strategic
2. Focus on building business credibility.
3. Building higher order skills like facilitation and change management skills