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Any organization is only as strong as the team it employs, and no one understands this better than human resources (HR) professionals.
But when technology, culture, and sociological factors are driving massive change at every level, how has the role of HR adapted in response?
In this white paper, we’ll seek to analyze the evolving role of HR, exploring the major drivers of change and how the resulting alterations affect the way we understand human resource management.
As you’ll see, the role of HR has evolved beyond the narrow definition of finding, acquiring, and retaining talent – modern HR is as much about data analytics and leadership strategies as it is about ‘hiring and firing’. And companies are realizing this, with Fortune Business Insights projecting an increase in spending in the global HR technology market from 24 billion USD in 2021 to 35 billion USD in 2021.
As one of the largest influencers of change in the function of HR, technology has provided unprecedented opportunities to improve the way staff is recruited, managed, and supported.
Online recruitment provides a lower cost-per-hire than traditional methods while allowing HR professionals to search, sort, and filter candidate data quickly, securely, and efficiently.
With machine learning, the recruitment process can also be optimized to reduce bias and identify top candidates automatically. Data points like cost-per-hire and time-to-fill can help companies identify and address weaknesses in their recruitment processes. Offer acceptance rates can highlight any issues around salary and compensation structures, either across the organization or concerning specific roles.
Automated onboarding processes (such as triggered emails, status updates, centralized resource libraries, and info routing) can be used to improve employee experience, allowing new hires to track their own progress and handle low-level administrative problems they might have with greater independence.
This reduces the day-to-day workload for HR professionals, freeing them up for higher-level strategic tasks.
A McKinsey survey of over 80 chief human resources officers found that future HR operating models will feature a shift in the focus required of business partners. Their primary responsibility will be to advise top management as opposed to completing routine administrative tasks that could be automated or completed through self-service portals.
Using a people analytics solution can help connect this onboarding process and the data it generates with employee satisfaction surveys, appraisals, and performance reviews to provide a holistic understanding of the employee experience.
Used correctly, automated onboarding can provide a supportive experience that allows new employees to achieve a greater level of autonomy, increasing their perceptions of their own effectiveness in their new role.
As well as improving the speed and precision with which HR professionals can work, new technologies such as people analytics have changed the HR landscape forever.
HR analytics tools are trained on comprehensive data sets that catalog the full employee lifecycle, starting from the recruitment process and including organizational structure; mobility, diversity and inclusion; compensation and benefits; performance reviews; training and development and much more. The tools can then extract valuable insights, allowing HR professionals to identify trends and patterns in the workforce.
Working towards the organization’s goals, this analytic data can predict employee turnover, identify skills gaps, save on labor costs, and improve decision-making and qualitative analysis of workforce decisions.
Hybrid and distributed workforces have contributed to several changes in the HR agenda.
As well as adapting to new technologies, communication channels, and management practices, organizations have had to find new ways to acquire, engage, and support remote workers.
The post-covid labor market has introduced candidates to a worldwide spectrum of opportunities. Employees can now reside a hemisphere away from their employers while fulfilling, and even exceeding, the expectations of their roles. This is great for candidates looking for a global experience. However, this presents a challenge to HR professionals trying to scout and attract the best talent out there.
For many HR professionals, this has necessitated a significant change in their communication style – HR support for remote workers relies heavily on a more proactive approach. Regular check-ins and feedback sessions are vital to ensure that remote workers are aligned with the company’s culture and still feel connected to their colleagues.
Remote working has also presented a new set of challenges for performance evaluation. HR professionals have had to adopt new performance metrics and data-driven evaluation methods, measuring output and results to ensure that remote workers are meeting expectations and contributing to the company’s success.
Tracking remote and hybrid workers is likely to become an even more formalized and involved process with the advent of new legislation – in particular, the Corporate Sustainability Reporting Directive (CSRD), due to be introduced in early 2024 by the EU. With this mandatory obligation on the horizon, even more pressure will be placed on HR professionals.
