What Is the Future of HR?

HR leaders generally feel their ideal role is one of broad leadership, but it is often far less than that.

Robert Browning’s poem “Andrea del Sarto” describes the 16th-century painter’s love for his wife but laments that del Sarto is limited by the mundane duties of earning money and supporting her, while his more famous (and unmarried) contemporaries Leonardo da Vinci, Michelangelo and Raphael live for their work with greater passion and spirit.

Despite being published in 1855, the Victorian Age poet’s work is relevant to the challenges facing human resources leaders today. The demands of day-to-day HR may be crowding out the focus, passion and spirit that are necessary if practitioners are to take a leading role in helping organizations capitalize on opportunities offered by emerging trends such as big data and gamification. This could hinder an organization’s quest to maximize productivity and be competitive.

Is the HR profession moving fast enough to capture the opportunities in emerging trends? Much of the work addressing this issue has defined the future of HR in terms of competencies, workforce demographics, or professional techniques or practices.

Here we take a different departure point by starting with prominent emerging general trends and examining their potential effect on HR, now and in the future, and HR’s desired and actual role in addressing them. What we found was that while HR leaders generally feel their ideal role is one of broad leadership, their assessment of the current role often is far less than that.

Our research at the Center for Effective Organizations was conducted with a consortium of 11 large companies: Citrix Systems Inc.; Electronic Arts Inc.; Gap Inc.; Lockheed Martin Corp.; Mattel Inc.; Rockwell Automation; Royal Bank of Canada; Sony Pictures Entertainment;Unilever; UPS Inc.; and The Walt Disney Co. Twenty to 30 HR professionals within each company participated in the consortium. We examined the trends of globalization, generational diversity, sustainability, social media, personal technology, mass customization, open innovation, big data and gamification.

Beyond Tradition: Reach Out, Venture Out, Seek Out, Break Out

Findings suggest that human resources can make great progress by simply allocating more time, budget and expertise to the emerging trends that have the greatest potential effect on organizations. However, at a larger level, lasting change will require fundamentally rethinking how the HR profession and the HR function operate.

This includes:

Reaching out: By infusing talent from other disciplines such as marketing, finance, logistics and engineering, and bringing those disciplines to bear on HR issues such as the employment value proposition, options-based leadership development, optimized talent supply chains and risk-optimized performance management.

Venturing out: By exerting influence beyond the traditional role of functional specialist, through direct interactions with constituents such as government, regulators, investors and global collective movements.

Seeking out: By finding and skillfully surfacing unpopular or unstated facts or assumptions that can be debilitating if not addressed. Such hidden assumptions are often first visible among employees, and HR is in a position to “sense” them early.

Breaking out: By leading transformational change. Increasingly, change will be a constant, not a periodic, challenge. HR is uniquely positioned to be the repository of principles and skills for creating change-savvy and agile organizations.

—John Boudreau, Ian Ziskin and Carrie Gibson

Surveys were conducted with the consortium participants on all nine trends, asking them to rate HR’s role now, what HR’s role should be, and to discuss the barriers they were encountering to having a role in these trends. Each survey was followed by a webinar discussion of the findings. The analysis will pull from research gathered within this consortium, which has created communities with HR leaders in several organizations on these issues and established a network of HR professionals spanning multiple organizations.

The four trends in Figure 1 (below) have arrived, meaning HR is participating in them, though often not at the extent HR leaders think they should. The five trends on the right are emerging on the horizon, meaning HR has not yet established a role in these but is reaching into them.

The HR leaders see HR ideally playing a leadership role, even in trends where HR is only occasionally involved, if at all. The work that HR must pursue is significant.

There is a very important role for HR to play in each of these trends. However, it is not always the role that HR plays today. The five trends on the right in Figure 1 sound very technological and may seem on the surface a strange place for HR to engage, but in the rush to become technologically savvy, organizations may have missed the human implications in these trends. This human element is where the real potential for HR exists. These human implications and what HR can do with them stood out in our research. Next we will focus on four of the nine trends: big data, generational diversity, mass customization and sustainability.

