HR experts share six trends that will shape the industry in the coming year.
By Marta Chmielowicz
The past year in HR has been marked by developments in smart technologies, key shifts in workplace management practices, and the rise of alternative forms of work. With artificial intelligence (AI), automation, social media, and a new world of data and analytics at their fingertips, HR professionals have transformed the industry into a more agile and strategic business function. According to DDI’s 2018 Global Leadership Forecast, 71 percent of HR professionals report that their reputation with the senior team as a trusted advisor has improved in the past three years.
Organizations are already modernizing their approach to HR with increased focus on flexibility, personalization, and transparency—and 2019 will see this evolution go even further. The new year will bring an era of refinement as companies fully embrace emerging technologies and innovative approaches in the face of global talent shortages and candidate-driven job markets.
Here are six trends that will shape the HR function in 2019.
1. Engaging employees with a personalized HR experience. Today’s consumers are living in an age of choice, flexibility, and control. From on-demand streaming on Netflix to product recommendations on Amazon, much of the business landscape is molded to personal preferences, interests, and needs. In fact, according to Deloitte’s Consumer Product Trends report, personalization is a key consumer trend going into 2020.
But as consumers become accustomed to individualization, they bring those expectations to the workplace—and HR professionals will need to adapt. “I think the largest challenge will be bringing individual-based strategies from a retention, development, growth, and talent attraction perspective as opposed to what we’ve traditionally done as HR leaders, where we’ve looked across categories and groups,” explains Nikki Harland, senior vice president of HR at Paradies Lagardère. “We have to be more individually-focused and meet the needs of specific people to keep the talent level thriving within the organization. Day to day, keeping individuals engaged is a person-by-person discussion.”
Another key consideration in customization is where each employee is in their career cycle. “[HR professionals should] offer more career pathing resources: assist employees in viewing how they currently fit into the organization and the value that they provide, as well as the opportunities that lie ahead,” says Piper Jaffray’s Managing Director and Chief Human Capital Officer Christine Esckilsen. By providing individualized coaching about career progression and opportunities, organizations will appeal to all generations.
Feedback and rewards programs will also be increasingly focused on personal preferences. According to Maria Smedley, vice president of HR and strategy at Arkansas Electric Cooperative Corporation, “There will be a shift in how talent is evaluated because it will no longer prove effective to evaluate the talent of Gen Z and millennials the same way that talent has historically been evaluated for Gen X and Baby Boomers. Different attributes will be highlighted in the talent management process, and more frequent feedback will be required and more real time rewards will be implemented.”
2. Empowering employees through technology that mirrors a consumer-like experience. The digital revolution is changing how people engage with others and go about their daily lives, and HR is not immune to the transformation. In today’s candidate-driven market, employees and job seekers increasingly expect a convenient, intuitive, seamless, and tech-enabled experience that reflects the capabilities of today’s digital tools. And HR teams are meeting the demand; Deloitte reports that 56 percent of businesses are in the process of redesigning their HR programs to leverage digital and mobile tools.
According to Harland, “In all segments of HR, everything has to be on-demand and it has to be simple. Technologies that are complicated and filled with multiple gates and approvals will just begin to fall to the side. More on-demand, mobile-friendly technologies that affect work life the same way that they affect personal life are important. If I can order groceries and have them delivered to my house in 30 minutes, then I certainly should be able to check my payroll information and understand my pay statement or my development plan or be able to engage with my mentor or take my training with that same convenience.”
To enable the transformation to a more digital and user-friendly HR service delivery method, HR platforms that replicate the personalized interfaces of social media apps will become the new normal. Cloud-based HCM solutions that combine various HR systems into a single platform and feature customizable modules that support the entire lifecycle will also become more prevalent.
And the use of these technologies will have a profound impact on the way HR is done across the business. According to David Mallon, chief analyst at Bersin by Deloitte, people processes and activities will become embedded in employees’ daily flow of work. For example, mobile micro-learning apps will allow training to be easily conducted outside of the classroom, and built-in feedback tools will make performance management a part of employees’ daily routine rather than an activity that occurs at discrete times of year.
These technological developments are especially important at a time when teams are becoming increasingly mobile and geographically dispersed. Collaboration platforms; new communication tools with messaging, chat, and video capabilities; and easy-to-use, self-service HR software will be the new standard.
3. Redesigning talent acquisition to get ahead in today’s market. As HR continues to evolve to a critical driver of business results, the function will need to become more agile—flexible, responsive, and integrated throughout the business. This is especially true in the talent acquisition function where HR professionals will have to contend with a growing population of temporary, contingent, and freelance workers. According to Upwork’s 2018 Freelancing in America study, the contingent workforce in the U.S. now makes up 35 percent of the working population and will be approximately half of all workers by 2020.
Given these statistics and the talent shortages facing businesses today, companies will have to adapt their recruitment process to nurture an ever-growing network of high-quality and diverse talent. “HR will be challenged to think outside of HR norms and stretch beyond comfort zones to develop and execute HR strategies that will support the goals and objectives of their companies,” says Smedley. “Recruiting areas will expand beyond traditional recruiting parameters which will increase relocation budgets, sign-on bonuses, and retention agreements. Companies will work harder to retain key talent through counter-offers, more flexible work arrangements, increases in the concept of job sharing, reassessing job requirements that may be excessive for what is really needed or for what is available, and job redesign to leverage the talent that is available.”
