HR Across the Spectrum: Predictions for 2016

HR Outsourcing

Our experts anticipate big changes from tech to talent

By Russ Banham

2015 marked the return of talent and put human resources executives front and center as their companies’ chief growth catalysts across diverse industry verticals.

During the Great Recession, employees were a cost center to be swept partly away in the effort to “tidy the house.” This is no longer the case, and many organizations now strive to treat employees, job candidates, talent communities, and temporary workers with greater care and respect. “Up, up with people,” goes the refrain of an old tune reimagined for the decade ahead.

This renewed emphasis on the “human” part of human resources is evident in many companies’ talent recruitment, onboarding, and productive engagement of both salaried and non-salaried workers. It looms largest above all other predictions for where HR is headed in 2016 and colors the type of technology business managers want (and that providers make) to better understand what motivates and drives people. It’s also informing decisions relating to employee training, mobility and recognition, and broader employment branding efforts.

We reached out to a dozen deep thinkers across the HR landscape for their boldest predictions on the direction things are headed (HR-wise) through the remainder of this year. The interviewees span multiple spheres of influence—learning and development, mobility, technology, recognition, contingent workforce, and talent acquisition. Below are their projections for 2016.

Recognition

Derek Irvine, vice president of client strategy and expatriate consulting at Globoforce, and David Brennan, general manager at Achievers Corp., predict a revitalization of humanity in the workplace. As Irvine puts it, “The ideal workplace of the future will be one where culture and humanity coexist as business leaders’ foremost priorities.”

In 2016, more companies will continue to grasp that their success depends on employee job satisfaction, well-being, and happiness.

“Performance feedback is becoming critical for companies to ensure that they motivate and retain the best performers,” Brennan says. “Looking back over the last few years, it is apparent that more organizations are realizing that their annual performance reviews are outdated and broken; they simply don’t meet the needs of Millennial employees. You can’t tell someone 25 years old that she did something really great last March— you need to provide immediate feedback through recognition.”

Irvine agrees. “A great company culture starts with recognition programs, particularly values-based recognition,” he says. “When linked to a company’s core values, recognition helps create a more human work environment.”

Many employees want the work they do to be meaningful and their tasks to help the employer succeed. The problem is that managers often fail to recognize their efforts. “A culture that combines gratitude and humanity can be an organization’s most powerful tool in attracting and retaining talent,” says Irvine.

Brennan maintains that this gratitude can be expressed through gestures as simple as a pat on the back for a job well done.

“Too many businesses think the paycheck is the `thank you’—it isn’t,” he says. “Productive behavior needs to be reinforced by managers. Studies show that the biggest determination of an employee’s retention is his or her manager. Tools that help managers recognize and reward employees and share this recognition with their colleagues reinforce positive workforce behaviors. This will become a competitive differentiator in 2016 and beyond.”

Irvine concurs: “The companies that put employees first, appreciate them as their greatest assets, and foster humanity for them to achieve fulfillment in their jobs will reap the benefits in the future.”

Mobility

George Bates, senior vice president of global marketing and sales at Graebel Relocation Services Worldwide, predicts that more companies in 2016 will seek to “localize” their employees on long-term overseas assignments, for both cost- and worker-satisfaction-related reasons.

A couple of decades back, most businesses simply sent an executive and his or her family on an expatriate assignment to Asia-Pacic and gave them all of the same benefits the employee enjoyed domestically. “Companies increasingly are seeing and seizing greater cost efciencies by making the person a local employee,” Bates says. “This is the biggest trend in employee mobility, with some carryover from 2015. Research into our client base indicates that 64 percent of companies are doing this now to control their costs.”

For some companies, the tax savings from localizing the worker can be as much as 25 percent, depending on the region.

“The legalities vary on a country-by-country basis, and it is important not to play too close to the risks and compliance issues,” Bates says. “Nevertheless, this is a big movement; eight percent of companies localize people who are already on assignment, particularly those employees and their families who really want to stay in that country.”

The good news for these employees is that the same benefits and compensation they received in the U.S. will be provided on foreign assignment.

A related trend is the revival of GECs (Global Employment Companies) to further simplify the relocation process. With increasing globalization, many businesses are sending employees on long-term assignments to multiple countries and moving them every two or three years.

“By forming a GEC with the headquarters located somewhere like Ireland, employees work for the GEC and receive the same package of compensation and benefits wherever they go in the world,” Bates says. “This provides real parity for all the global assignees, and the company can avoid the taxation issues that vary from the origin country.”

Learning and Development

Dave Letts, vice president of Raytheon Professional Services, and Edward Trolley, senior vice president, consulting and advisory services, at NIIT (USA), Inc., provided their views on the big movements taking place in employee learning and development (L&D). Both interviewees perceive a sharper focus on training, especially as many companies hire fewer people for their resumes and specific skill sets and more people for their cultural fit.

In this quest, Letts says that big data will play a larger role going forward to help business leaders map learning data to organizational performance.

“Nearly half of all learning organizations are using both HR and business data in their analytics, but most of these organizations don’t know how to harness data to show the impact of learning on business results,” Letts says. “When used effectively, data analytics can improve learning effectiveness, increase employee engagement and retention, and demonstrate impact on revenue.”

The challenge in many companies is the continuing need to reduce costs, which often takes an ax to training programs. In this environment, Trolley predicts that more businesses will turn to L&D outsourcing.

