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By: Dirk Jonker
When the legendary French electronic duo, Daft Punk, eloquently crafted the lyrics, ‘’Work it harder, make it better, do it faster, makes us stronger’’, they probably weren’t alluding to People Analytics tools or human resources.
Nevertheless, there was (and still is) a deeper meaning behind one of the most iconic dance hits of all time. “The pop-song. . . has a theme of unstoppable technological progress and productivity’’, according to Dig. Twenty years later, and much like the tune, our obsession over humanity’s love/hate relationship with technology still reverberates.
A prime reason for this is none other than the emergence of Artificial Intelligence (AI). It’s what makes, ‘’Harder, better, faster, stronger’’, feel more relevant today than when it was released.
So as we begin a new year — trading in our Spotify Wrapped playlists for resolutions and vision boards, while simultaneously looking ahead to the next wave of technological advancements — what are the driving forces that will propel HR forward? How can we measure the impact of these so-called “trends’’?
Keep reading for my predictions on what will make HR better, faster, and stronger in 2024 (without working harder). Each section, I’ll also suggest some 📈 data points to measure, so you can gauge whether or not you’re making progress in these areas.
The business landscape in 2024 is changing at an alarming rate.
A prime example of this: General Motors’ pivoting from traditional cars to electric vehicles. The move signified a commitment to sell only vehicles with zero emissions by 2035. It also put pressure on automakers around the world to take a similar course of action. All of this poses massive challenges for GM’s business and their human resource management, including:
The GM example is just one story, but it’s a big one. In 2023, more employees were laid off than in 2022 plus 2020 and 2021 combined. Companies with access to the best talent out there said goodbye to thousands: Amazon, Google, Meta, and Spotify, just to name a few. It’s created an abundance of extraordinary talent in the technology sector, leading to heightened competition when filling open positions. On the other hand, many industries such as hospitality, food services, and retail still face widespread labor shortages.
CHROs and Chief People Officers can’t sit idly by on when it comes to business decisions, not when so many of these decisions impact people, culture, and revenue. Chief People Officers are not simply the gatekeepers of talent, they’re the driving force behind change-management, resilience, and productivity. They’re catalysts for business transformation. The only problem is, transformations cost a lot of money.
The typical CFO is used to listening to HR’s requests for resources. And then saying, ‘no’.
From the outside, it makes little sense why Finance and HR don’t partner closely together, especially considering an organization’s workforce can account for up to 70% of their total business costs.By teaming up with Finance, People Analytics and HR can bridge the gap between budget planning, rudimentary excel sheets, and the driving forces that impact their workforce. But first, they need to start speaking the same language.
Focusing on data and insights tied back to business outcomes, asking questions, and creating visually appealing charts and dashboards to tell a story can help HR fix their reputation with Finance (and the rest of the C-Suite for that matter). It’s a crucial step towards finally get the support they need to drive business transformation. Those who can’t adapt and start speaking the language of ROI and business outcomes, will get left in the dust.
A “chicken-and-egg’’ situation, if you will. Because in order to partner with Finance – to speak their language – HR Leaders need to master data judgement, data foundations, data interpretation, and finally, data storytelling. It’s the missing link between being able to translate people analytics to business outcomes.
During the financial crisis of 2008, I saw the same situation time and time again: companies had to make big decisions and HR was always sidelined. I saw so much potential in HR to help these organizations come out on top, and wondered to myself, ‘’How can HR drive these decisions without getting sidelined?’’ It all comes back to data. We’ve had so much luxury over the past few years, but recently that’s all changed. Everyone’s faced with cutting costs. It’s 2008 all over again! We need to get back to basics. To ensure that, whatever we’re doing, we’re doing it well – with quality data and insights to back it up.
This past year, our ‘’State of People Analytics’’ report with HR.com revealed organizations that excel in the use of People Analytics are 5x more likely to integrate HR data with non-HR business data. However, only a mere 22% of respondents indicated they believe their organization is using People Analytics effectively. These findings reinforce the disconnect between HR and business outcomes, and the need to close that gap with effective tools and solutions.
My recommendation here is for HR Leaders to implore their teams to lean into upskilling themselves around data. Three practical ways to do this:
These are just a few examples, but in the end, it comes down to leading by example. Make using people data an intentional part of your new way of working. Every HR Leader should aim to bring new, innovative, and data-backed solutions to the table in 2024.
It’s no secret that rapid technological advancements in recent years have revealed significant potential of AI, particularly Generative AI (genAI), in Human Resources Management. The rise of AI tools has revolutionized HRM, enabling more efficient and data-driven decision-making processes. This adoption is the next step in HR’s evolution towards strategic business partners – and towards “People Operations’’. I’d even bet that ethical adoption of genAI could single-handedly hold the key to altering the career trajectories of HR and People Analytics professionals everywhere.