Many organizations will turn to a total workforce solution—a holistic talent acquisition strategy that encompasses all types of workers and leverages technology to achieve integration and transparency. In fact, Gartner predicts that the number of organizations investing in a total talent approach will rise to 60 percent by 2020. HR professionals will approach talent acquisition proactively, forecasting company needs and seeking the necessary talent across diverse geographies, roles, and job arrangements.
4. Analyzing data to better manage people and processes. One of this era’s major innovations in HR is the arrival of intelligent analytical tools and digital dashboards that allow companies to bring data from across the enterprise to life. HR analytics have come a long way since cumbersome spreadsheets; professionals can now manipulate, interact with, and visualize patterns in cross-functional data to reveal surprising insights and trends that were not apparent before.
“As part of its position as a strategic business partner, HR will need to continue to use data, statistical measures, and analytics to add value to the business line,” says Esckilsen. “When HR couples the use of data and analytics with the information it gathers from relationships and reliance on emotional intelligence, it will be even better equipped to help manage the company’s primary assets (its people), predict, and manage change.”
The use of data and analytics is set to grow far beyond the current capabilities, with an emphasis on leveraging technologies like automation, robotics, and AI to make predictions and better data-driven decisions. Investment in these technologies has already increased significantly in the past year, with Deloitte’s 2018 Global Human Capital Trends report showing that 47 percent of organizations are involved in automation projects and 42 percent believe that AI will be widely deployed in their organizations within three to five years—up from 38 percent in 2017.
With Deloitte reporting that 70 percent of HR professionals are working to integrate data into their decision-making process, it is no surprise that technologies which automatically harvest people data from social media (17 percent), surveys (76 percent), and integrated HR and financial systems (87 percent) are on the rise. In fact, today’s advanced analytics technologies can even gather and analyze sentiment data from voice communications, email, and video interviews.
This data can then be used in conjunction with employee feedback and performance metrics to identify management challenges, develop coaching tips, and reveal employee stress points. According to Deloitte, 69 percent of organizations are working to build integrated systems that allow them to better analyze these numbers in useful ways, and 17 percent already have real-time dashboards to glean insights.
“The pace of change in HR technology is accelerating beyond anything seen in recent years,” says Bersin’s Mallon. “Various talent management applications, many of them incorporating artificial intelligence, are being wrapped into core HR systems. In particular, organizations are looking for technology that will help them track and automate the ‘moments that matter’ in the employee experience. AI, organizational network analysis, and feedback systems are all working internally to provide organizations with more information on what their workforce does and how they can do it more productively.”
But with the heightened rewards of data come heightened risks. In particular, the advent of Europe’s General Data Protection Regulation (GDPR) has shined a spotlight on issues of data security and data privacy which will continue to be key considerations for HR professionals in 2019.
5. Communicating values and inclusivity while acting with purpose to support employees. In today’s turbulent social and political climate, employees are more conscious of their impact on the world than ever before. And this will continue to extend to the workplace—millennials in particular are more likely to support and work for businesses that reflect their values. According to Cone Communications’ 2016 Employee Engagement Study, 79 percent of millennials and 58 percent of all U.S. employees consider a company’s social and environmental commitments when deciding where to work.
Harland says this growing trend is the result of an increasingly blurred line between personal and professional lives. “It’s very hard now to separate what you are seeing on television, reading on your social media feed, and living every day in your life from your work life. So, organizations have to have their antennas up about what is happening in the world around them. Companies have to have a point of view that they stand behind, and be able to make that shift as the world continues to shift. When you look at organizations where folks want to thrive and grow, you see that they want some type of mirror or resemblance of ideals that are important to them. This idea of a split between work and life where you live two different ways personally and professionally is one that is quickly being erased.”
According to Mallon, this trend has also been underpinned by three major societal developments:
- a decline in government trust which places the responsibility of social change on businesses;
- the rise of social media activism among millennials and Generation Z; and
- the growing importance of organizations’ social impact in addition to financial performance during stakeholder evaluations.
“The traditional business enterprise has to engage with the ecosystem around it to become a truly social enterprise. To manage this intersection of performance and purpose, organizations—led by HR—need to leverage the workforce as a force for change,” he says.
Companies will need to effectively communicate their values and mission in order to remain competitive. “Outside macro movements like #MeToo and Black Lives Matter will continue to impact the workforce,” says Piper Jaffray’s Esckilsen. “As the majority moves to the minority, clients will also be demanding change in exchange for their business.”
6. Leveraging brand with intention to create a competitive advantage. In the coming months, companies will need to communicate their culture and values in ways that feel authentic in order to attract today’s multi-generational workforce. Harland believes that the first step will be engaging and connecting with candidates where they thrive. With 69 percent of the U.S. public using some type of social media platform and 74 percent of online Americans using Facebook daily, according to the Pew Research Center, branding and social media outreach are key.
“Employer brand is very significant right now—identifying what is the brand, what is the story, and what you are that others are not. It is a large part of how you’re going to break through and break into these communities because it has to be genuine and has to be authentic. Any lack of authenticity will be visible to the world in seconds,” she explains.
While social media marketing is commonplace today, companies in 2019 will become more intentional in the way they present their brand and differentiate themselves from their competition online. Rather than simply monitoring their web presence, Esckilsen says that businesses will leverage analytics to compare and contrast their opportunities and culture to others in the marketplace. This knowledge will help them become more competitive and build long-term loyalty.
“Millennials and Gen Z are raised in a more mobile work environment. With increasingly unique benefit offerings from competitors and start-ups, companies need to determine how they will differentiate their employee experience. Then they need to persuasively communicate their differentiation,” she explains.