“This is particularly true in Europe, where many companies are facing a challenging economy,” he says. “They’re looking more closely at how outsourcing can help them reduce training costs.”

With cost pressures rising, training organizations will be under more pressure to deliver measurable value in the coming year, the experts say. “It is no longer acceptable for training organizations to operate without being held accountable to the same expectations of a return on investment as any other part of the company,” Trolley asserts. “As they respond to the mandate of dramatically improving effectiveness and efficiency, many transformations will take place within training organizations over the next 12 months.”

The bottom line: Companies will put more effort into improving and measuring the value of employee training and development. Says Letts: “Learning analytics will no longer be a `nice-to-have,’ but rather an expected part of the learning and HR functions.”

Contingent Workforce

Jill Goldstein, global offering lead, talent and HR operations at Accenture, cites the continual reshaping of the global workforce as her major projection for 2016. As more companies seek ways to grow the business over the long-term, they will nd a greater need for technological skill sets. The challenge is hiring these specialized individuals; most prefer to work on an independent, third-party basis. Her forecast: organizations will augment the workforce with an ever-increasing percentage of highly skilled, non-salaried employees.

“The economy has been so unpredictable over the last five years that companies are unsure how to grow the business and compelled to rely more on temporary workers as part of their larger talent pools,” says Goldstein. “Such individuals are not being hired to perform predictable, administrative tasks, however.”

Rather, these temporary workers have skills in digital technology, data analytics, articial intelligence, telematics and the Internet of Things—the many new technologies that are driving competitive differentiation and success in nearly all industries.

“Since people with these skills want to remain independent contractors, the temporary workforce is changing,” Goldstein says. “The face of this workforce is now just as important as the people hired into the permanent workforce.”

Realizing this, companies are beginning to shift the responsibility of recruiting temporary workers from procurement to HR. “Organizations are thinking ‘how can we take our talent-based best practices and extend them into this broader pool that includes high-value temporary employees’,” Goldstein explains.

In this regard, she says her more progressive clients, are enhancing their onboarding processes to ensure a temporary worker has completed all safety certications and has the equipment he or she needs to effectively start work on day one. Other clients are giving the same careful attention to their off-boarding processes.

“It’s almost like they’re creating an alumni association by staying in touch with this pool of temporary employees in case they’re needed for another project ahead or interested in permanent employment,” Goldstein says.

There is a caveat to such preferred treatment. “Clients can’t treat temporary employees too much like permanent ones, otherwise they would be eligible for the terms and conditions of salaried staff,” she explains. “While clients should be sensitive to regulatory requirements, this should not be an obstacle to forming a robust extended talent pool.”

Talent Acquisition

Jeanne MacDonald, president of the talent solutions business at Korn Ferry Futurestep, echoes many of the above predictions on cultural alignment in recruitment. She suggests that this more humanistic approach to recruitment needs to be applied more to the care and attention given to current employees.

“Many multinational corporations have the technology tools to understand the talent they need and how to acquire these new people, but they haven’t spent enough on how to retain and motivate existing employees,” MacDonald says. “This is my big prediction for 2016: more emphasis on what to do with existing talent and new talent once they’re on board.”

Companies have assured a tighter cultural fit by investing in technology tools to locate and recruit candidates whose skills and behaviors align with the organization’s mission and value proposition. But they tend to drop the ball thereafter when it comes to ensuring their training, knowledge, and open access to forthcoming job positions and providing ongoing positive reinforcement of their performance.

“You’ve now got the skill sets and fit you want, but where this person is going in the organization?” says MacDonald. “You’ll need to put them in different positions and move them around globally to motivate and grow them over time. What now?”

She predicts that more companies will invest in the tools to ensure that once they have brought in someone with the right traits and competencies, these individuals are managed to inspire satisfying and productive careers.

Technology

Mike Ettling, president of SAP SuccessFactors (SAP’s HR in-the-cloud software business) predicts a new generation of intelligent HCM software that leverages machine learning will transform the entire process of HR service delivery. Instead of a series of isolated self-services, HR servicing will evolve into a fully end-to-end model of integrated processes crossing multiple software modules.

Today’s HR services are often one-and-done deals. Each task, such as a workforce change, concludes without being reflected in other areas such as learning or recognition.

“It’s like you drop a pebble in the water and it creates 10 ripples,” says Ettling. “Traditional HR systems process the first two or three ripples and the remaining seven are dealt with in the shared services center or through outsourcing. This no longer makes sense because this stuff can be anticipated by intelligent software.”

The software draws from machine learning: a subset of artificial intelligence. Leveraging the aforementioned scenario of a workforce change, an algorithm in the system informs HR staff what to do next.

Ettling provides another example: “Think of a recruiting manager who applies to go on a leave of absence for personal reasons,” he says. “Most HR systems approve the leave and then deduct the pay and adjust the benefits—then they stop. The fact that the recruiting manager has 20 open requisitions he’s working on isn’t addressed. That’s done manually at the shared services center. With machine learning, you know this ahead of time and can instantly serve up the requisitions to another manager.”

This will be “extremely transformative,” Ettling predicts. “Once machine learning rolls out more fully, it will eliminate the need for shared services and blow up the BPO industry in an HR context.”

We thought we’d end with the boldest prediction of all. Until next year…

Russ Banham is a Pulitzer-nominated business journalist and author of 24 corporate histories, including his most recent book, “Higher: 100 years of Boeing.”

Posted January 22, 2016 in Talent Acquisition

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