Big Data

A large financial services firm traditionally recruited sales people only from the highest grade-earners at top-tier universities. Using “big data” it correlated employee characteristics with unit revenue, and found that grades and school quality were least predictive of unit revenue, with six other variables emerging as more predictive. The company shifted recruitment away from grades and school quality and toward the six more-predictive factors and saw an improvement of $4 million in revenue in the next fiscal period.

While it is terrific to learn how to recruit better, there are two issues on the horizon for HR regarding big data. The first is storytelling as a way to engage people. With no story behind the data, analytics or correctness seldom drive change in an organization.

Should HR know how to tell the story behind data? There are not many business disciplines other than HR that are as appropriate a home for that expertise. The HR profession includes disciplines such as psychology, anthropology and communication. Yet, if HR practitioners fail to develop these disciplines into a practical and scalable ability to tell stories with data, the opportunity may be taken up by other areas of organizations, such as marketing.

Then there is the “art” of the question. Big data is much more about questions than it is about answers. HR has a unique opportunity to lead the organization in asking good questions by developing the art of the question in the way they approach data and encourage others to approach data.

This idea of asking good questions is fundamental to leading through influence, which is again something HR traditionally does well. HR often has “permission” to ask hard questions or to probe beneath long-held assumptions, because the job of forging strategies for talent often requires much deeper understanding of strategy, execution and assumptions.

HR could accelerate this role by developing more systematic and common approaches to questions that connect strategy with talent, such as “where would improving our talent make the biggest difference to our strategic success?”

Generational Diversity

HR already has a fairly strong role within generational diversity. However, there is a large gap between where HR is and where it thinks it should be. The preparation for the multigenerational workforce lags well behind the reality.

Those polled have agreed that organizations will be hurt when the older generation leaves and takes knowledge with it. To counter this, many organizations now have reverse mentoring programs where the younger generation is mentoring the older generation to help with technology skills and to transfer knowledge.

While HR is active in these aspects of generational diversity, coming down the road is the question, “Are organizations willing to make the social investment to make diversity come alive?” Research shows that more-diverse groups face greater challenges and may not perform to potential unless provided more time and collaboration tools.

Diversity can be useful, but it also can be hard to manage. Investment in skills, collaboration and understanding differences is necessary for diversity to pay off. HR should take the lead in engaging business leaders in the story of the benefits of diversity in order to get the resources necessary to make it work.

Lofty ambitions but less elevated reality

Mass Customization

There is a lot going on already within HR concerning mass customization, the optimal combination of mass production with customization. We’ve seen companies basing employment arrangements on learning styles and personalities, allowing employees to choose between lower base pay and higher bonuses vs. higher base pay and lower bonuses, and changing from career ladders with a straight shot to the top to career lattices where a sideways move is considered a good career move. Here, HR has done a great job of applying HR principles to its own traditional functional processes.

HR will need to take the tools of marketing around customization for consumers and clients and applying them to the task of talent segmentation. The key is to optimize. At one extreme, a personal employment deal for every individual would be chaotic. At the other extreme, defining fairness as “same for everyone” risks missing important benefits of customization, and in fact may be unproductive and unfair.

Thus, HR should develop principles for understanding the optimal level of customization in the employment relationship. Moreover, because customization will often mean that different groups of employees receive different employment arrangements based on their needs or the way they contribute, HR must develop principles that equip leaders to explain these differences to employees. Our work suggests that while many leaders understand the need for customization and differentiation in principle, they resist it because they simply don’t feel well-equipped to explain them. It is far easier to say, “We do the same thing for everyone, so it’s out of my hands.” The concept of fairness is sometimes confused with treating everyone the same.

Sustainability

Sustainability is a trend that has arrived (HR has a strong role already as shown in Figure 1) but there is room for HR to become more involved and even lead. One sustainability issue on the horizon for HR is fatigue. In this technologically created 24/7 work environment, HR is uniquely equipped to offer principles that define an optimal balance between work demands and “slack” in the system that allows innovation and flexibility.

What is the optimum amount of rest/work? The fight or flight response that employees engage in for most of the workday has immense physical effects on the brain and has negative effects on the way people lead, on their ability to make decisions and their ability to create. HR can optimize the notion of wellness against the notion of work in a way that is more precise.