In fact, McKinsey’s 2023 Global Survey found that adoption of Generative AI (gen AI) is already widespread, with one-third of respondents reporting its use in at least one business function.
However, with the technological strides comes the necessity for robust governance, ethical and legal considerations, and regulatory compliance. For this reason, I’m proud to see the EU recently passed the AI Act, an agreement on the world’s first set of artificial intelligence rules. The act hopes to mitigate dangers from both advanced AI models and foundational systems that underpin tools like ChatGPT. It also includes steep penalties of up to 35 million euros ($38 million) or 7% of a company’s global turnover for organizations who don’t comply.
At Crunchr, we believe in the potential of genAI to move the needle for organizations in a positive direction. It’s why we’re committed to helping HR stay ahead of the curve by building solutions that are safe, effective, and inclusive for everyone – with or without government regulations.
The bottom line is this: whether you’ve chosen to adopt AI yet or not, there’s no avoiding it. With the power of genAI, HR is suddenly able to craft stories about their workforce like never before, elevating them into the strategic business partners. So I highly recommended getting ahead of this one before it’s too late.
One of the many ways HR can contribute to better business outcomes falls under the scope of Environmental, Social, and Governance (ESG) frameworks. Specifically, Corporate Sustainability efforts and reporting.
For the first time in modern history, we’re starting to see governments impose regulations on large organizations when it comes to the impact they’re operations have on both their employees and the planet.
Introduced by the European Union, it’s a significant evolution in the realm of ESG and corporate sustainability reporting. According to Deloitte (August 2023), the CSRD will impact approximately 11,700 to 50,000 companies in the European Union, with approximately 3,000 or more U.S. based companies estimated to be impacted.
The CSRD aims to enhance the consistency and comparability of sustainability information in an era where consumers and investors are increasingly concerned about ethical business practices. The EU is again introducing first-of-its-kind legislature with the CSRD, with the goal of creating measurable guardrails around how large business can sustainably operate.
Such compliance initiatives would typically fall under the purview of the Finance department, with some help from Legal and IT. However, when it comes to the CSRD and forthcoming SEC regulations in the U.S., I see HR taking a leading role. For example, one of the 12 European Sustainability Reporting Standards (ESRS or “the standards”) outlines the need to disclose qualitative information (storytelling) as well as quantitative data that only HR can speak to.
ESRS S1 Own Workforce requires the companies within the scope of the CSRD to disclose details related to work-life balance, diversity and inclusion, improving health and safety measures, and providing adequate pay.
The CSRD and other ESG initiatives provide a unique opportunity for HR Leaders to partner with Finance to drive real, measurable business outcomes as well. So whether it’s a compliance exercise or an opportunity to craft new policies that drive sustainable outcomes, ESG tactics can easily be leveraged as a strategic advantage.
Shifting towards a skills-based organization is probably number two on most HR leader’s list for 2024, (after AI), and for good reason. With all this business transformation, comes the need for different skill sets. Add to this, the fact that we are facing a leadership crisis, and you have a melting pot for one of the biggest transformations yet – moving from roles-based organizations to skills-based.
But the idea of creating an agile workforce is still so complex that many have yet to take the leap of faith and try it in their organizations. Why? And where can you start?
Are you looking to increase your promotion rate? Impact employee engagement and productivity? Reduce the need for redundancies?
Building an off-the-shelf skills taxonomy can help HR Leaders and businesses create a common set of language around skills. From there, ensuring these skills are linked to the correct positions, the right employees, and then identifying where you have gaps. Once you can pinpoint the areas where you have an abundance of skills vs skills that are lacking, you can form a hypothesis around the activities it will take to get you on a more level playing field. These could include: leadership development training, mentoring, performance management, recruiting for a particular skill, recruiting for diversity, and more.
As with any other trend, you’ve got to start with good, clean data to inform decision making. This will surely set you up for long-term success.
Businesses have undergone an exorbitant amount of disruption in recent years, with many predicting the amount of disruption to increase. So, it’s time for HR to buckle up and get ready for the ride.
I believe in the power of HR and People Analytics to change the way we work for the better, I always have. It’s why I started Crunchr in 2014, and it’s why I’m writing this article today. But in order for that to happen on a large scale, it’s critically important for HR to focus on upskilling with data, embrace AI and skills, and partner with finance to drive measurable business outcomes.
Because, more than ever, hour after hour, HR’s work is never over.