Years ago, the human resources department—often referred to as “personnel”— was primarily charged with keeping records, ensuring companies followed regulations and were in compliance with laws, and determining wages, compensation packages, and other benefits.
Over the years, HR has evolved tremendously. In fact, the HR department has gone through drastic changes in the last 10 years alone.
Thanks to the emergence of a slew of technologies that automate much of the work traditionally done by HR professionals, the HR department that exists today looks almost nothing like the ones that came before.
In addition to programs that can automate payroll and streamline the onboarding process, there are also platforms that simplify the recruiting process and talent management systems that enable companies to quickly determine whether their employees are getting the right training opportunities, among other things.
The biggest change has been the context in which HR works. Instead of focusing on personnel management and administrative tasks, today’s HR departments—at least the ones that are forward-thinking—spend their energies managing employee engagement and strengthening culture. They’re also charged with managing the employees themselves to increase the odds employees are happy and see the value in continuing with the company for the foreseeable future.
Also, companies increasingly see the value and importance of supporting diversity. In the past, an organization would create HR policies that applied to the whole organization. Today’s HR approach needs differentiation because parts of the organization exist to deliver different outcomes.
Another relatively new challenge is working out how to attract and retain the best talent across generations, genders and other diversity groups.
Ten years ago, companies surveyed by the SHRM Foundation said their top future challenges were succession planning and providing leaders with the skills needed to be successful. Today, employers say the increasing competition for skilled workers is a top concern. As a result, the workplace is much more employee-focused and individualized. That’s pushing employers to, among other things, provide flexible schedules to people with family obligations or give tuition help to entry-level workers so that they can get a new job — somewhere else.
The trend toward an employee-tailored workplace is likely to continue, and you may need to adjust quickly if you haven’t already started. “We’re going to now see this shift to employee value, and this is critical. It’s the deficit we see today in HR,” says Rusty Lindquist, vice president of human capital management strategy and intellectual property at HR software company BambooHR, which is based near Salt Lake City. HR’s traditional emphasis on payroll, benefits and procedures will need to broaden. “The HR of the next decade has to be more focused on performance and productivity. And that’s going to require a seismic shift in thinking.”
So, what has changed over the past decade, and how will those trends evolve in the years to come?
According to the Society for Human Resource Management (SHRM) there are six significant trends to watch in the 2020’s:
- Extensive Use of Social Media: Ten years ago, social media was fairly new and a little unsettling for business leaders and HR. Twitter was just 1 year old, and Facebook was thought of mainly as a distraction that threatened to decrease productivity. Two-thirds of employers used technology to block connections to banned websites in 2006, 3 out of 4 monitored which websites workers visited and more than half monitored employees’ e-mails, according to a BambooHR study of HR trends.
Today there is a more relaxed attitude to the extent that only a minority of organizations block access to certain sites and even fewer monitor what workers were viewing and e-mailing, according to BambooHR.
Of course, company leaders fully understand that social media can be distracting—and will continue to be for as long as there are cute cat videos to share—but they also realize that trying to control employees’ online lives at work is likely futile and perhaps even counterproductive. Social media is how people are used to finding information and communicating, and if it is limited, employees will feel stifled.
In the next decade, companies may well abandon e-mail and use social media or other instant messaging tools as their primary internal communication vehicle, predicts Shawn Casemore, president of Ontario, Canada-based management consulting firm Casemore and Co. Inc.
- Flexible and Individualized Benefits: In the past, HR Departments selected benefits for the organization and offered little if any choice. Today, employees still feel that health and retirement programs are important, but want a voice in tailoring those benefits to their needs and preferences. Companies have responded by offering more choice in these benefits but also by expanding their benefits to include, for example, tuition benefits and onsite schooling, including vocational training that is likely to have employees leave the company such as nursing or aircraft mechanics. Student debt help is another emerging perk with forward-looking employers.More companies are embracing a benefits model similar to the approach behind consumer-driven health plans: Employees are allocated a set amount that they can spend on the perks that best meet their needs.