One way to optimize wellness at work is mindfulness. Mindful meditation — taking two minutes to breathe and focus — has immense effects on stress-related biometrics and diseases and has been reported to make leaders feel more focused, less reactive and open to new ideas. HR should take the lead in better understanding how these potential benefits affect organizations, and how they fit into an optimum balance.

Barriers and Opportunities to Close the Gap

What are the barriers to closing the gap between where HR is and where it thinks it should be regarding these nine trends? Based on the data, it is not because HR is seen as irrelevant or other functions have already taken the lead. HR relevance was among the lowest-cited barriers. The prominent barriers were more traditional: lack of time, budget and expertise.

Recall the story of del Sarto. Browning wrote of the painter: “Ah, but a man’s reach should exceed his grasp/Or what’s a heaven for?”

Is HR at the risk of spending so much of its resources on the day-to-day that it misses the big opportunities? To paraphrase Browning, does HR’s reach exceed its grasp? Of course, conquering such shortcomings is just the beginning.

John Boudreau, Ian Ziskin and Carrie Gibson are researchers for the Center for Effective Organizations at the University of Southern California.

This article appeared on workforce.com.

The HR Department of 2020: 6 Bold Predictions

The human resources department is doomed.

There is no viable future for the HR function, and HR professionals will inevitably be replaced by software. At least that’s what some are saying.

They’re wrong.

Without a doubt, software is changing how HR functions. But rather than spell the end of the human resources function, the nine experts I interviewed predict these changes will provide growth opportunities for HR professionals. This article lays out what will change and why, as well as how HR professionals can prepare.

Prediction 1: In-house HR will downsize and outsourcing will increase.

This prediction may seem somewhat, well, predictable. But the reasons our experts give for the change might surprise you.

Industry analyst Brian Sommer, the founder of TechVentive, claims a shift to smaller HR departments will be caused by new technologies and increased employee participation in HR processes. As he claims, “Many businesses are going to get a lot of capability done by better technology, more self-service and the employee doing a lot on their own.” For instance, employees will increasingly input their own data into self-service systems.

In addition, many transaction-heavy HR jobs will be outsourced entirely to HR agencies or specialists. Dr. Janice Presser, CEO of The Gabriel Institute, goes so far as to say, “Entry-level HR jobs, as they currently exist, will all but disappear as transactional tasks are consigned to outsourced services.”

Elizabeth Brashears, the director of Human Capital Consulting at TriNet HR, as well as Scot Marcotte, Barry Hall and Steve Coco of Buck Consultants, believe benefits administration will be particularly impacted as a result of increasing regulations and a globalized workforce. Brashears says, “As regulations surrounding employment, and particularly benefits, become more and more complex, I believe that companies will turn to field experts to help navigate through the landscape.”

Elaborating on this point, the experts at Buck Consultants say, “With employees taking on increasing responsibility for their benefits, we’ll see not only the administration of benefit programs but the entire benefits department become outsourced. Service firms will offer ‘benefit-in-a-box’ models that will offer cost-effective, bundled health and welfare, wellness and retirement plans to organizations.”

Nonetheless, the internal HR function will survive. As Chip Luman, the COO of HireVue, explains, “Given the ongoing regulatory environment, the need to pay, provide benefits, manage employee relations issues, and process information will go on.”

Prediction 2: Strategic thinking will become in-house HR’s new core competence.

The leaner version of HR that remains will need to reposition itself as a strategic partner within the business. In fact, the trend toward smaller, more strategy-focused HR departments was predicted 11 years ago in SHRM’s 2002 report, The Future of the HR Profession.

More recently, an Economist Intelligence Unit report stressed the need for C-suite executives to partner with HR to drive growth. In support of that, over half the experts I interviewed mentioned that HR needs to increase its strategic value to the business–or else. Dr. Presser says, “This includes the ability to make accurate projections based on understanding the goals of the business and using metrics that describe more than lagging indicators, such as how long it takes to fill a job or the per-employee training spend.”

This strategy role cannot be outsourced. As Dr. Presser says, “Strategic planning requires in-house expertise.”