CSRD will apply to 75% of businesses in the European Economic Area. Along with companies based in the EU, this will include non-EU organizations that have a turnover of over €150 million in the EU. To comply, businesses must provide regular reports on a wide set of data points, including absenteeism and sickness, training and development, and working hours.
There’s undoubtedly some benefits to all this – CSRD offers opportunities for businesses to achieve greater social impact and reducing the risk of greenwashing. Complying with CSRD can strengthen a company’s credibility, leading to greater prospects of external investment.
However, the advent of CSRD will see many companies operating in the EU adopt specialized people analytics and reporting solutions to help them manage the additional administrative workload, by easing the collection and reporting of data on their workforce.
While the causes (and indeed, the data) surrounding the ‘Great Resignation’ are still very much a matter of dispute, it’s hard to argue with the fact that company culture is now a key factor for many people when deciding who to work for.
In a 2021 Jobvite survey of over 1,500 adults, 86% said they consider a company’s culture to be “somewhat or very important” when applying for a job.
The Covid-19 pandemic seriously increased the pressure on companies to provide employees with a more benefits-driven work culture and environment. The trend towards home working and hybrid working, accelerated by repeated lockdowns, shows no signs of slowing down post-pandemic.
In the United States, remote working opportunities leaped from 4% of all vacancies to 9% and are expected to surpass 15% in 2023, according to research by Ladders, Inc.
“Hiring practices typically move at a glacial pace, but the pandemic turned up the heat so we’re seeing a rapid flood of change in this space. It’s really rather amazing.”
Marc Cenedella, CEO, Ladders, Inc.
Much of the responsibility for addressing the demand for better workplace culture has naturally fallen to HR. The HR department is now regularly tasked with creating programs and initiatives that help employees feel more connected to the company and their team.
This includes providing opportunities for professional development, promoting work-life balance, and recognizing employee achievements. In aid of this, people analytics data can be used to more accurately gauge the impacts and results of these HR initiatives.
Changing societal and business attitudes towards diversity, equity, and inclusion (DEI) have also resulted in significant changes for the HR agenda.
It’s no longer enough for HR professionals to be merely compliant with workplace equality legislation. In Deloitte’s Global 2022 Gen Z and Millennial Survey, employees who are satisfied with their company’s efforts to create a diverse, equitable, and inclusive environment are more likely to stay loyal to the organization for five years or more.
However, the business case for championing DEI practices goes far beyond just providing the right token optics to attract talent.
Research by McKinsey demonstrated a range of business benefits for organizations who commit to DEI, including the following:
So how can a company improve DEI practice?
There’s a range of direct actions HR can execute to achieve DEI goals. These include:
People analytics provide significant benefits to HR professionals looking to implement these measures – they can help you identify gaps and discrepancies in hiring processes, as well as allow you to track DEI initiative progress and develop your strategies
The relationship between the functions of HR and leadership has changed in ways that are both profound and complex.
Historically, HR’s role within most organizations was a mixture of administrative functions such as payroll and employee documentation, along with ensuring regulatory compliance with labor laws.
However, in the modern business world, HR is increasingly seen as a strategic partner to leadership and is expected to deliver value to the business. This change is partly driven by the challenging macro-economic environment organizations are facing and cultural factors due to a growing tendency for the company’s philosophy to prioritize people over processes.
The growing importance of HR in relation to leadership is also a result of the changing nature of the products and services our society needs and the move away from traditional manufacturing models and processes, driven by continuous technological advancements.
The concept of ‘talent’ has begun to diversify from traditional ideas of matching individuals to a rigid, defined role within the organization – instead, talent is deployed as a resource to achieve goals in a mixture of established processes and project-based initiatives. This change also led to skills-based organizations: skills replacing jobs.
Subsequently, the relationship between leadership and HR has become increasingly collaborative.
HR professionals provide insights and recommendations to leadership based on their expertise in areas such as talent acquisition, talent management, and employee engagement.
However, expertise alone is not enough. Leadership require data to make informed decisions that align with the mission of the organization. Enter people analytics solutions. With easy and instant access to workforce data from a single authentic source, HR now has the information at hand to develop their stories and insights.
