The last decade has brought a decisive change to the HR industry. The 2010s were characterized by developments ranging from a widespread recession to accelerating technological change, particularly that of HR software, and of course the emergence of a new generation of workers.
It’s safe to say the HR challenges of 10 years ago identified by the SHRM Foundation as succession planning, and shaping and training leadership are simply not what we face now.
Benefits schemes are increasingly consumer-driven. Annual performance reviews are being replaced by regular performance check-ins. Remote working is no longer the exception, and flexible arrangements are increasingly becoming a workplace norm. Social media, once seen as an impediment to productivity, is now a mainstay. The gig economy is seeing a generation of workers job-hopping from one company to another, prioritizing the promise of new skills over tenure. Furthermore, the importance of analytics is being increasingly understood by HR as a vehicle for achieving strategic ends.
But, what will the 2020s bring to HR? Here are 5 ways the HR industry will change in the 2020s:
New technology will continue to shape and direct HR
The 2010s saw the dramatic transformation of the HR industry thanks in large part to automation. A study by HR.com and Iron Mountain on the state of automation aptly sums up how traditional HR functions such as payroll management, benefits, and attendance are the top 3 concerns, and it projected onboarding and records management to be automated in the future. The increased adoption of automation will continue to streamline HR processes such as:
recruitment
onboarding
performance management
payroll
compliance
HR analytics
…to the benefit of organizations.
Doing so will enable HR’s potential by giving greater insights, effective methods for record management, better resource calculation, and closer collaboration across teams, departments, and locations which will all serve to drive productivity and contribute to the business.
As automation becomes less and less escapable, HR departments will need to help arm organizations with the technological skills and know-how to understand HR software and the like, empowering the HR function.
HR will increasingly utilize analytics to bring value to firms
DDI’s Global Leadership Forecast 2018 reported that HR professionals who are confident with analytics are 6.3 times more likely to get opportunities for advancement and 3.6 times more likely to have a strong reputation with senior business leaders. The world is becoming exponentially data-driven, and these analytical skills are no longer a ‘nice to have’.
HR analytics have been predicted by many to be the most powerful transformational force in the industry over the next decade. By aligning HR data and initiatives with an organization’s strategic goals, HR will elevate accordingly in its influence, moving from the position of operational organ towards the center of strategy. Data such as turnover ratios, employee engagement levels, workspace usage, and other new metrics will allow HR departments to become more strategic. In allowing HR to model findings, gain actionable insights and to make formidable projections to help achieve business goals (goals such as attracting, managing, and retaining employees to improve ROIs), HR will reach a level of influence unlike that before.
However, as HR analytics can only become actionable with the right HR teams adopting them, HR departments may need to prioritize training their professionals or staffing their teams with people with the right skillsets to analyze and report on data, comply with data laws, and to align actions and insights with ROIs. Indeed, we saw this trend towards the end of the 2010s. As SHRM reports, ‘59% of organizations expect to increase the number of positions requiring data analysis skills over the next five years.’ Moreover, in the 2020s, the US Bureau of Labor Statistics anticipates HR employment is expected to grow 21%. This raises new challenges for HR departments – the key being to find the right mix of analytical skills and HR knowledge and to train existing employees in technical expertise.
HR will see an increase in outsourcing
The development of and uptake by businesses of HR technology, such as implementing HR systems will contribute to an increase in outsourcing in HR. Employees will increasingly participate in the HR process by adopting self-service technologies, streamlining HR administration. Meanwhile, regulatory developments – particularly concerning employment law or benefits compliance – will drive organizations to complement their inhouse HR workforce with outsourced specialists to navigate such complex issues.
Inhouse HR roles will become more strategic
Accordingly, strategy will best characterize the role of the 2020s in-house HR professional. Successful in-house HR departments will need to work closely with other business areas in order to make accurate projections and to increase their strategic value to the organization.
Because of the increasing importance of specialist expertise, more and more HR hopefuls will likely need to be formally educated in HR to be successfully employed. This might mean specializing significantly earlier, and training will very likely involve data analytics and strategy.
HR will have to grapple with remote working and greater flexibility
The digitization of business is one of the largest driving factors behind the increase of remote working. Managing an increasingly flexible workforce will be the new norm. HR will adopt new technologies to analyze work production and work time, as well as new strategies to ensure ease of communication, as well as organizational cohesion and collaboration.
HR’s decade?
Such dramatic developments seem to suggest the 2020s signify HR’s decade. As more and more organizations come to realize a business’ success is built on its people and HR’s strategic relevance continues to grow, so too will its influence. With analytics, technological and workplace culture advances, and an increase in specialist HR roles, HR will potentially transform as a function; while its core will remain unchanged, by 2030 it will perhaps be unrecognizable.