- Flexible Feedback Models: The days when annual or semi-annual performance reviews were the only formal feedback an employee received are fading fast, along with strategies that had workers compete against one another such as GE’s “cut the bottom 20%” or Microsoft’s stacked rankings. After Microsoft moved away from stacked ranking in 2013, managers began using a process called Connects, in which workers get real-time feedback without structured reviews. Instead of numbered rankings, it’s about the employees’ impact over the last two to three months, their anticipated future impact, what they learned from various experiences and how they grew professionally. Instead of encouraging competition among colleagues, this system fosters collaboration. Employees are assessed on how they worked with their teams and contributed to others’ success.While experts believe that the move away from a once-a-year gathering of feedback is a step in the right direction, nailing down the best process for evaluating employees in a way that benefits both company and worker remains elusive.
- Remote Technologies: Ten years ago, while technologies that facilitate working remotely were emerging and gaining in use, employers were generally suspicious of remote work and companies that offered telework options were the exception rather than the rule. Today, a SHRM study showed that three times as many companies offered telework last year than did in 1996. That gives leeway to both workers and employers, who can vastly expand their pool of job candidates.Flexible work arrangements and schedules have also brought about a different way to evaluate work. Long hours and face time used to be mandatory at some companies. Now, it’s not so much about time served but rather about what gets done.The age-old problem with new technology, though, is that the human element often gets lost. In the next decade, it will be up to HR managers to instruct workers on how to communicate outside of e-mail and social media.
- Agile and Gig–Focused Career Development: In 2005, about 10 percent of U.S. workers were employed by a temporary help agency, as an independent contractor or in an on-call position, according to a study from Harvard University’s Lawrence Katz and Princeton University’s Alan Krueger.Today in the U.S., slightly more than 1 out of 4 workers were gig workers in 2016, according to the McKinsey Global Institute, and that number continues to grow as people seek more independence and opportunities. (By contrast, the decade before that showed little change in the percentage of workers in alternative work arrangements.) The growing Millennial workforce is more focused on racking up new experiences than on banking time at one organization (or even in one field for an entire career), and HR managers are adapting.“Years ago, the old paradigm was that the contract was defined around loyalty and tenure. There is a new social contract, or new business paradigm, in which employees, especially Millennials, are less incentivized by security and benefits and more eager to take on roles that offer new experiences and flexibility,” says Jan Bruce, co-founder and CEO of meQuilibrium. “Instead of buying your loyalty with tenure, we earn it by helping you be agile and purposeful. I can’t buy you for life, but if I give you a great skill and help you in your career, then you will be loyal to me while you are there.” That includes offering more opportunities to entrepreneurial independent contractors—contingent workers who work on a per-project basis and are not employees of any one company.
The gig economy—driven as much by the economic downturn of 2008-09 as by the influx of Millennials in the workforce—will present challenges in the next decade for HR, including whether and how to provide benefits to contractors and manage intellectual property rights when a person has several different employers, but ultimately, workers and companies will benefit from the trend. “
- Emergence of Analytics in HR: While the use of data analytics in HR is still a relatively new idea, there is growing recognition of the need for HR practitioners with expertise in data skills, the number of organizations actually leveraging workforce data is still relatively low. According to a report by Deloitte, less than 9 percent of respondents said their organizations had a strong team in place that could handle data analysis within HR. While analytics have gotten off to a sluggish start, the use of data to assess and improve everything from recruitment to health and safety to succession strategies will be the hottest and biggest game-changing trend in HR. In fact, nearly one-third of companies said they were ready to make the leap to using full, predictive analytics, according to the Deloitte study.
In light of these changes and the likelihood of changes we can’t now foresee, companies will need to recruit HR leaders, not HR managers. These leaders will need to be able to communicate clearly about innovations and departures from the traditional HR roles and to exhibit flexibility and creativity not heretofore required for the HR role, acting as a full partner to company leadership in predicting and fulfilling on a rapidly changing environment. Attracting and retaining this kind of HR talent can be a daunting process, particularly for companies that have not confronted the realities that we have outlined above. A relationship with a recruiting firm that understands and stands for the company’s purpose and its support of HR is likely to produce the best results. An effective recruiting partner will partner with the company to identify the right combination of skill and experience to find the top candidates and to convey to them what it is the hiring company stands for.
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