Change is coming. At least, that’s the view of HR leaders, who expect their role to evolve in the next five years with a growing emphasis on strategy. Such a shift could radically escalate the function’s importance and redefine HR’s relationship with the C-Suite. According to a recent PwC report, only a third of CEOs feel HR is prepared for the business challenges of tomorrow. Yet over 60% of the world’s CEOs are concerned about the battle for talent with the right skills – a 10% increase from just two years ago.
Our own recent research highlighted the changes in store, and the key role technology will play in driving them. The research found that 70% of HR leaders expect their role to evolve in the coming years to increasingly focus on HR strategy rather than administrative tasks. This change will be vital for the function to prove its worth in tomorrow’s business landscape, as many firms still focusing on ‘Business As Usual’ activity. HR could finally grow from being simply an underappreciated process function to a catalyst for innovation and better business performance.
Social technology and the rise of Gen Y
The research also found HR leaders recognise the potential of ‘social technology’. Almost half of respondents agreed that it will help improve employee engagement in the next five years. Social technology has huge potential in the collation and validation of employee information. It can also deliver social recognition and a reward system that will improve employee engagement. The uptake of social technology will be driven by generational shifts and advances in consumer technology. This in turn will give employees a stronger voice and trigger a change in their expectations regarding technology at work.
Millennials will comprise up to 50% of the workforce by 2020 according to PwC research, with the digitally-native Gen Z hot on their heels. The war for talent is far from over: business confidence is growing, skills shortages loom and the ‘job for life’ has become a thing of the past. This new cohort of middle managers and prospective leaders will demand rapid feedback, expect more transparency and boast an unprecedented level of willingness to use new social technologies in the workplace. Organisations whose HR teams can meet these needs and improve engagement through technology will lead the way.
Mobile and cloud: game-changers for HR
Accommodating remote and on-the-go workers remains a challenge for HR. It is therefore unsurprising that around half of HR leaders now expect mobile to have a positive influence on HR strategy in the next five years. Mobile will enable HR to increase efficiency and empower employees. Its ability to improve upkeep and access to employee data will foster a more mobile workforce.
A majority also view cloud technology as a favourable addition for the future. HR leaders expect it to bring improvements relating to data storage, management and availability for staff. The adoption of this technology is still in the early stages. A key challenge here will be overcoming the early security fears some have had for the platform, which are now outdated – though understandable when any technology is still in its nascence. It should also be noted that some still see this as a development only of relevance to IT, introducing an inevitable discussion that must occur in any organisation adopting cloud technologies. IT will always have a say, but it will be up to HR leaders to identify the benefits of cloud and put the right solutions forward for consideration.
Big data, big potential
Big data still divides opinion. Many are still unsure what it really entails and the benefits it can bring. A steep learning curve is around the corner for HR professionals, as the adoption of talent analytics will be key to reshaping their relationship with the C-Suite.
Working alongside social, mobile and cloud technology, HR will be in a position to drive the shift towards more accurate, accountable and actionable performance insights that have a bottom line impact. This will align the HR function more closely with the C-Suite in the process. Recent research by Bersin suggested that only 4% of large organisations have achieved the ability to perform predictive analytics regarding their workforce. This would involve understanding the “drivers of performance and retention, using statistics to decide who to hire, and analysing how pay correlates to performance”. What businesses need now is a catalyst for that change and an example to follow – who will provide HR with its ‘Moneyball’ moment?
The HR strategies of the future will be more metrics-led, but still rooted in the challenge of empowering people performance and retaining talent. These metrics will be more readily correlated with bottom line performance and the measurements used by the rest of the C-Suite. HR leaders will need to bargain for better technologies and more resource to support improved strategic planning and delivery. If they do this, a seat at the table is there for the taking.
Ultimately, technology will be an enabler for HR – it’s how it is used that counts. Social, mobile and cloud have the potential to enable HR to become more strategic, but there is still a steep learning curve. HR leaders will need to be numerate and analytical while having an appreciation for the human impact that data-based insights will bring. For those who strike the right balance, the rewards will be worth their weight in gold.
Lawrence Knowles, Vice Chairman of Technology, MidlandHR