In fact, Brashears predicts the trend toward a more strategic HR function may even drive the creation of new job titles. As she explains, “HR Professionals will likely transition into HR Business Professionals who not only understand HR implications but also business operations and strategy.”

Prediction 3: The pendulum will swing back to the specialist.

Janine Truitt, Chief Innovations Officer of Talent Think Innovations, observes a cyclical shift in the HR field. As she explains, “Every decade or so we fluctuate back and forth from the paradigm of the independent contributor/specialist to the generalist practitioner. We were in a ‘generalist’ mode and now I think the pendulum may be swinging back toward the specialist.”

Luman puts it more bluntly: “HR generalists as we know them will disappear.”

Brashears agrees, noting that “There will be more specialized roles. I believe this to be the case as the employment landscape becomes more complex with changing regulations around employment law and benefit compliance with the Affordable Care Act.”

Prediction 4: HR will increasingly utilize analytics and big data to augment its value to the firm.

In-house HR professionals will need to embrace analytics and “big data”–now often included in talent management software suites–to become strategic leaders in their companies. Gyutae Park, head of Human Resources at Money Crashers Personal Finance, predicts that:

In the coming decade, the career trajectory of HR professionals will be determined more so than ever by the analysis of data and metrics. Although HR already uses some metrics such as turnover ratios and employee engagement levels, you can expect to see new metrics tracked and used in HR, such as the average timeframe for staff to be ready for promotion, or percentage of top candidates to be hired within the organization.

New hires might be needed in the HR department to accommodate the increased use of analytics. As Dr. Presser explains, “The current trends in big data will provide new ways for HR to prove its value, so we can expect HR departments to want to add people who can analyze and make projections using these tools, and people who can drive positive change using the information derived from the analysis.”

Prediction 5: Managing a remote workforce will be the new norm.

Recent moves by companies like Yahoo and Best Buy to end their remote work programs are the exception, not the new normal. Without a doubt, HR will increasingly have to tackle the challenge of managing a remote workforce. Luman points out that companies will need “to leverage employees where and when they are most productive and impactful”–even if that means they’re halfway around the world.

But remote management isn’t a skill you can pick up on the fly. Dr. Presser cautions that, “The trend toward remote workers is a growing challenge to managers who are not effective in managing people at a distance.”

Automation and a different set of expectations will be part of the solution. Wim de Smet, CEO of Exaserv, predicts that “New technologies will be used to analyze the work production instead of the working time. Results will become more important and business will expect HR to be producing more result-driven performance analysis.”

Prediction 6: HR will need to become more like Marketing.

Sommer says that “recruiting is going to become more like marketing.” Specifically, he advocates that recruiters “identify specific micro-segments of either job seekers or job holders that you want to target to bring into your firm, just like a marketing firm would.”

The experts at Buck Consultants cast an even wider net. They claim the need for HR to think like marketers will expand beyond recruiting. “HR will evolve the ‘internal marketing’ role to include social marketing coordination and brand ownership, that is, outside talent ‘buying’ into the brand–the company–to potentially work in the organization,” they say.

Preparing for 2020

What can current HR professionals begin doing now to prepare for these predicted changes? The experts all endorse one tactic: keep learning. Risk-taking and networking will help, too.

“Get ahead of the curve,” advises Dr. Presser, “Realize that many of today’s ‘best practices’ evolved under very different business conditions, and may well become obsolete within this decade. Learn everything you can about your industry, your competitors, and pending legislation that affects your business operations. Most of all, define yourself as a businessperson and act accordingly.”

Truitt advises pursuing additional training or formal education. As she observes:

One difference that we will see clearly in the next decade is that people will not be able to merely fall into HR. Long ago, when HR was ‘Personnel,’ the profession was largely made up of individuals that happened upon the profession. With many colleges and universities offering HR coursework and degrees at the bachelor’s and master’s level…it seems that the future HR practitioner will likely have to be formally educated in this discipline to be gainfully employed in HR.

In particular, HR professionals should dig deep into one HR specialty. And, given their increasing importance, training should include data analysis and business strategy components.