In turn, leadership provides HR with greater visibility into business strategy and priorities, enabling HR to align their practices more closely with the needs and goals of the organization.
This cross-fertilization of HR and leadership functions has led to a fundamental rethink of how we define leadership roles. Prominent HR expert Dave Ulrich has charted the changes in how leadership defines its role in talent management.
Before 2010, according to Ulrich, leaders saw their primary responsibilities towards their workforce in terms of clear communication and providing opportunities to upskill. Employee experience was deprioritized in favor of efforts to increase productivity.
Ulrich charts three phases, including this pre-2010 position, leading to the present day. He outlines the following emerging priorities for modern business leaders as being critical for their relationship with their team:
As well as these cultural factors, technology is also accelerating the closer collaboration of HR and leadership. Cloud-based people analytics solutions are enabling HR professionals to provide real-time data and insights to leadership, enabling more informed decision-making.
People analytics tools are providing HR with greater visibility into workforce trends and insights, allowing them to identify areas for improvement, build their stories behind the “why” , and develop data-driven strategies. This, in turn, is enabling HR to play a more strategic role in supporting leadership and driving business success.
A specialized people analytics and reporting solution can ensure that HR professionals can meet these emerging challenges head-on. People analytics can help HR to easily discern patterns and trends, and dig into what is happening in the workforce. It makes it easier to share and work on HR challenges together..
One of the major challenges in HR’s agenda has always been finding and attracting the right talent. People analytics offers a set of precise new tools to help tackle these issues.
For instance, people analytics can diagnose and address high turnover problems, including the issue of “failed hires,” where staff leave within the first year of employment. This may arise due to poorly chosen recruitment channels, selection procedures, onboarding processes, or other factors unique to a particular team or manager.
By linking insights from engagement surveys, compensation trends, and career opportunities, people analytics can help identify the root cause of the problem and pinpoint areas for improvement. In this way, people analytics offers powerful new solutions to optimize hiring practices and enhance talent retention.
Hybrid-work is the priority on every HR professional’s agenda. Fortunately, hybrid-work/remote-work related metrics (and their impact on the company) can be captured with a people analytics solution. The impact of different working models on employee satisfaction, performance, and retention can now easily be measured.
DEI is another top-priority topic in HR’s agenda – it’s an ongoing process that requires continuous evaluation and improvement. Using people analytics, organizations can measure DEI throughout both employment and recruitment processes.
This is important as it allows HR professionals to identify and address potential barriers to diversity and inclusion at an early stage in the employee lifecycle. Diverse talent can then be hired and retained with focused career development and promotion opportunities.. With the guidance of people analytics solutions, representation, equal opportunity creation, and pay gap reduction can improve.
Legislation, such as the Corporate Sustainability Reporting Directive, means that DEI and hybrid-working have become increasingly important from a compliance perspective. However, these factors are just a couple of facets of a company’s reporting requirements, alongside a wide range of other key people metrics that companies must consider.
Fortunately, People Analytics can help companies collect and report workforce data with ease, making it an invaluable tool for meeting reporting requirements and staying on top of important metrics.
Implementing a people analytics solution should be approached as a five-step process:
Assess the most up-to-date available data, looking to address the current situation. Use visualizations where possible.
Create hypotheses to guide and inform your explorations. Seek out underlying issues.
What business issues are currently having the greatest effect on the wider organization? Are there any HR issues that are related?
Maximize impact with the least required effort while remaining focused on goals.
What metrics can be used? Is it possible to A/B test? How can measurement be systematized?
All the factors listed above will continue to impact the evolving role of HR, as the way we work and interact professionally continues to reflect the rapid changes affecting our society as a whole.
The growing demands placed on HR professionals are a signifier of how human resources and talent have become central to our understanding of what constitutes a successful business. That notion of success is also undergoing significant change, to reflect the priorities of the workers who underpin our organizations, systems, and processes.