Skip to the end of you don't want to read the details. The change was made to soften and mask the reality behind the term. Before the couple decades between the 1920s and 1940s, terms often reflected a more truthful nature of what they described. For example: the Department of Defence was the Department of War. Public Relations was the Department of Propaganda. Human resources was the Department of personnel administration.
These changes occurred for a cultural reason and there were a few key thinkers who were responsible for the rise in popularity of creating new, soft terms for things that would allow people to more easily accept the status quo, would cause people to have a kind of nuanced idea about what something really was, or would cause someone to assume something was always the way it was with an unlikelihood of ever questioning how things became the way they were.
Edward Bernays was one of those people who was transformative of culture in this way. He was Sigmund Freud's nephew. The person who coined the term “human resource” in the idealistic sense most people think of is John R. Commons who coined the term in 1893 as a way of highlighting the importance of the human being. The person who coined the real meaning of human resources, in the more realistic pejorative sense, are individuals from the 1950s such as Peter F. Drucker and E. Wight Bakke, where he saw people as a means to an end.
The term Human Resources was wilfully and deliberately misconstrued by 1950s economists, so that businesses would employ the term to make people think the department was pro-the human being side of people when really it was and still is just a department to produce a means to an end. In other words: the envisioning of the rollback of the quality of the life of the common worker was well underway by the 1950s. We are now experiencing the part of this planning where it becomes painfully obvious to most of us just how badly we are being fucked over by the system.
Tl;dr human resources is a wilfully deceitful term created by economists in the 1950s to fuck with the psyche of the American worker.