Additionally, Lynda Zugec, Founder and Chairman of The Workforce Consultants, advocates welcoming failure as a learning tool. As she says, “In the changing HR landscape of today, failure is embraced because it means that you were brave enough to ‘give it a shot’ and also that you now have more information regarding what works and what doesn’t work than before. Eventually, if you keep exploring different avenues, you are bound to succeed.”

Finally, Luman encourages HR professionals to develop their own personal brand–to find their voice and be active. As he says, “Network inside and outside of your field. Blog, communicate, read and help others achieve success. If you are not outside of your comfort zone, you are stagnating.”

Erin Osterhaus focuses on the HR market, offering advice to industry professionals on the best recruiting, talent management, and leadership techniques, and joined Software Advice in 2012 after earning an M.A. in German and European Studies from Georgetown University.

This article appeared on new-times-talent.softwareadvice.com.

What does the future of human resource management look like?

With the dawn of the technology age, many critics claimed that human resource, as a function, would become obsolete.

It was said that HR had no viable future, and that all the jobs performed by HR professionals would be replaced by smart software. It is true that software is changing how human resources functions, but technology is said to propel hiring and recruitment in to the 21st century as it provides the industry with massive growth opportunities.

Current HR Trends

Technologies such as the cloud, social media, big data, and even gamification, is transforming how HR professionals work, let us see how:

Managing a “Workforce of One”
There’s a lot of noise going on about customization, the optimal combination of mass production and customization, and it’s said to change the very methods by which organisations manage their employees. HR departments of large corporations have already begun treating employees as a “workforce of one,” instead of a single entity.

The rise of the contracted workforce
After the rise and fall of outsourcing, organisations are now leveraging a new kind of workforce, the extended kind. This is workforce is an ecosystem of independent contractors, and outsourcing partners that offer businesses need-based HR functions. HR departments across the world are redefining the mandate of contractual employees, giving them more strategic value.

HR is driving today’s organisations
Unlike the “advisory” role played by HRs, many organisations are being spearheaded by the HR function. In a world of increasingly unpredictable trend sand outcomes, organisations that adapt to the changing landscape will emerge victorious. The HR function is currently reinventing itself to become that critical driver.

Tapping skills anytime, anywhere
Earlier, recruitment and HR was limited to telephone calls, or written material. But today’s HRs are engaging every means necessary to source the right kind of talent, both online and offline. With the internet at their finger-tips, HR can now source talent quickly, from multiple avenues.

Future Challenges to Human Resource Management

As with any other managerial function, HR also faces a slew of challenges before it can be future-ready:

HR needs to expand its reach
In order to Its deliver a seamless and productive employee experience,  HR first needs to evolve from its stand-alone function of administering traditional HR activities. It has to adapt into a function that cuts across boundaries and disciplines, to deliver a holistic employee experience.

Adapting to an ever-changing work profile
The future of HR is not in adapting its functions, but in adapting to the new worker profiles. Sweeping demographics across the world are already putting pressure on government and private institutions to initiate and execute permanent solutions that will educate, train, integrate and retain a diversified working population. And as the demographics change, so will their requirements and expectations. In most cases, HR will have to adapt to the newly evolving job roles & responsibilities, while also accounting for changes in benefits & incentives, as well as retention strategies for employees who are looking for more than money.

Navigating increasing risk in an increasingly complex world
As technology continues to seamless integrate the world by breaking down traditional information barriers, HRs functions will also involve the creation of risk management strategies that will protect not just the interests and data of the company, but that of the employee as well.

Managing global operations
No matter how small a business is, it’s operating on a global level at some point or the other, whether it’s for international orders or cross-border recruitment. And despite the existence if a global workforce in most companies, most organisations are only beginning to understand the management challenges and implications of such a situation.

Winning the war for talent
Intercity and cross-border migration adds a whole new dimension to HR complexities. HRs in one location can hire candidates from another, but it works both ways and can lead to brain drain. As organisations continue to grow and governments still scratching their heads on how to efficiently control labour flows, HRs continue to face shortage of skilled employees. Organisations and governments alike will have to seek, assimilate, and analyse data on how current and future migration patterns will affect the labour market.

Maurizio Prinzlau is the CEO of Cloudwards.net. This article appeared on blog.hrn.io.

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